An even smaller percentage make it through the first decade. Failure can happen for all kinds of reasons. Sometimes, a lack of market fit or a change in economic conditions is all it takes. But sometimes, small businesses can be their own worst enemies. Failure to address certain obligations or unnecessary risks can easily lead to fatal cash-flow issues, which are particularly dangerous during the make-or-break period in their first decade.
Ensuring Safety
One area that demands careful consideration is the issue of personal safety and injury to people in and around your business. Small businesses, like any other enterprise, are exposed to occupational risks. Whether it’s a mishap in the warehouse, an incident in the store, or an employee facing harm during their duties, the consequences can be severe.
Without adequate insurance, a comprehensive risk assessment, and proactive measures to mitigate potential risks, a business might find itself grappling with substantial personal injury costs if found culpable. A condition caused by your negligence could be anything from minor pain management costs to serious PTSD compensation claims; these significant measures can cost a business dearly.
Therefore, creating a safe working environment and implementing robust safety protocols are non-negotiable aspects of running a small business. Neglecting these measures not only endangers the well-being of your team or customers but also puts your business at financial risk.
Legal and Compliance Obligations
Legally speaking, failure to comply with government regulations isn’t just about safety, but also meeting certain standards to do with employing people, or maintaining health standards, especially if your business relies on hospitality or food handling. Seeking legal advice or speaking to an accountant can be helpful in knowing industry-specific measures you need to take, to avoid violating any legal requirements. Beyond monetary penalties, you can attract limits on doing business for lengths of time, or worse – full suspension of operations.
Tax Penalties
Many small businesses won’t attract the same attention that a multinational corporation does when it comes to correctly filing taxes or managing late payments. However, if you do fail to meet your tax obligations and HMRC does then investigate, penalties can be far worse than simply refiling. Accountants are often hired on a part-time basis, to help ensure their records are accurate and they’re paying correct tax. Of the three points we’ve explored, getting taxes right is one of the most common needs for a business just starting out.
Making sales, managing your supply chain and, sometimes, simply getting lucky with economic conditions are all key for those first, five years. The things we’ve mentioned are a part of building a foundation that ensures the sustained well-being of your business and your most valuable asset – your services and your team.