How All Female Entrepreneurs Should Protect Their Personal and Professional Assets
Advances in internet technology and the low price of access and computers means more and more people can start their own businesses. However, with being an entrepreneur comes a set of risks you may not have when working for an established corporation.
In the annual State of Female Entrepreneurship Report, researchers found that 66% of surveyed respondents mentioned they had trouble getting the funding needed to succeed. It’s difficult for any entrepreneur to get ahead, but women may have to struggle even more. The last thing you want is to leave your personal or professional assets at risk should a major catastrophe occur.
What types of events should you protect your assets from? Know what to do if there is a financial collapse, you experience a long-term disability, or you pass away. You’ll want to protect your business and personal finances and pass your hard work down to future generations.
Create a Business Succession Plan
Let’s talk about the worst-case scenario first. What happens if you pass away, either after a prolonged illness or unexpectedly? Is there someone you can appoint to keep your business going? Who benefits from all your hard work?
Take the time to think through who you’ll leave your assets to. If you have children, the answer might be obvious. But if you do not, consider nieces and nephews, cousins, and even some of your top workers who’ve invested their heart and soul into helping you build your company.
Whatever your plan, hire a lawyer and write everything out. There are thousands of stories of people dying before their time and their business failing because they didn’t leave a plan behind. The company and all your assets automatically go to your nearest relative if you don’t specify differently.
Invest in Life Insurance
Your personal assets should include a life insurance policy. Be aware when you name a beneficiary that the person can spend the money on whatever they’d like. Your intention might be to have the money help your employees, but there is no promise they will use the funds the way you would like.
If you want to be sure a portion of the policy goes to someone specific, it’s best to name them as a co-beneficiary and set aside a percentage of the policy in their name.
Life insurance is one of the least-expensive assets you can purchase. Around 44% of millennials believe it costs more than it does, overestimating the fees by 500% on average.
Prevent Cyber Attacks
Small businesses are at risk of hacking. If your business operates solely online, a cybersecurity breach may be detrimental to your entire operation. Regardless, you don’t want your customers’ private data exposed.
There are numerous ways you can protect your business from hackers:
- Train your employees to recognize phishing attempts.
- Change passwords often.
- Invest in cloud-based computing with top-notch security.
- Keep only information you must have to do business.
- Delete old files.
- Change access points whenever an employee leaves, even if they depart on good terms.
Think about the ways you might put your company at risk online, such as logging in at a public location and not hiding the password. Be aware of the threat and protect yourself from cybercrime.
Prepare for a Natural Disaster
Are you ready if a natural disaster hits your store? No matter your company’s location, your area may be prone to something. In the midwest, tornadoes sometimes strike. On the west coast, there is the fear of a significant earthquake. Other areas suffer from flooding and hurricanes.
One could even argue the COVID-19 pandemic is a natural disaster no one saw coming, which impacted nearly every business. Think about how you’ll keep operating if you have to shut your doors for weeks on end:
- Do you have a backup plan to get orders out in time?
- Can you move to an e-commerce model easily?
- How will you reach your customers if you can’t get to your place of business?
Don’t forget staffing issues. If your employees can’t get to your building, how will they work anyway? Do you have remote options in place? Think through every possible scenario and create a plan.
Protect Intellectual Property
You may run a business where you create intellectual property, such as books. Even if you write content for your website, U.S. copyright law protects it to an extent. Unfortunately, you’ll run into people who either don’t understand they can’t use your work without permission, or they intentionally steal it.
Be aware of the laws and who the literary attorneys are in your area. You may want to invest in a form letter to send when requesting people take down material they’ve copied. Most will comply after receiving the letter.
The law can be a little gray, so make sure you understand patents and copyrights and how they apply to your business.
Save for a Rainy Day
No matter how well you prepare, you may run into a situation where you have an emergency. Anything can happen, such as the economy turning or your building needing repairs. Think about how you’ll cover expenses if you have a few weeks without income.
When times are good, put aside a portion of your profits. You may find you have an opportunity to expand or buy products at a reduced rate. Cash flow won’t be an issue during those times if you have a fund in place.
Tap into local help. Join the area chamber of commerce, find a mentor who has built a successful business, and embrace any free tools the Small Business Administration offers.
And if you keep your finger on the pulse of your business, you’ll be able to make adjustments before small problems become catastrophes. The world needs more female entrepreneurs! You might as well be a highly successful one.
This article was provided by Eleanor Hecks
Eleanor is editor-in-chief at Designerly Magazine. She was the creative director at a digital marketing agency before becoming a full-time freelance designer. Eleanor lives in Philly with her husband and pup, Bear.