Some of the risks that small businesses face are overhead cost, cost of equipment, expected sales volume, salary cost, taxes, price charged for service or product, competitor’s actions, the local economy, changing trends, risk that the product may become obsolete. Other risks include damages from fire, water, natural calamities, intentionally inflicted damages, loss of data and property due to theft, machine breakdown forcing work to come to a standstill, cash flow problems that may force a business to close.

Every sector has its set of risks and the responsibility of the owner is to identify study and counter these risk factors. Loss of records due to fire or other such risks will make it impossible to determine the financial transaction details such as who has to pay or who has to be paid, making it impossible to bill or collect from customers.

Failure to obtain all necessary licenses and permits may be a risk that could close the business. Employees that may embezzle, liability losses, public liability, liability to employees, business could close temporarily due to ill health of its owner or due to his death, when a key employee who was invaluable is unable to continue etc. are some other risks that may hinder small business from functioning normally. When cash flow forecasts are inaccurate, the business runs the risk of taking bad decisions that could have been prevented such as applying for a large amount of loan that the business cannot really afford. Selecting unqualified personnel as key employees, disgruntled employees can be a risk too, as they can take a business to the cleaners suing the company no matter if they are right or wrong etc. are other types of risks for small businesses.

When you consider insuring your business, your agent would have identified all insurable risks and would have advised you to take certain precautions to counter/prevent them. However, the types of risks for small businesses vary according to the nature of the business, hence the owner should himself, also make an effort to identify the risks and effect good risk management techniques.
Several firms offer their service as well as products that help in running a business easily.