4 Uncommon Risks You May Not Have Thought Could Affect Your Small Business

Small businesses are the backbone of the economy, employing more than half of all private sector workers. But even though they’re vital, small businesses often don’t have the same protections as their larger counterparts. And yet, small businesses often face a variety of threats that may not be immediately apparent to the business owner, but could severely disrupt their operations and put their future in jeopardy. Let’s take a look at four of these risks now, as well as what can be done to mitigate these risks.

A Key Worker Is No Longer Able To Work

One risk that many new business owners do not take into consideration is the inability of a vital employee to work due to illness, injury, or other unexpected events that have led to them becoming disabled and unfit for work. The loss of a key worker can have a devastating impact on a small business; operations can suffer substantially, as the business must now cope with the challenge of finding someone to fill their role quickly and inexpensively. In addition, there’s often a steep learning curve associated with bringing in a new person, and it may take several months before they are up to speed with the role.

It is reassuring to know, therefore, that this situation can be planned for, and measures put in place to protect the business from the impact that losing a key worker can cause. One such measure is getting key person insurance sorted, perhaps with the help of a company like www.keypersoninsurance.com.

Key person insurance is an invaluable asset for small businesses as it provides financial protection against the loss of a key employee. It is a type of life insurance policy that pays out to the employer in the event that their essential employee becomes disabled, passes away, or resigns without notice. This money can then be used to pay for recruitment costs, as well as costs associated with training a new employee.

Natural Disasters

Unless they live in an area that is prone to extreme weather, businesses may not immediately consider the risks of a natural disaster, or the consequences it can have on a small business. However, these events can have serious and long-term impacts on an organization’s operations and finances. From hurricanes and floods to earthquakes, tornadoes and tsunamis, natural disasters can damage or even destroy facilities and equipment, disrupt services, cause communication outages, and leave a business unable to operate to its usual capacity.

Having a contingency plan in place is paramount to ensure that businesses are prepared and have a plan to reduce disruption and damage, should something happen. A comprehensive plan should address the natural disasters most likely to affect where the business operates, such as hurricanes, and how their effects can be minimized.

This could be through moving certain vital pieces of equipment, documents, or data to a secure location, allowing employees to work from home, or even putting orders on pause for a short period and communicating the situation with clients.


While this may sound obvious, especially in this day and age, cybercrime is still something that some small business owners still don’t consider as something serious that could happen to them. However, businesses of every shape and size are vulnerable to a variety of cybercrimes, and the potential ramifications of cybercrime are serious indeed.

Hackers could gain access to sensitive customer information, like bank account numbers or social security numbers, leading to financial losses for the customer and reputation damage for the business.

Businesses therefore need to be aware of the potential risks out there and the importance of investing in strong cybersecurity measures. This should include implementing proper data encryption and authentication protocols, two-factor authentication for users, and regular security audits to identify vulnerabilities and potential threats. Business owners should also invest in tools such as firewalls, antivirus software, and email filtering systems in order to keep their businesses safe. Businesses should also remind employees of the best ways to stay safe online and what they should do if they see something that makes them worried.

Employee Fraud

Employee fraud is one of the greatest risks that small businesses may not think of. On the surface, it may seem unlikely for an employee to commit a form of fraud against their employer, but the truth is that it happens more often than you might think. Employees are in a unique position when it comes to fraud because they have direct access to the finances and operations of the business.

Without proper oversight and monitoring, employees can easily divert company funds for their own nefarious purposes, known as employee embezzlement, which can have a major financial impact on businesses.

In order to prevent this, small business owners should take several proactive measures. First and foremost, they should create a system of internal controls within their organization. Putting in place rules and procedures that govern how financial transactions are conducted, such as requiring approval from multiple people when making large purchases or payments, makes it more difficult for employees to commit fraud. Additionally, businesses should conduct background checks on all new employees, keep a close eye on financial transactions, and be sure to investigate further should they notice any suspicious activity.

Final Thoughts

When you’re starting or running a business, it’s important to be aware of the many risks you may not have considered. From the four points we have raised above, to other things such as financial instability to reputational damage, there are a number of potential threats to your business that can impact your bottom line. However, by being proactive and understanding these risks, you can take steps to mitigate them and protect your company’s future.

Leave a Reply