Risk avoidance plan
Risk avoidance is important in that it helped deals with the various risks associated with the operations of the business and ensure that the company is not adversely affected by the potential risks. It is critical for the company to find out most if not all risks and try to eliminate them to ensure smooth operation of the company and to prevent any danger posed to the business by the risk (Pritchard, 2014). Therefore coming up with a risk avoidance plan for the company is important and most includes many activities that aim to enlighten the individuals of an organization to ensure that they are not caught unawares by the potential threats. Some of the ways to deal with the risks can be done through the formulation of procedures and policies, education and training and implementations of different technologies. The paper is, therefore, going to look at various methods that can be used to reduce or eliminate potential risks for the benefit of the company. Therefore, the company in noting the different risks will ensure that tit deals with mitigation measures to ensure that it is prepared come what may.
Avoiding employee lawsuits
Employee lawsuits are a tasking process to the business since the business has to follow up in courts and in the end, may use a lot of money in compensating the employees. Mass layoffs have been the biggest problem in bringing up lawsuits against employers by employees. Therefore, employees can sue employers on discriminatory charges and get compensated as a result. More than half of the lawsuits filed in courts in the various states are usually successful. Therefore, businesses initiate strategies that will help them minimize the lawsuits by adopting policies that are fair to their employees (Olson & Wu, 2013). Some of the strategies that the company will use are to establish guidelines associated hiring, promotion and sacking and write down business conditions related to layoffs since they may occur in difficult situations. In addition, the company will focus on setting up a layoff plan and how such employees will be counseled to ensure they do not make lawsuits in future but understand that hard economic times have forced the business to lay them off.
Minimizing business liability risks
Incorporation of companies helps to minimize business liability. However, gives some protection against liability there is still some steps that the company should follow to reduce further business liability risks. Therefore, businesses cannot focus on incorporation as their only protection from their personal assets and other factors connected with the ownership of the company. Therefore, the company will adopt various practices that include among others maintain a better standing. The company will thus be maintained to ensure that they are stable systems and practices in place that will help the business in times of trouble. As such, the business will aim to keep clear and concise records of personnel, licensing, company documents and efficient accounting practices. Besides, the company will acquire liability insurance for its workforce, tighten company policies, review contracts and document most of the company’s operations to ensure that any risk that may occur and cause labiality is averted as soon as possible. Therefore, in using the different strategies the business aims at lessening any risk that might occur while the business is operating.
Avoiding lawsuits on business torts
Torts in business can be brought about by negligence on the part of the company, and the affected parties are mostly employees and customers. They are mainly civil suits that do not result in imprisonment but settlements. For torts, the business can end up compensating the affected parties monetarily. Low quality and defective goods sold to customers may lead to torts. Employees, on the other hand, can sue the business for indiscriminately firing them off or unfairly treating them. Therefore, the company should anticipate torts and address them early to prevent any torts that may arise. The company will, therefore, seek the assistance of legal practitioners in finding out potential areas for torts into eh business and rectify immediately. Furthermore, the company will aim to put in place measures that will help the company deal with its customers’ complaints to prevent any lawsuits from arising (Duckert, 2011). Therefore, employees will be trained to handle the customers professionally and thus deal with any problem involving defective goods swiftly. As such, the company will seek to ensure that any negligent practices on its behalf are minimized or totally eliminated to prevent torts that may arise from employees and customers together with other parties associated with the business.
Company finance risks
Small and big companies need finances to run their operations smoothly. Some business may have the funds at hand, but others may seek funds from other sources. Most of the funds sought from external sources usually help the company to expand or offsets financial problems facing the business. Various risks affect business in obtaining financing options. They include the loss of assets in case of defaulting on loans, spoiled relations especially with close friends or family members (Anderson, 2014). Furthermore, the company may relinquish control to others especially if financing is from equity and the danger of accruing too much debt is imminent which can strain the business operations since more money is financing the loan monthly. Therefore, the business will analyze the various financing options and ensure that it does not choose an option that will hinder its growth or strain its business operations. Plans and strategies are going to be used mainly in projecting the various finances that will be obtained externally and whether the company should obtain any other finance and from what sources. In so doing the business will anticipate any adverse effects that will be caused by borrowing a certain amount of money from some sources of finance.
Efficient business contracts
Business usually engages in contracts in their daily activities. The contracts may involve more than two parties. The contracts made should be reviewed carefully to ensure that the business clearly understands the various agreements it is making with other parties. The contracts are legally binding. Therefore, the company will seek to make contracts that are efficient and that will help it in meeting its objectives. Therefore, business should not make verbal or word or mouth contracts but concentrating on making contracts in writing to ensure that all parties follow the contract. Therefore, the parties to the contract will have to detail their expected obligations that they are to fulfill what they require of the other parties respectively, clearly define terms involving rental, sale or lease, and lastly outline the risks and responsibilities required of each party. The company will thus formulate the various details concerning its requirements about parties in the contract. Any contract with an individual business will have to be reviewed broadly and thus ensure that the contents are understood before the company signs any contract. The business in signing any contract will ensure that it has clearly understood the terms the and the various requirements of the other party and ensure that its demands are stated explicitly to avoid cases of liability against the company.