5 Risk-Managing Systems For Firms In New Industries

A business is as complex as a machine, with multiple moving parts and logical principles that keep it in motion. However, no machine is going to function for long without risk mitigation systems. A car without strong suspension is going to be at mercy of uneven roads, and a fire suppression system is nothing without multiple inputs from detecting mechanisms.

As such, a business hoping to make headway in a newer industry needs to be the most risk-managed of all. That’s because not only do you have to contend with the very many risks of usual business operation, but also plan against those that aren’t visible yet.

In this post, we’ll explore some basic principles and systems to put in place, guiding you through that process.

Merchant Accounts

If you’re entering a sector that still feels a little unfamiliar to the standard purvey of financial providers, payment processing can become a stumbling block. That’s why a dedicated CBD merchant account, for instance, can be such an important step in adhering to many stricter requirements.

If appropriately assigned, it should provide a tailored structure for your transactions and keep your business from being frozen out of the most usual online gateways. Even if you’re not in a restricted sector, researching providers who understand your risks can save you from disruptions, and sudden, seemingly unfair ones at that.

Virtual Addresses

A virtual address is a capable tool for risk management because it separates your personal space from your company’s correspondence. This can be useful for privacy, credibility, and in some cases, taxation depending on what markets you operate in. 

After all, having a professional front to present while protecting your home details is a simple step, but one that makes scaling feel much more sustainable. And for businesses that don’t yet have the capital for physical offices, it’s also a bridge that keeps operations moving without too much overhead.

Insurance Structures

No matter how agile your strategy, there are always factors outside of your control. That’ll be a bugbear to worry about no matter what business you run or what field you’re in. That’s why having graded and thorough insurance is the backbone of resilience, and the type you need often depends on your field. 

Some examples include professional indemnity, liability, and business interruption cover at a minimum, as this can all safeguard you when the unexpected happens. The peace of mind you get from knowing you’re not a single incident away from folding and undergoing endless legal or recovery cost is more than worth the paperwork it takes to arrange.

Legal Counsel & Compliance Checks

It can be tempting to put legal advice on hold until something actually happens, but that’s the worst time to look for guidance. If you’re in a developing industry that can hold you back like nothing else, as by the time you find some kind of counsel, the issue may have developed significantly.

Moreover, having outsourced help on hand can help you ace any compliance checks expected of you, which is as much a protective measure as it is a corrective one. If you’re able to continue spotting weak points in your contracts or ensuring you’re ahead of regulatory changes or disputes, you remove risks more appropriately.

Contingency Partnerships

No business can be fully self-sufficient, nor should it try to be. Thanks to that, having a few contingency partners lined up is a good preparation, and helps you when an issue takes place and as a result, you feel suddenly blindsided. For example, a logistics backup when your main provider is delayed, or a temp staffing agency that can fill a sudden absence, means you’re never entirely at the mercy of circumstance, as every business is at some point. You might assume you’re never going to have such bad luck, but Covid knocked out those presuppositions from almost every business manager worldwide.

We’re not suggesting you become paranoid, but rather structure your business so that when one door is closed, another is immediately available to step through. Building these relationships ahead of time, even if it’s just vetting suppliers laboriously again, even if they feel like a safety net you might never use, ensures you won’t be caught scrambling at the exact moment you need calm. At the very least this kind of effort will give you a cool head in such circumstances.

With this advice, we hope you can more easily implement risk-management strategies for new companies operating in shifting, changing industries. While the seas might feel choppy now, finding new land and staking your claim in a new area can sometimes bring fantastic dividends.