44 | MARCH 2020
Business
Read online at www.proinstaller.co.uk
RISK BEYOND YOUR
COMFORT ZONE
Successful entrepreneurs
are risk takers, but their risks
are both understood and man-
aged. This is the trick when
running a business: not that you
don’t take any risks. Rather that
you understand the risks that
you are taking and try to keep
them to a minimum.
There is an old saying that
prevention is better than cure.
When it comes to business
risks, that is definitely the case.
This article looks at some of
the risks that should be con-
sidered by anyone running an
installer business. Very often,
taking some simple actions can
help avert a crisis. Although
most businesses won’t go bust
from these risks, some will
even when they were totally
preventable. This article looks
at some of the cases where this
applies.
Running out of cash
The most common fatal prob-
lem for businesses is running out
of cash.
There are several ways this can
happen. As you grow you can
lose track of profitability. Costs
might have increased significantly
without you noticing. Alternative-
ly, you might have started taking
on unprofitable jobs as people
with less experience did the
estimating.
Almost the most upsetting is
“over-trading” when you are
growing fast with profitable
work. Then you run out of money
simply because there is too much
work-in-progress to fund ahead
of finishing and getting paid.
Fraud and theft
by employees
Once I employed a young guy
whose father was a very senior
business leader. I guess that he
was used to the expensive things
of life. We did wonder how he
could afford his nice new motor-
bike. When he went on holiday
we found out. He was stealing
from us, selling our software on
eBay.
The police weren’t very helpful
and didn’t even ask eBay questions
when they could ask. As a result,
we didn’t know the extent of the
theft which could have been tens
of thousands of pounds.
Fortunately, it didn’t take the
company down but persistent
theft, not doing the hours claimed
and similar scams can badly
impact your business. In the worst
case they can cause it to fail.
It’s worth watching out for
suspicious behaviour or a lifestyle
not justified by the salary. In addi-
tion, spot checks on where people
are can help too. Alternatively,
you could use tracking technology
from a company like mine, Pow-
ered Now, to help confirm that all
commitments are being kept.
The most damaging and most
common fraud is when the person
who runs the finances misbe-
haves. A red flag is when they
never take holidays. They may
seem ultra-loyal, but it is possible
that instead they are covering
their tracks.
One way that I have tried to
combat this in my own business-
es is to ask occasional questions
about items on the bank state-
ment. Knowing that you are fol-
lowing what’s going on is proba-
bly the quickest and simplest way
of reducing the chances of fraud.
Real accidents
Health and safety requirements
can seem a pain but it’s true that
since H&S has risen up the agen-
da and compliance has become
more onerous, accidents at work
have fallen.
It’s important to realise that
leaving aside the moral duty to
your staff, there will be severe
consequences for the business
if someone is seriously injured
or killed. That’s why, as well as
doing whatever paperwork and
tick-boxes are required, you
should encourage a real culture
of care among your team. Think
of what the highest risks are and
try to mitigate them.
If an accident happens which
could reasonably have been
prevented, you may have opened
yourself up to a charge of corpo-
rate manslaughter.
Risk of employees
taking you to an
employment tribunal
If you’ve been raised watching
Alan Sugar and Donald Trump
tell people that “You’re fired” it’s
easy to think that this is the way
to do things in the real world.
Unfortunately, in the UK, nothing
could be further from the truth
and an employment tribunal rep-
resents a big business risk.