The 5 Worst Things That Could Happen to Your Small Business

Even if you are a remarkably savvy entrepreneur — even if your small business idea is sound and your strategy is strong — your business is subject to several risks that could cause it to fail. Because many of these risks are extremely difficult to mitigate and all but impossible to eliminate entirely, many business leaders consider them some of the worst things that can happen to a small business, especially when it is still relatively young. If you want to keep your business safe and secure as it grows, you need to be prepared for all of the following potential risks:

Natural Disaster

The climate is in the midst of a widespread, rapid and unprecedented change, and as the change intensifies, natural disasters of every variety have been on the rise. Wildfires, floods, landslides, tornadoes, cyclones and hurricanes, ice storms and more have caused hundreds of billions of dollars–worth of damage in the U.S. alone over the past five years, and because climate scientists do not anticipate any reduction in the number of natural disasters in coming years, business owners everywhere need to have strategies for protecting their businesses from these events. If possible, you might consider relocating your business headquarters to a region that is less impacted by destructive natural disasters, like New England or Alaska, but the truth is that the effects of climate change are inescapable. You need to have another strategy in place for protecting your staff, inventory and other resources as climate change continues to escalate.

Theft or Vandalism

It is difficult to find accurate estimates of business losses due to theft because so many small businesses opt to keep silent about their victimization. The fact is that most businesses experience high rates of theft, either due to external actors like shoplifters or else as a result of internal theft by employees. Eliminating theft entirely is a pipe dream; while you should work to create a workplace culture that disincentivizes employee theft and install security systems that deter outside thieves, the truth is that some amount of your inventory and supplies are always at risk of walking away. To prevent small losses from adding up over time, you should acquire appropriate small business insurance and make a habit of reporting the losses your business experiences.


A customer slips and falls in your store. Or maybe an incorrect calculation causes trouble for a client. There are many reasons why your business might be subjected to a lawsuit, and it is difficult for a business leader to predict and mitigate them all. The cost of litigation can range dramatically, from a few thousand dollars for small and indefensible claims to hundreds of thousands or many millions for more significant concerns. Because your small business cannot afford to waste time or resources on lawsuits, you need to have a small business insurance policy that adequately protects you from the most common risks in your industry.

Worker Injuries

Never does a small business owner hope for a member of their staff to be injured at work, but workplace accidents still happen. You should do what you can do to reduce the likelihood of an employee injury with appropriate safety precautions on all work sites and repeated trainings for the entire workforce. Everyone on your staff should know how to recognize hazards and where to report them for immediate correction. By making safety a priority for your small business, you may be able to grow your business without risking the health and well-being of your workforce. Still, even with these other precautions, you should seriously consider equipping yourself with an insurance policy that includes worker compensation. Then, if a member of your team does become injured on the job, you can cover their medical bills and pay without breaking your budget.


Almost every industry is subject to some degree of regulation, and maintaining regulatory compliance is essential for small businesses that cannot afford to pay fines or suffer other sanctions. In some places, small business insurance itself is a requirement for certain types of high-risk operations. With consistent review of regulations impacting your small business, you should be able to avoid the threat of non-compliance for as long as your doors remain open. Some of the worst things that can happen to your small business are also some of the most unavoidable. Fortunately, with some preparation, you can protect your business from the worst risks and continue operating into the future.


Hot Topics

Related Articles