Running a business can be incredibly expensive. Especially if something goes wrong. So, protecting and covering your assets is a key part of ensuring your financial stability.
The trick to protecting your business assets is actually understanding the risks facing them. Your financial and physical assets, for example, could be under threat from things like fire, floods, theft, or any other types of disaster.
Your strategic information, and “soft assets” could face other types of risks like hacking, fraud, and theft. So, how do you ensure that you are properly protected and how do you make sure that you do not lose money, should something go wrong?
We took a look at some of the top ways to ensure your assets are protected.
Get The Right Insurance For Your Company
Insurance is known widely as a grudge purchase. But, the truth of the matter is, without it, you do stand a chance to lose everything should something go wrong. Unlike personal insurance, business insurance can be complex and multi-faceted.
There are a number of considerations when taking out business insurance.
First, you need to protect your business premises as well as your physical assets such as inventory. You also need to protect your equipment from both breaking down and being stolen. If you work with intellectual property and data and information, you will need to cover this too.
COVID-19 showed businesses just how important it is to take insurance on business interruptions. Should something like a pandemic or disaster stop business, you will need that kind of insurance to cover the lack of money coming in and ensure that you can still pay your staff.
Lastly, if you have employees, you will need to consider purchasing workers’ compensation.
So, before purchasing business insurance, make sure to assess the risks your company faces and discuss your needs with a licensed advisor. This way you’ll get a policy tailored to your needs.
Keep A Record Of Your Assets
To protect your assets, you will need to know exactly what falls under the category. As a business owner, you will want to have clear records of all of your assets, their worth, their estimated lifespans, and the risks that they all hold.
You will also want clear records of the type of cover for them and the insurance contracts that you have for them. Not only will this be key when for your financial advisor or manager but also for the insurance companies as well as auditors.
Keeping clear records will ensure financial health going forward in your operation. From there, you should carry out regular asset checks, including stock and inventory checks to ensure that your assets are still in order.
Keep doing assessments and audits to establish where they are in their lifecycles and to establish whether maintenance needs to be done on them to extend their lifespan and reduce breakdown.
Register Your Company As The Right Entity
When you start your business, make sure you choose the right entity for the business. It is important to know that each entity comes with different levels of liability and you will have different roles in each one.
Consider creating a business entity such as a Limited Partnership or Corporation. If you do this, you will be able to transfer all of your business assets under the name of the company, which is better for insurance and easier to manage.
For instance, registering a limited partnership means that you’ll only be liable for investments you’ve made in the business.
Always Create Contracts And Follow Strict Protocols In Business
Our best advice is to make sure that you get absolutely everything in black and white. Documentation is the only way that you can avoid any loophole or fraud in your procedures. One way to protect your business is by signing official contracts for every project and keeping all documentation in a safe place.
Moreover, make sure you get permits, licenses, and government approvals for every aspect of your business. You should only work with licensed, bonded, and insured professionals and avoid scam licenses and fraudulent permits. Make sure that you regularly consult with asset protection specialists and legal and tax advisors.
Having a good lawyer on your side to draw up contracts and ensure validity in everything is vital. If there are any gaps or discrepancies in your business history, this could make you liable legally in the future.
Protecting your business assets is a must in today’s world. So, get everything established from the outset. Purchase a comprehensive insurance policy and get a good lawyer and tax and finance advisors on your side. It’s better to spend more money now and make sure everything is done in the correct way.