Whether a company has 2 employees, or 200, or operates in a small region or on a national scale, a responsible business owner will take steps to protect its most precious assets. A business’ assets might include obvious resources such as cash money, property, stock, and employees, but it could also refer to intellectual and creative property.
If any of these assets are vulnerable in your business, you are leaving the likelihood of future stability and success in the balance. If you are launching a start-up or looking for ways to protect your existing business, here are 5 vital ways to protect your business assets for a more secure and stable future.
In order to keep your business protected against legal action, you need adequate insurance in place. In an ideal world, you will never need to claim on your insurance, but not having it in place could be catastrophic. At the very least, you should have general liability insurance, but you may also need workers’ compensation and professional liability insurance.
2. Employment agreements
Your employees have access to a lot of information, processes, and data, which, if they fell into the wrong hands, could be used to attack your company. It is important that your employees are fully trained and educated in terms of the importance of securing sensitive information, but you may also want to get them to sign employment agreements which state this explicitly. If you are working with third parties, you can get them to sign confidentiality or nondisclosure agreements (NDAs).
3. Trademarks, copyrights, and patents
Your original ideas, documentation, technology, and design should be protected by trademarks, patents, and copyrights. If you do not safeguard your innovative ideas, you may find your competitors and emerging companies will copy your achievements. If they do this and have access to more funding, they may even overtake you in the marketplace. Click here to find out more about the difference between trademarks, copyrights, and patents.
Your IT network may be vulnerable to attack if you do not invest in cybersecurity. Cybercriminals are continually developing new tactics, tricks, and dangerous viruses or malware to gain access to sensitive information. You and your staff need regular training to ensure you are vigilant to the latest cyberattacks and know how to mitigate risk if a cyberattack is suspected. It is also essential that you invest in adequate security software for your network and that you have a backup storage system in place.
5. Incorporation as an LLC
To protect both your business assets and your personal assets, you should incorporate your business as a Limited Liability Company (LLC). By structuring the business as an LLC, you will separate your personal and business assets so that your personal assets are not at risk if you face legal action.
In addition, LLCs are not held to the same standard as corporations in terms of annual reports or record keeping. There may also be some tax benefits as the IRS classifies LLCs as either sole proprietorships or partnerships (depending on the number of owners) which means LLCs take advantage of pass-through taxation. Rather than paying corporate taxes, an LLC’s income and expenses are submitted through the owners’ personal tax returns so the owner or owners pay personal income tax on profits.
James Daniels is a freelance writer, business enthusiast, a bit of a tech buff, and an overall geek. He is also an avid reader, who can while away hours reading and knowing about the latest gadgets and tech, whilst offering views and opinions on these topics.
Statements of the author and the interviewee do not necessarily represent the editors and the publisher opinion again.