When you run a business, you realize that owning and operating a business is full of risks and pitfalls. The safety of your business assets is of paramount importance to you. Returning a profit is not adequate because you have to protect your business from lawsuits and claims.
Some of the risks you have to deal with include product or professional liability, claims for damages caused by your staff, debt and mortgage obligations to vendors and third parties, as well as consumer protection issues.
The risks could lead to the loss of both business and personal assets if handled inappropriately. Identifying and minimizing or avoiding them allows you to run your business successfully.
Unfortunately, most business owners are not aware of the potential risks that can cause harm to their businesses and the available protection strategies.
The following tips will help you protect your business venture.
- Proper Contracts and Procedures
If you act fraudulently and negligently, you present one of the simplest ways for creditors to bypass the corporate veil and attack your assets.
You can avoid this by:
- Placing equipment and property titles under the name of your company
- Ensuring that you have a good lease contract for your rentals
- Avoiding reliance on emails for terms in essential relationships
- Having contracts and subcontractor agreements on every project you carry out
It is also vital that you avoid hiring employees to work under the table. Ensure that you only use licensed, bonded, or insured staff to help you run your business. The team includes but is not limited to legal and tax consultants, contractors, asset protection specialists, and maintenance specialists.
- Purchase an Appropriate Business Insurance
As a business owner, you should know that insurance is an integral part of your business and has to be included in your startup budget. Insurance provides you with an avenue and ability to take care of any incidents in your business, thus giving plaintiffs a different target. Also, make sure that you identify the right insurance policy for your business. Rental properties require another type of insurance compared to professional practices or retail stores.
Ensure that your insurer inspects the assets regularly to assess your coverage covers replacement costs and not just the present value.
Additionally, obtain umbrella insurance. Umbrella insurance can be personal or business and functions as an umbrella over any other kind of insurance you may be subscribed to. However, with this type of cover, do not assume that you can afford to be careless since it will offer you protection at each instance. As stipulated by the law, umbrella insurance does not cover criminal, reckless, negligent, or fraudulent actions.
- Vehicle Tracking
Why is vehicle tracking important in safeguarding your business? Many business owners and managers ask themselves this question when they hear something related to vehicle tracking. In the modern world, the impact of vehicle tracking in business is immense. Search allows you to always see where your vehicle or employee is at all times. Vehicle tracking involves the placement of a GPS device in a car.
A person stationed at a central position monitors the information relayed by the GPS device to know the exact location of the vehicle at all times. Moreover, the SATX magnetic car tracker provides excellent real-time tracking, enabling you to keep an eye on your vehicle remotely. Here are some reasons why vehicle tracking is highly recommended for your business.
- It helps you know your inventory’s precise location – Knowing the location of the list enables you to estimate the time it will take for your products to arrive and thus advise your customers accurately.
- Assists in keeping an eye on all your employees and vehicles – You can also find out how long an individual car stops at a location. The security of your truck or cargo will be assured since you will be able to tell if a vehicle stops at an authorized location.
- Improves employee safety – the safety of your employees should be significantly important to any business owner. Tracking helps you locate them in the field in case of any emergencies.
- Helps in the recovery of stolen vehicles – if your car is traceable, you can act swiftly and get in touch with relevant authorities to assist in its recovery.
Tracking is an essential tool for any business that plans to operate efficiently.
- Pick the Most Suitable Business Entity
Although there are many tax-planning considerations, operating as a sole proprietor business is not the best choice for asset protection. When your business is a sole proprietorship, your assets are also exposed to potential lawsuits and claims. You are better off setting up an entity such as a limited liability company to ensure the protection of your assets.
Sufficient asset protection begins with implementing affordable strategies and simple habits that work. The safety of your business is your responsibility. The above tips will provide you with incredible defense in the event of a lawsuit.