Industry News
Risk beyond your comfort zone
» SUCCESSFUL ENTREPRENEURS ARE
risk takers, but their risks are both
understood and managed. 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
considered 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 problem 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.
Alternatively, 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.
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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 motorbike. 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 addition, spot checks on where
people are can help too. Alternatively,
you could use tracking technology from a
company like mine, Powered 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 misbehaves. 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 businesses is to ask occasional
questions about items on the bank
statement. Knowing that you are following
what’s going on is probably 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 agenda 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
corporate 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 represents a big business risk.
The solution does take some time and
involve some cost, but is well worth the
effort in reducing your risk.
You need to have well drawn up
employment contracts and a company
handbook and use them in 100% of
cases. You must also make sure that you
have carefully filed copies of the related
paperwork with signatures. If there is
no contract in place a court will deem a
disadvantageous one to be in place which
is much worse.
When you come to disciplining
someone, get professional advice before
you start the process. You may think
you know what you are doing, but it’s
incredibly easy to say something that will
lead to a painful and expensive loss at an
employment tribunal. In my experience,
MAR/APR 2020
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