08 Jul Entrepreneurs, Protect Your Downside
It’s not about living in fear. It’s about minimizing risk. Protect your downside.
We love helping entrepreneurs build stuff.
But we hate watching something someone has built fall down. And a lot of collapses don’t have to happen—if a couple of steps had just been taken…. To get what I’m saying, imagine designing a literal, brick-and-mortar building. You know that, sooner or later, a fire is could start. You don’t want the place to burn down, so you include a sprinkler system. You want don’t anyone to break in, so you include locks on the doors and windows, maybe an alarm system. You don’t want high utility bills, so you include energy efficiency. Thinking about what could go wrong and how to lower the risk is part of the design process.
Obvious, yes? But many of the entrepreneurs we talk to don’t think to go through the process of identifying and minimizing their vulnerabilities in different areas. They may protect themselves from a fire, but not from…
What if a key person leaves or becomes incapacitated? What if the company gets sued? What if your assets end up in the wrong part of some natural disaster? Sooner or later, something is likely to go wrong. What plans and agreements can you put in place to protect yourself and what you have built?
There is insurance. There is disaster planning. There are contracts and release forms. There is writing down exactly what you want your employees to do (and not do) so that everybody is clear about their responsibilities and your standards. You can’t entirely eliminate risk, but you can think ahead and protect yourself.
Look, we’re in insurance, so we know how tough these conversations about risk and loss and frightening possibilities can be. We also know that getting insurance, hiring lawyers, drafting security procedures, and all the rest of it can be difficult, time-consuming, and expensive.
But, honestly, losing your business to some preventable problem is a lot worse.
So, protect your downside. Because we like your ideas. We’re excited about your businesses. We want to see you succeed. And the only way success is going to happen is if you think ahead and protect yourself.