5 Common Risks SMEs Overlook — And How to Address Them
Running a small or medium-sized enterprise (SME) comes with its fair share of risks. While most business owners focus on obvious challenges like competition or cash flow, there are other risks that often fly under the radar. Here are five commonly overlooked risks and how you can address them before they become major problems.
1. Cybersecurity Threats
Many SMEs believe they’re too small to be targeted by cybercriminals, but the opposite is true. Hackers often see SMEs as easy targets due to weaker security systems.
How to Address It:
•Use strong passwords and enable two-factor authentication.
•Regularly back up your data and use antivirus software.
•Train your team to recognise phishing scams and other threats.
2. Dependency on Key Individuals
Relying too heavily on one or two key people — whether it’s a founder, manager, or top-performing employee — can create vulnerabilities if they leave unexpectedly.
How to Address It:
•Document critical processes so others can step in if needed.
•Cross-train employees to ensure knowledge is shared across the team.
•Consider succession planning to prepare for potential departures.
3. Compliance and Legal Risks
SMEs often overlook changing regulations, from employment laws to GDPR requirements, which can lead to costly fines or legal trouble.
How to Address It:
•Stay informed about relevant laws and regulations.
•Use legal or compliance software to keep records up to date.
•Seek advice from a consultant or solicitor to ensure compliance.
4. Supply Chain Disruptions
Many SMEs rely heavily on a few suppliers. If one of them experiences delays or issues, it can disrupt your entire operation.
How to Address It:
•Diversify your supplier base to reduce dependency on a single source.
•Build buffer stock for critical supplies.
•Monitor supplier performance regularly and establish backup options.
5. Reputation Damage
Negative reviews, poor customer service, or social media mishaps can harm your brand and cost you customers.
How to Address It:
•Monitor customer feedback and address complaints promptly.
•Maintain an active, positive presence on social media.
•Train employees on delivering excellent customer service consistently.
Final Thoughts
By proactively addressing these often-overlooked risks, SMEs can safeguard their operations and ensure long-term success. Don’t wait for problems to arise — take steps now to protect your business.
Need help identifying and managing risks?
At Your Trusted Advisor, we specialise in helping SMEs minimise risks and build resilient businesses. Let’s chat about how we can help you.
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