Risk management: here is how you limit business risks

Take measures against cybercrime

Ransomware, DDoS attacks, phishing emails: there is a good chance that your business will sooner or later have to deal with cybercrime. So, take measures to protect your business online against cybercrime. Such as using a password manager, running automatic updates and installing antivirus software. Or take out cyber insurance.

Prevent discussions with general terms and conditions

Draft general terms and conditions and include the most important agreements for you and your client or customer. If additional agreements apply to a specific assignment, include them in the general terms and conditions.

This prevents unclarity and discussions if, for example, a supplier delivers late, a customer does not pay, or if there is ambiguity about who pays for transport.

Insure your business risks

Damage

Damage caused by fire, hail or drought, for example, can temporarily shut down your business. You will not earn anything, but your costs will continue. Consider the ways in which your business can suffer damage and take out insurance policies for these risks.

Incapacity for work

As an entrepreneur, you will not receive benefits if you fall ill or have an accident. You may be able to cover a few days or weeks off work with your savings. But what if you are ill for a longer period of time or even become disabled? You can insure yourself against this with a disability insurance.

Liability

You spill a cup of tea over a customer's laptop, you make a mistake at work that causes your customer damage. With business liability and professional liability insurance, you can prevent you or your company from having to pay the claims for damages. These are  2 of the 10 important insurances for starters.

Do you have a sole proprietorship, general partnership (VOF) or professional partnership (maatschap)? Then you are personally liable for the debts of your business, including with your private assets. Do you have a legal structure with legal personality, such as a cooperative, private limited company (BV) or public limited company (NV)? Then your private and business assets are separate.

Increase your price with inflation

Every year, the prices of products and services increase. This inflation also increases your costs. Statistics Netherlands (CBS) conducts extensive research into this. They look at the prices of products and services in the Netherlands and calculate the average. You can use this average to adjust your prices so that you do not earn less. Be sure to include this in your general terms and conditions so that your customer is aware of it.

Check business partners in the Business Register

A supplier who appears not to have a business or a contact person who is not known in a company. Conduct business safely and check your business relation in the Business Register. In the Business Register you can find this information:

• Whether someone is registered in the Business Register and what the company details are.
• Who is authorised to sign on behalf of the company.
• For BV’s and certain other legal structures, you can also see the financial statements or balance sheet, so you can see how the money is being managed.
• Whether a business is bankrupt, has been granted a suspension of payments by the court or is in debt restructuring.
• Who is liable if something goes wrong. So you know who you need to go to in order to get the costs reimbursed.

Say ‘no’ to too-good-to-be-true offers

It happens more often than you think: one in ten businesses suffers from acquisition fraud. A scammer contacts you and deceives you. Before you know it, you are stuck with an expensive contract for your marketing, for example. So, always say no to sales offers by telephone and never just sign a fax, email, or letter.

Make it difficult for robbers

A robber will use violence or threats to force you to hand over money or goods. This happens more often in some industries than in others, for example in the retail, catering, and transport industries.

Make life difficult for business robbers by making it clear that there is nothing to get from your business. Protect your business against criminals, set up your premises securely, and draw up security procedures.

Prevent health risks with a RI&E

Health risks include accidents with acidic liquids or excessive workloads. You can reduce the risk of such hazards with a Risk Inventory and Evaluation (RI&E). This is mandatory if you have employees.

You can do something about most business risks. For example, take measures to prevent them or take out insurance. Would you like to discuss what you can do for your business? Call a KVK advisor free of charge. We can be reached on workdays between 8:30 a.m. and 5:00 p.m. at telephone number: 088 585 22 22.