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Navigating Liability Management As A Business Owner

Operating a business in an ever-evolving financial landscape in the post-pandemic era is a tough nut to crack, especially with the array of challenges and uncertainties that stem from the economic downturn, complexities arising due to digitisation, supply-chain issue and changing government regulations, etc. It is difficult to carry out the business operations that impede the ultimate financial success and disrupt the goal planning process.

Equipping your business with efficient risk management strategies is essential before you step ahead to navigate this volatile environment, and doing this all by yourself might jeopardise your productivity in daily operations. Therefore, hiring certified financial advisors or experts will be a concrete way of ensuring that you encapsulate your business finances against the waves of uncertainty.

You can narrow down the ideal financial advisor by following the below-mentioned steps:

  • Conduct an interview session with the shortlisted candidates to help them understand the organisation’s financial objectives. They should also clearly understand your insurance needs, future retirement plans and level of risk tolerance.
  • Although certificates don’t define competence, it is ideal to select professionals who are certified with designations like certified financial planners (CFP), chartered financial analysts (CFA), certified public accountants (CPA), and chartered life underwriters (CLU). Their licence speaks volumes about their expertise and dedication to the respective field.
  • Select the mode of compensation that aligns with your existing protocol and ensure to pay a reasonable commission not only for the expert guidance on robust financial planning techniques suggested by them, but also for the extensive network of some more specialised partners in their field, such as commercial insurance agents, benefits consultants, IT & cyber security experts in the financial domain, etc.

What should be your approach when planning to mitigate risks associated with your business?

Risk factors over regular business operations include preventable, inevitable, strategic, internal and external factors. The recent pandemic was a harsh reminder of not ignoring the aspect of risk management and preparing for the worst while pursuing the best. The following aspects of risk should be taken into consideration while engaging new risk management partners:

  • Financial risk – pondering over the issues like how growing rates of inflation, economic downturns, and interruptions to business cash flow will impact the goal of meeting customer expectations are the key considerations to be taken into account. Financial risk encompasses several domains, such as market and economic analysis, internal controls and audits, debt and cash flow management, etc.
  • Liability risk: liability management in business includes considering situations like unprecedented weather conditions, major accidents, lawsuits, or how any such inevitable situation will hamper the regular business operation. Always look for an insurance policy that covers all such miscellaneous issues.
  • Partner risk: identifying the track record of financial institutions or partners managing your company’s risk and analysing their expertise in terms of their financial strength is essential to decide whether or not you can count on them.

You might flex about your risk-taking nature as a budding entrepreneur, but that is not wise if you’re capable of hiring professional support to manage certain aspects of your business. Always count on a risk-management partner who is qualified enough and willing to strengthen your organisation’s resilience.

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