Whether you are running a graphic / web design studio, working as a software developer or profi blogger, or as a Consultant in SEO / IT your main focus will be acquiring new clients, fulfilling deadlines and jobs and getting paid, plus the tedious background work, that many don’t really like to do, like bookkeeping, accounting and filling out tax declarations. Usually there is so much to do that it’s easy to forget about securing all your hard work against the risk that something could go wrong and, depending on your business sector, there are damages that could lead to unnecessary high costs or, in the worst case, bankruptcy.
A Risky Business – Risks when run your own business
As an employee, risks and responsibilities are, to a greater degree, strongly reduced in comparison to those of a self employed person or business owner. If you are running your own business, as sole trader or small to medium business, responsibility and risks lay entirely on your own doorstep and no-one else is going to take the wrap for you or make sure that your liabilities are covered. The number of risk factors are also many including common situations like water damage in the office through a leaky roof. Some risks are however related to the job in hand and these are frequently not taken into account or simply ignored, at least until the first time that the sh** hits the fan. “Popular risks” in this sector include:
- Print errors: working in the print business comes together with the risk that the finished printed material can go wrong. If the error lays with the printing company, they will usually be insured against such things, if however the error comes from your source data, then the problem is yours. If you got the work signed off by the client, maybe you won’t be left alone with the problem but even then it can be touch and go. A logo printed in the wrong shade won’t come good with the customer even if you do have ingenious ways to talk around it. The only way you’re keeping the customer happy is to get a rerun. This can be costly and that could be a cost that will break you.
- Data Loss: some jobs require specific data which can often contain highly sensitive information. While the most of us do all we can to keep such documents and information safe from harm and prying eyes, sometimes Murphy’s law just strikes: documents get stolen, get accidentally destroyed or just “go walkies.” If this happens to your own stuff it’s bad enough but what’s even worse is the pointy finger of your client, let alone his lawyer, when the data belongs to him.
- Hardware damage: instances in which we could cause potential damage to client hardware occur seldom, in the case of software development there could however be a small risk depending on the work you’re expected to carry out. A high risk lays, however, in the loss of our own hardware through occurrences like thunderstorms, water damage or accidental damage.
The many advantages of Internet come packed together with disadvantages and pitfalls; alone the potential threat of virus or hacker attacks leaves a Internet related business vulnerable to damages and loss of data.
A big risk is the violation of third party intellectual property rights. Even if you are conscientious and careful, there are so many gray areas that the risk remains – for example when using images or photography that are offered as free to use from a third party who doesn’t have the right to give you this permission. That’s already too late when the caution comes through the post because you didn’t acquire the correct usage license from the correct place. Even when you buy the license directly from an authorized distributor, some terms and conditions often contain gray areas that can lead you into trouble for using unwittingly it in the wrong way or in the wrong place in a way. Violating a third party intellectual property rights can lead to cautions from lawyers and bring you into financial trouble.
Not every country respects policies like “fair use” either, for example Germany. This makes it almost impossible to move around in places like Google+ and Facebook where clicking the “Like” button posts graphics and text snippets that can lead to prosecution not to mention the trouble that can come with third party cookies from the said platforms.
Falling Ill whilst Self Employed
Falling ill whilst self-employed is no laughing matter. No work, no incoming. This is one of the most serious risks you can be faced with, this hits especially hard if you have family and/or your own property to finance. You may also not be entitled to help from social benefits but this naturally depends where you live.
In Germany, for example, you can opt for a top up on your health insurance to cover for illness which, although the incoming is not equal to what you would usually earn, it’s certainly a big help. The big catch, there always has to be one, is that you have to ill for more than 6 weeks before you can claim but at least this does offer security for long term illness and therefore one of the most important things you should think about. Maybe you have a similar service where you are, asking doesn’t cost anything, at least … ?
Is it Possible to Protect?
Regular back-ups of computer data and copies of important documents stored in a safe place are going to help you to secure data to a certain point. Some back-up systems also offer back-ups of back-ups, just to be sure. Locking up securely and alarms help too but there are some things that just can’t be anticipated.
It is possible to insure against such things today. My search for infos brought up a couple of examples where you can get an idea of what’s available, if you look at the business insurance from Hiscox you can already get a good idea of what is possible to cover, at least by them.
The responsibility of being self employed includes the risks too and these can happen in the wink of an eye, and usually when you’re not ready for it. The wrong decision, the wrong advice, an attack from a third party, or accidents – even if you do your best, you can’t always avoid it. It is, however, reassuring to know that you can protect yourself to a certain point with special insurances, be it for your health or at your workplace, once again, the decision to do so, or the risk not to, is one more responsibility to add to list.