What is your risk tolerance?
Starting a business inherently comes with risk… if not, everyone would be in business. Risk comes in many different forms. Risk that you fail. Risk that you grow too fast. Risk that you get sued. Risk that you have to sue. When you created your business plan, you surely thought through many of the risks you would be facing in your industry and among your competitors. If you are in the process of business planning, we stress that you work through these risks. In either case, you need to understand your legal risks within your industry and within your specific business operations. As part of your decision-making on your operations, you need to have an understanding of your risk tolerance. That is, how far are you willing to push the boundaries? Unfortunately, many of your legal risks will come in the forms of rules and regulations – many of which will not be ‘black and white’ so to speak. Too often, small business owners or soon-to-be owners overlook pinpointing their threshold and, therefore, end up going far beyond the risk barrier they should have; thus, setting themselves up for fines, penalties, and lawsuits. To help assess your risk tolerances, you should know the legal risks – know what crossing that grey area really means.
Don’t Live in Fear
Many lawyers paint pictures of gloom and doom to their business clients. In most small businesses, you shouldn’t need to live in fear everyday of lawsuits or administrative penalties. That is, of course, if you are operating inside of your risk tolerance and your risk tolerance is set inside the barriers of liability. How do you set this limits? You have your businesses risks assessed. You need to know where the grey areas are and what are the consequences of operating in and beyond those areas.
How We Assess Your Risks
At Carpenter Gandhi, we assess your risk by seeing how your business is run and by asking questions – lots of them. We review your documents and we analyze the regulations that are applicable to your industry. We then lay out an analysis for you so that you can see where the grey areas lie and what the risks are for operating in this area as well as the consequences for daring to surpass it. If there are areas within which you would like our guidance in getting set on a better path to reduce your risk and put in place controls to keep it that way, we are happy to help. Our goal is to work with you and your employees to get your operations set up to drive profits without worrying of crossing into a risk-prone area. Taking risks can be a great attribute for an owner to possess, but taking legal risks without even knowing the consequences is just plain reckless.