Assessing risk is a crucial part of running a company. First, you list all the threats out there. Then you take each one and work out the likelihood it could happen and the consequences if it does.
Low probability, low consequence events are not your priority. Anything that is a high probability high consequence is.
According to the Small Business Administration, the likelihood you face business litigation in any given year is between 36% and 53%. That is a high probability. The consequences of a successful action against you could also be high, depending on what the lawsuit is for. So you need to make avoiding litigation a priority.
Reducing the risk of litigation is often simple
You cannot provide for all circumstances, yet you can do a lot to reduce the chance of litigation. For example, if you let customers into your store seconds after you mop the floor, the possibility of someone slipping and suing you is high, and the chances you need to pay out a large sum are also high. Yet, by waiting a few more minutes until the floor is dry before you open and consistently putting out wet floor warning signs, you drastically reduce the chance anyone does slip.
By opening a business without the correct permissions in place, you run a high risk of the authorities noticing. That could lead them to impose financial penalties and shut you down, causing loss of income. Yet, to avoid that, all you need is to ensure you have all the licenses required before you open your doors for trade.
You cannot guarantee your business will succeed. Yet, by taking action to reduce the risk of litigation, you increase the chances it does.
