5 Smart (and Easy) Ways to Minimize Business Risk
by Tracy Work
Running a business is all about taking calculated risks. But some risks – like lawsuits, contract disputes, or compliance headaches – aren’t worth taking. The good news? A few simple moves can protect your business without disrupting your workflow.
Here are five not-so-obvious ways to reduce risk and keep your business running smoothly.
1. Test Your Contracts with a “What If” Scenario
Most business owners sign contracts and forget about them – until something goes wrong. But have you ever stress-tested your agreements? Try asking:
🔹 What if my biggest client cancels tomorrow?
🔹 What if a vendor misses a deadline and costs me money?
🔹 What if a customer refuses to pay?
If your contracts don’t protect you in these situations, they need work. A solid contract isn’t just a formality – it’s a safety net.
Tip: Pick one key contract (client agreement, vendor deal, lease, etc.) and run a “what if” test. If it doesn’t protect you, it’s time for a legal tune-up.
2. Lock Down Your Intellectual Property Before Someone Else Does
Your business name, logo, or even your signature process could be your biggest asset – until someone else claims it. Many business owners assume they own their brand just because they use it. That’s a mistake.
🔹 Reality check: Just having a website doesn’t mean you legally own your brand name. Without proper IP protection, a competitor could register it and force you to rebrand.
Tip: Search your business name and key trademarks in the USPTO database. If they’re not protected, consider registering them before someone else does.
3. Give “Handshake Deals” a Deadline
It’s tempting to do business on trust, but handshake agreements (or vague emails) lead to disputes. If someone hasn’t signed a contract within 30 days, assume they won’t – and move on.
🔹 Why? A delayed contract often means misalignment. Plus, the longer you wait, the harder it is to enforce what was agreed upon.
Tip: Set a personal rule: If an agreement isn’t in writing within 30 days, revisit the terms or walk away. This simple policy reduces ambiguity and legal risk.
4. Audit Your Website Like a Lawyer Would
Your website is more than just a marketing tool – it’s a legal liability if it makes the wrong claims or lacks the right disclosures. Hidden risks can include:
🔹 Implied guarantees – Do your product descriptions accidentally promise results?
🔹 Missing disclaimers – If you give advice (even indirectly), are you protected from liability?
🔹 Outdated privacy policies – Does your site say you “never share data” while using tracking tools?
Tip: Take 10 minutes to read your website as if you were a customer – or a lawyer looking to sue. If anything sounds too absolute (“guaranteed results,” “100% safe,” etc.), revise it.
5. Create a “Who Can Sign What” List
One rogue employee or partner signing the wrong document can put your whole business at risk. Many companies have been blindsided by unauthorized commitments that they had to honor.
🔹 Real risk: A salesperson agrees to a refund policy you never approved. A manager signs a contract with bad terms. Suddenly, you’re stuck.
Tip: Create a simple internal policy: Who is allowed to sign contracts? What kind? How much can they commit to? Even a one-page guideline can prevent costly mistakes.
Final Thought
Business risks don’t come from the obvious places – they creep in through small oversights. A few smart adjustments today can save you major headaches tomorrow. If you need help reviewing contracts, protecting your brand, or tightening up policies, I’m here to help. Let’s make sure your business is as protected as it is successful.