Future proof your business financially

Future proof your business financially

1. Plan for the unexpected – ensure that you are adequately insured
Business insurance offers insurance against claims/losses that the company cannot carry themselves. Without business insurance, business owners may be forced to pay for costly damages and legal claims out of their own pocket. Depending on the scope of the loss or liability this could drastically impact the business’s finances, and a business might find itself in a crisis. Business insurance can provide cover for material damage at your business’ premises and contents as well as offer protection against financial losses such as loss of gross profits or revenue.

2. Consider the impact of modern risks like cybercrime
Most companies make use of computers to interact with valuable electronic data. Every business that uses electronic communication should protect their business from the fallout of a cyber event. Cyber events can be quite costly and often harm a company’s brand and reputation. Businesses may be held liable for damages stemming from the theft of a third-party data breach. Cyber insurance is important to protect your business against the risk of cyber events, including those associated with network security and media liability. Cyber-risk coverage can assist in the timely remediation of cyber-attacks and related incidents.

An example of a cyber-attack that can impact most businesses is electronic fund transfer fraud. These attacks involve fraudulent online payments where an emailed invoice is intercepted, and the hacker directs the payment to a different account. Losses can be substantial, especially in the case of property transactions with clients losing deposits or final payments after inadvertently sending the funds to a scammer’s bank account.

3. Key man insurance cover allows you to run your business with confidence, knowing that it is covered if unforeseen circumstances happen
Key man insurance protects a business against the financial consequences should a key member of the business die, become disabled or suffer a critical illness. This could be an owner, an executive, or an employee. Key man insurance cover is equally integral to the protection of your business and the livelihood of your employees. Just as personal accident and health cover is essential in your personal capacity should you become disabled or critically ill.

4. Keep your powder dry for expansion opportunities
Investing to build up capital allows your business to take advantage of growth and expansion opportunities. It is important to invest your business capital for the optimal period and take on acceptable risk, given your unique circumstances, to grow and safeguard your investment.

“Uncertainty is the only certainty there is” so the saying goes! We recommend you contact your financial adviser who is well positioned to help you manage potential risks and build a business continuity plan to future-proof your business financially.

Authors: Ros Schultz &Tanya Boshoff, PSG’s Technical Advisory Team