5 Main Risks Businesses Face in the Digital Age
Running a business is like a game of chess. To beat your opponent, you must always think at least one move ahead. The only way to keep your business up, running, and profitable in the digital age is to anticipate various risks and head them off before they occur. Thinking ahead and protecting your company in advance can save you stress, time, and money. Use this list of five common risks businesses often face today to start planning your prevention strategy.
- Legal and Compliance Breaches
Modern businesses have to navigate through more red tape than ever before. Liabilities, lawsuits, and consumer expectations have raised the stakes for business owners and made it necessary to enact dozens of operating rules and regulations. A business has to comply with various regulations regarding data privacy, or else risk huge fines. Health Insurance Portability and Accountability Act (HIPAA) audits, for example, can result in million-dollar penalties for companies that fail to comply. Securely storing and handling your records is required task in order to remain compliant.
- Ineffectual Business Strategies
Lack of strategic planning will torpedo even the most successful and lucrative businesses. While any business strategy is better than none, the most effective strategies stay flexible, scalable, and adaptable to change over time. You must retain the ability to adapt your strategy as new technologies, trends, and best practices impact your industry and consumers. Choose scalable, flexible business options to stay ready for anything.
- Failures in Daily Operations
Your company must be able to withstand power outages, fires, natural disasters, security breaches, and other potential problems. A breach or records loss can do irreparable harm to a small business. Backing up data in a secure offsite location is a smart, effective, and affordable way to conquer safe daily operation at your company. Storing data offsite with a records management company offers an added layer of protection.
- Sudden Financial Losses
Nothing kills an organization faster than financial risk. Many businesses fail when it comes to developing a plan for how the company should handle an unexpected financial setback. You might have a firm understanding of how much money goes in and out each day, but what would happen if you suddenly lost your main client or had a large, unexpected expense? Smart leadership teams put systems in place to deal with potential losses in a way that’s scalable for the brand.
- Reputational Harm/Bad Publicity
The reputation of a company is one of its most valuable assets. Unfortunately, it doesn’t take much for an organization’s brand equity to be lost if questionable business practices (that put shareholder investment at risk) come to light. Take last year’s immense Equifax data breach, for example. This failure tarnished the company’s reputation such that the company’s stock price dropped more than 18% in a matter of days. Data breaches like this are a particularly sensitive topic and today’s consumers have little tolerance for slip ups in data security.
Proper data handling practices must be baked in to every business’s operating procedure. Those that take shortcuts with data security put their company’s reputation at risk. Securing the services of a reliable data, document, and records management services is an essential part of managing an organization’s reputation risk.