Just being in business opens the company up to legal and other issues. This might be something entirely new for you. However, it’s often the price of doing business, unfortunately.
While it might seem unfair, quite often, it’s accidental or, at least, unintentional to harm the reputation of an individual or a business. Other business risks should be protected against or minimized too.
Here are four ways to manage risks and not let them distract the business.
1. Secure Commercial General Liability Insurance
Not all businesses decide to get a policy for commercial general liability insurance. But many times, they rather wish they had.
It can broadly cover specific threats such as potential libel or slander or other forms of reputational harm to others. Given that companies are publishing more content now and actively sharing ideas on social media on their account, saying something inappropriate can come back to bite them later.
Commercial general liability insurance is additional to other insurance such as buildings insurance or workers’ comp. This not only provides peace of mind for business owners but also reduces the risks of ownership too.
2. Get the Quality Right and Keep It There
Quality assurance is essential not just to provide valuable goods and/or services but also to limit business risks too. After all, when customers receive excellent quality, they’re more forgiving of mistakes and less likely to object.
Managing quality is something that relates to different areas of the business:
Product Quality
Releasing version 1.0 to customers without proper testing is asking for trouble. When it fails to live up to expectations and customers are inconvenienced, you’re going to hear about it. And should someone become particularly aggrieved, the fallout can get worse.
Rushing a new product out the door without thorough quality checks on production, packaging, and usage is usually a mistake. Instead, put processes in place to test for product quality issues.
Customer Services to the Rescue?
Managing customer complaints, handling their concerns, and resolving them is something that the team in Customer Services deal with daily.
While they may not be able to fix a bad product, hearing the customer and letting them know that they’ve been heard goes a long way. Customers who feel slighted and ignored are more likely to create additional problems for the business, such as a negative social media tweet or to consider legal action.
3. Know the Customers That Aren’t Worth the Trouble
While it’s sometimes possible in a service business to know who the “problem child” customers are and transform them from naysayers to cheerleaders, that rarely happens.
Instead, their constant dissatisfaction often turns into public comments and reputational damage to the company. When the customer clearly will never be happy no matter what the company does for them, it’s best to cut ties when it’s possible to do so. It saves on headaches later.
4. Reassess Risk Periodically
When you don’t have a risk management team in place because the business is too small, then it’s necessary to schedule a risk assessment session.
Business risks change over time. For instance, a decision may have been made not to take out general liability insurance last year, but due to fresh concerns, that may need revisiting. Similarly, as a product goes out to a larger market, the number of complaints may have risen even while the percentage of customers complaining is mainly unchanged.
Managing all types of business risks is essential. Failing to do so doesn’t always lead to positive outcomes. Don’t get caught out; protect the company from the unexpected.
