Top 5 Threats for Small Businesses


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There is a statistic that 9 out of 10 small businesses fail within their first five years of existence. To some, these numbers may seem too pessimistic to be true, while others wonder how even that 1 in 10 is able to survive in such a hostile environment. You see, when you’re running a small business, it constantly seems as if the deck is stacked against you from the very start.

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There are so many things that are going against you and they all seem to abide by Murphy’s Law (anything that can go wrong will go wrong) most of the time. Still, the first step in avoiding the trap is knowing that there is a trap in the first place. With this in mind, here are the top five threats for small businesses.

1 Employee loss

Employee loss

One of the major problems of any small business is that it usually runs on a skeleton crew. Sure, this lowers the cost of their overhead, seeing as how they have fewer salaries to pay, fewer bonuses to cover and, overall, fewer management issues to deal with.

However, this brings a few troubles on its own. Imagine a scenario where you’re running a four-person operation. What happens if one or two of your employees have to take a sick day (which isn’t that uncommon during the flu season)? Even worse, what if the most talented of your employees decides to look for a gainful employment elsewhere?

In order to prevent this from happening, there are a couple of things you have to keep in mind.

First of all, employee retention is as important as hiring. In order to improve this, you need to

A) create a more stimulating work environment,

B) give your employees a chance to grow and

C) be a better boss. According to various surveys, most employees don’t leave their jobs but their managers.

Needless to say, there are more than a couple of ways for you to prevent this from ever becoming a major issue.

2 Overinvesting


Another major problem that a lot of small businesses make is overinvesting in their infrastructure. A lot of people mistake a temporary workload increase with business growth, which makes them overinvest.

They move into a bigger office, hire more people and purchase new equipment. Unfortunately, in these first moments, you can’t always differentiate between a fluke and real growth. In order to avoid overinvesting, you can outsource some of the excess work, hire freelancers and remote workers as a temporary workforce and go with options that give you scalability with a lower risk-rate.

3 Bookkeeping


While it is true that even a layman can take care of their own books, this is usually not the best course of action. First of all, professional bookkeeping is not nearly as expensive as you may believe and it brings more than several perks.

For instance, different company structures pay different taxes, which might cause a no small amount of confusion with a layman accountant. Then, on your own, you may not be aware of all the possible tax deductions that your small business might be eligible for.

Finally, keeping your personal expenses and your business accounts is particularly hard if you are running a sole proprietorship. Needless to say, this is one more reason for you to look for a professional accountant.

4 Business interruption

Business interruption

Even for a major company, a downtime might cause a substantial damage but, for a small business, this could be the end. In a situation where your business closes down due to a disaster you were unable to control like forced relocation, flood or fire, you might not be able to just pick up where you left off.

This is why about 40 percent of all small businesses never reopen after such an occurrence. Now, while obsessing over such an issue is never a good thing to do, you must plan for the worst-case scenario. In fact, you can even include a business interruption coverage into your insurance policy and have your business covered even in this scenario.

5 Office security

Office security

Finally, one of the greatest mistakes that small business owners make is believing that they are too insignificant to become a target.

On the other hand, whereas major corporations usually have ironclad systems installed in their offices, small businesses pose a low-reward but also a low-risk opportunity for burglars, hackers and similar malevolent groups. Nevertheless, in the era of smart security, JD Security offers the option of Genetec Omnicast, which allows a full customization of your surveillance system to fit the needs of your business.

While the list goes on and on, just looking out for these five threats is bound to significantly improve your chances.

Also, while small businesses, due to their delicate situations, are the most susceptible to these threats, there aren’t any thresholds after which they stop being in danger. In other words, any of these above-listed issues is as hazardous for a major conglomerate as it is for a small business.

The only difference being the number of resources that can be poured over into damage control.

For this reason alone, small businesses have to be extra careful around them, while their larger counterparts can afford to be careless every once in a while.


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