How to Protect Your Home-Based Business from Risk
There are so many benefits of running a home-based business (especially during a pandemic).
With COVID-19, corporate downsizing and remote working on the rise, no one can rely on a steady and stable paycheck any more.
Millennials around the world are actively seeking ways how to make money themselves, without having to rely on anyone financially.
A home-based business can offer the flexibility we’ve been craving for years:
• Choose your own hours, location and direction of your business
• Test out a new business idea without a lot of risks
• A home-based business is cheaper to run
In this article, we looked at the benefits of running a home-based business in the post-COVID era, today, we covering the risks of running a home-based business and what can you do to eliminate them:
1. Protect your business against cyber-crime
Cyber-crime is on the rise.
Criminals like to attack smaller or newer businesses because these businesses are unable to have the same level of security and protection as big established organisations, so it’s easier to hack into their systems.
While a bigger business might outsource security, install expensive equipment, or even hire an in-house team, you might be on your own.
So – what can you do to protect yourself?
• Use different, hard-to-guess passwords for all your business accounts
• Never leave your work computer unattended when you are away
• Use Data Loss Protection software to prevent data leaks
• Keep your home network safe with password protected and encrypted WIFI
• Install firewalls and antivirus software and make backups
2. Understand the laws & regulations regarding your business or industry
Failing to understand the laws that your business is subject to means that you may inadvertently break one and find yourself facing costly and damaging legal action.
Do you provide your services through a limited company?
If the answer is yes, HMRC needs to be convinced you’re not using your limited company to disguise a relationship with your client, which would otherwise be that of employer and employee.
An accounting software Crunch will demystify this for your with this ir35 calculator.
Other laws that you need to consider as a home-business owner include licensing and permissions, online GDPR laws, employment law if you hire staff – even online, taxation law and property law.
The relevant laws will depend on the nature of your business, but it’s important that you take the time to learn the ones that affect you.
3. Take out the appropriate insurance
Depending on the nature of your business, there are many useful insurances available for home-based businesses.
Some of these include:
• Public liability insurance
If you interact with the public in any way, you should take out public liability insurance. You may also want to learn more about options regarding keyman insurance HMRC and small business insurance.
Because your business is home-based, you should regularly update your home insurance and contents premiums to make sure they are accurate and include any expensive equipment kept in the house.
• Product liability insurance
If you’re running a product-based business, it’s a possibility that an item you sell will cause injury or illness to a customer; or it could cause damage to their personal property.
It’s easy to assume that it won’t cause any harm or damage, but accidents happen.
• Employers’ liability insurance
If you have employees – or plan to hire them soon – then you’ll need an employers’ liability insurance.
Whether your staff are full-time, part-time, casual workers or contractors, you are legally required to have employer’s liability insurance. Not having it in place will result in fines of up to £2,500 per day.
• Personal accident insurance
If your business can’t run without you and you are financially responsible for the whole family, then consider taking out personal accident insurance.
If you get into a serious accident, it’s possible that you’ll be out of work for a while.
Personal accident cover provides you with money for a day-to-day living while you’re out of work, as well as covering the cost of any medical expenses.
4. Keep your home extra secure
When you run a business from home, your home security takes a new level.
It might sound basic, but simple security measures such as locking your doors and windows when you leave home, and adding extra locks to your office or workspace, can help to protect your business.
You should also make sure expensive equipment and supplies are kept away from windows and out of sight, and that any packaging is broken down and put neatly in your bins, so as not to advertise that there might be expensive goods in your home.
If your business is customer-facing, you can’t hide the fact that it operates out of your house, but you should still take sensible precautions to ensure you aren’t advertising expensive goods to anyone passing by.