It is common cause that doing business is risky; anything can go wrong, some of which have little or nothing to do with the business itself. For this reason, a business owner must take all the steps he/she can to minimize this risk. There are various tried and tested methods to limit these risks; focus on the following areas:
- Limiting personal liability
- Splitting business risk and personal involvement
- Keeping your assets separate from your liabilities and debts
- Limiting risk to areas where risk should be; risk entities
- Using formal structures to utilize statutory protection mechanisms
- Protecting your income through tax structuring and retention strategies
- Demonstrating fiscal and administrative responsibility
- Operating within the confines of the agreed model
When a business implements and utilizes the aforementioned, it optimizes its chances of surviving adverse situations.
