Are you worried about protecting your business under the current conditions? You are not alone! The COVID-19 pandemic has brought about a global economic crisis and all countries of the world are going through hard times at the moment. Both large and small commercial companies are experiencing the effects of the global economic downfall.
Unfortunately, the old methods of protecting your business do not work any longer. There used to be some effective business protection instruments about ten to twelve years ago but they are not available today. The new reality makes businesspeople look for new ways of protecting their businesses.
How can you protect your business at an acceptable cost? How can you protect your business plan if you have just started business operations and the only liquid property that you have is your business idea? Should you involve professionals in designing the protection measures? Can you handle the task on your own?
We will try to find the answers to these and other related questions. We hope to be able to provide some down-to-the-ground recommendations that you can apply in practice. Please note, however, that the task of protecting your business will have some unique components in each individual case. This is why we suggest that you should contact International Wealth experts and describe your personal business situation. Please write to firstname.lastname@example.org and we will do our best to help you protect your business.
In the text below, we discuss the main business protection instruments.
Registering a Limited Liability company would be the first recommendation for small private business owners. This will allow protecting your personal assets by disconnecting them with the company assets. In case an ‘act of god’ occurs, your personal assets will not be at risk.
How do you turn your private company into an LLC? This is not extremely difficult but if you would like to register an LLC in a foreign country, for example, you will need some professional assistance without doubt. Please request a consultation with International Wealth experts on registering a foreign company.
You might overlook the possibility of reducing your taxes when registering an LLC. In some countries, you can become eligible for certain tax benefits if you engage in business in some special spheres. Thus, in addition to protecting our personal assets, you can lower your fiscal burden by establishing an LLC.
Insurance companies know very well how to protect your business (or your business idea or your business plan). The cost of the insurance policy may discourage you at first but it is going to be compensated by the feeling of security that it will bring.
How to protect your business by acquiring insurance:
- Select the list of insurable events with great care.
- Insure the General liability.
- If yours is a larger business, acquire professional liability insurance.
- There are different measures that you can take to protect your business. However, all of them are going to be one-legged if you do not buy an insurance policy.
Keep business records
In case a lawsuit is filed against your company, having documents that reflect the information about all deals and transactions is going to be the best defense instrument. This means that you should not think of keeping accounting records as something unimportant.
How to protect your business by keeping records:
- Mark the document files and keep them in good order.
- Make backup copies of the electronic documents on a regular basis. Computers sometimes break down!
- Hire a qualified accountant. If you cannot afford hiring a full-time accountant, find somebody to work part time for you. Outsourcing is popular with startups and small businesses.
Reduce the operational costs
At the initial stage of your business operations, the costs are going to be higher than the income. However, if this situation continues for too long, your business is going broke. One way to make ends meet is by reducing your operational costs.
How to protect your business by reducing costs:
- Monitor the conditions of the office equipment; service it regularly and repair it if necessary.
- Minimize the amount of paperwork: keep the records in the electronic format.
- Purchase only the hardware/ software that you really need.
- Purchase second-hand equipment if this will have no bearing on your business operations.
- We are living in the digital age and you have to take this fact into account and shift the focus towards Internet blogs and social networks when it comes to servicing your clients.
- Try to avoid extravagant expenditures at the initial state of your business operations. Rent office space instead of buying it, for example.
- Remember about the outsourcing possibilities. Having too many people on the staff is expensive.
Concentrate on what works best
One more way to protect your business is to focus on only a few products or services that are in high demand rather than offer many products or services trying to sell them all. If you open a café, for instance, it may have better chances to survive by offering a few delicious dishes instead of a large number of dishes that do not taste so good.
Invest in advertising
Under the conditions of the economic crisis, some businesspeople resolve to save on advertisement costs. Well, this is a way to economize in the short run but your clients are going to forget about you if you do not advertise your products or services in the long run. Saving on promotion is not a good idea. Then again, some of the best promotion is free promotion – invest time in keeping your contacts active using social media. WhatsApp etc.
Work with the clients and for the clients
Whatever business protection measures you take, your customers are the main protectors of your business. After all, they pay the money for your products or services.
How to protect your business by working for your customers:
- Remember the old saying that ‘the customer is always right’.
- Listen to every client attentively and try to cater to him/ her even if you feel that s/he is asking for something ridiculous.
- Take all complaints into consideration and do something to avoid similar complaints in the future.
- Study the demand for your products or services and concentrate on those of them that sell best.
- Improve your client support services.
Increase your income
Optimizing your business activities means minimizing the costs and maximizing the profits. The first task is easier in comparison to the second one. The recommendations below contradict some of the recommendations above but striking the balance is what you have to do when trying to optimize your business activities.
How to protect your business by increasing income:
- Enlarge the range of products or services that you sell.
- Explore the adjacent business spheres. You may find new opportunities that are not exactly within the scope of your expertise but somewhere close.
- Try to keep your prices competitive. A good product or service cannot be cheap but the prices should be reasonable anyway.
- Define your target audience and cater to the needs of this group of people. Trying to please everybody seldom works.
- Engage in brainstorming sessions from time to time. This technique often allows solving different kinds of business-related problems that arise regularly.
Play by the rules
We are not going to say that you should engage in a legal business only as this is self-evident. Rather, we would like to draw your attention to the fact that you have to follow the unwritten rules too if you want to protect your business.
Business etiquette, negotiation tactics, communication with the regulating authorities, and building rapport with your business partners – all these issues are important for protecting your business too. You have to give them some special consideration especially when you enter a foreign market. National cultures differ greatly and this is true for business cultures as well. The business instruments that you use at home may turn out inefficient in a foreign country and vice versa. Learn the rules of the game before joining in.
Protect your business from criminals
It would be a mistake to think that only businesses in third-world countries face the crime problem. According to the statistics, 20% of all crimes committed in Great Britain, for example, are committed against business companies and business people. How can you physically protect your business? How can you protect your business ideas from unauthorized use? You have to tackle these issues too when trying to optimize your business operations. The protective measures will come at a price but you might lose much more if you ignore the matter.
Here are the basic things you can do to protect your business from criminals:
- Assess the related risks and identify the most vulnerable spots.
- Think how you can protect your company premises (hire security guards, install alarm systems, video surveillance, mechanical door/ window locking, etc.).
- Request a consultation with a specialist on intellectual property rights if you would like to protect your business plan/ ideas.
- Ascertain that your employees have a safe working environment. This may come at a cost but you will face legal charges if you do not provide for the safety of your personnel and somebody attacks them.
- Try to use cash as seldom as possible in your business operations.
- Provide for the safety of your office equipment. Take inventories often, limit the access to the working areas by strangers, install an alarm system, and video surveillance equipment.
- Ascertain that your employees cannot steal the company property or give your commercial secrets away.
- If you have an invention or a unique idea, you will be well-advised to acquire a patent, register the intellectual property rights, or a trademark. Remember that intellectual property is a more valuable asset than material assets are. This may require considerable efforts on our part but better be safe than sorry.
- Do not try to economize on digital protection means. This concerns your corporate server, your personnel work stations, and any other electronic information carriers.
- If you keep the records in the traditional way (that is, on paper), look into the possibility to start using modern electronic means. At least, buy a machine that destroys paper documents so that no one can get unauthorized access to your papers.
- If you do not know how to protect your business in your particular case, you should seek some professional advice. There are private security agencies that can be of assistance to you.
- If you actively use the electronic commerce opportunities when selling your products or services, it would be a good idea to have an experienced system administrator on the staff. Outsourcing is not recommendable here.
- Periodically check your anti-virus/ anti-hacker software and update it if necessary.
How can you protect a small business?
We have decided to dedicate a separate section to this issue because business and asset protection measures usually come at a cost while small businesses often have limited budgets. Consider that protecting your business can hardly require no investment at all but there are some basic measures that you can take without incurring great costs. These measures include the following ones:
- Spend enough time and effort on designing your corporate website. Your website should not only be beautiful but it should also be informative and user-friendly. You clients should find it easy to navigate your website. Make sure that the information about the payment methods is clearly visible. Another must-have section of the website is a feedback form.
- Try to come up with some unique products or services and do your best to drive it home to your potential customers that they are unique indeed. Having a unique selling point is not enough to protect your business but it is an important component of the overall success of your enterprise.
- Promote your brand name. Your company should become recognizable; otherwise, it is not going to have any growth potential. Especially if you work in a highly competitive market (such as the food service sector, for example), outperforming your competitors can be hard. We recommend that you apply for professional assistance in promoting your brand name.
- Even if you have a small business company, it may be necessary to protect your intellectual property rights. Understandably, it is going to cost some time and money, but when you have a patent or a registered trademark, you have more opportunities for fundraising, for example.
- Acquire an insurance policy against business-related risks. It is important to have a ‘rainy day fund’ that could keep your company afloat if bad comes to worse. There are insurance companies that will offer you a choice of insurance policies. If you are extremely low on funds, at least insure your office and the office equipment. If an earthquake ruins the building, for example, you will have no money making instruments any longer!
- We will say this again: work with the client and for the client. This is the most essential part of any type of business activities.
Are you only considering starting a business? An offshore, midshore or onshore company? If you are, what should you do to make your prospective company well protected? We suggest that you should proceed as follows:
- Choose the country where you would like to set up a company because it does not have to be your home country! There are jurisdictions that offer very attractive conditions to startups. What about Canada for example, a great place to start an online business and open a Canadian merchant account?
- Analyze the advantages and disadvantages that each form of company ownership has (of those available in the jurisdictions that you are considering) and choose the most suitable one.
- Register a company in the jurisdiction that you have chosen.
- Open a corporate bank account, plus a second corporate account as a backup.
- Acquaint yourself with the local taxation system and learn about the legal ways of lessening your tax burden.
- Tackle technical issues such as finding a place to stay in the foreign country (if this is the option that you prefer), finding a company office, hiring an accountant, and so on.
International Wealth experts will be delighted to assist you with your offshore company incorporation and international bank account opening requirements! You are welcome to apply for a single service or a service package. Please write to our email address (e-mail email@example.com) or use some other means of communication (WhatsApp or our live chat) to get in touch with us. We always respond to queries in a fast manner!