Q.How can I limit or manage my risk with a new business?
A.If you are starting a business, failing to detect and minimize your risks can cause the early demise of your new business. To manage some common risks consider doing the following:
- Open the Mail Personally. While it is unnecessary for you to process all of the mail personally, it is essential for you to personally open all pieces of mail. Once opened, the processing of the mail can be delegated to another. If you always personally open the mail you ensure you receive all of the mail, especially those pieces containing checks, bank statements, and other key documentation.
- Personally Sign all Checks.
- Limit the number of Corporate Credit Cards. You should limit the number of employees who receive company credit cards only to yourself, and key employees if necessary.
- Back up your computer data nightly.
- Restrict access to your electronic files. Consider using passwords to protect your sensitive data, and change your passwords often.
- Maintain Confidentiality About Your Business Practices. Yes, your accountant and attorney need your full disclosure, but they are bound by confidentiality obligations. Although vendors, suppliers, creditors, and banks, will always ask for a lot of sensitive personal business information, be aware that they often ask for far more information than they need. Just because they ask for it doesn't require you to give it.
- Purchase Adequate Insurance. Manage potential business risks by purchasing appropriate amounts of insurance.
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