How to weatherproof your small business

Like sailboats zipping around ocean freighters, small businesses can be fast and agile in ways that larger organizations can’t manage. In a sudden squall, however, that lean structure can put the business in peril.

Small businesses are particularly sensitive to changing market conditions, such as a slowing (or rising) economy. And they can be disrupted by personnel or culture changes that a large organization would absorb. Here are some ways to protect your small business from shifts in the weather.

Flash flood

While a strong economy lifts all boats, small businesses are likely to feel the effects first. That’s great, providing you have the capacity to handle high demand.

Weatherproofing: Analyze sales trends for the past five years to spot trends that can help you avoid surprises. Establish strong relationships with suppliers and additional contract staff that you can count on at peak times. With the gig economy booming, you can find just about any service you need on demand, but you don’t want to go through a trial and error period with eager customers lining up at your door.


Every business needs a safety net of cash reserves to survive a downturn.

Weatherproofing: “Small business owners leave themselves open to disaster if they put too much of their profits back into the business,” says Lisa Raye Hund, Business Exit and Financial Professional at Consolidated Planning, Inc. in Charlotte, North Carolina. “Set aside a percentage to grow your wealth and protect your personal financial future through insurance, savings and investments.” To create a safety net for the business, tally up your monthly obligations —  employee wages, taxes and overhead — and stash enough cash to weather six months of negative cash flow.

Lightning strike

The death of a valued employee can hit a small business hard, emotionally and financially. In extreme cases, it can even sink the business.

Weatherproofing: A continuity plan is essential for a small business, yet many owners procrastinate in creating one (see dense fog below). Key employee insurance is also a good idea. It will help insulate your company with coverage that gets paid out to the business in the event of such a loss.

Dense fog

Managing day-to-day can be all-consuming. But, if you consistently focus only on what’s in your headlights, you may miss opportunities and pitfalls down the road.

Weatherproofing: “Gaining perspective is critical for small business owners,” says Lisa. “Many become so immersed ‘in’ the business, they fail to manage it.” She advises taking the time to develop long-term strategies to nurture growth. Here are four ways to start. In one study, companies that took a long view outperformed short-termers in revenue generation (by 47 percent) and earnings growth (by 36 percent).1

Black ice

A hidden hazard for freelancers, like consultants and writers, is the risk of being sued over the quality of your work.

Weatherproofing: Professional liability insurance is wise for solo providers because it can help pay legal bills if there’s a lawsuit over your services. Not to be confused with general liability insurance, which protects your business if someone actually falls on black ice on your sidewalk.


Like the Tasmanian Devil, a toxic employee can wreak havoc in the fragile ecosystem of a small business.

Weatherproofing: “Not having the right people in the right places is one of the greatest risks to the longevity of a small business,” says Lisa. Hire for capabilities and for cultural fit. Include several colleagues in the interview process and observe the prospect in casual settings, so you get a 360-degree view. Check and re-check references — and trust your gut if something seems “off.”

Last, Lisa advises small business owners not to get overwhelmed by the scope of preventive measures needed. “Take the time to implement pieces over a few years versus looking for a quick fix,” she says. “The biggest danger is to take no action at all.”


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Lisa Raye Hund, ChFC®, CExP, MBA is a Registered Representative and Financial Advisor of Park Avenue Securities LLC (PAS). OSJ:4201 CONGRESS ST SUITE 295, CHARLOTTE, NC 28209, ph# 704-552-8507 . Securities products and advisory services offered through PAS, member FINRA, SIPC. Financial Representative of The Guardian Life Insurance Company of America® (Guardian), New York, NY. PAS is an indirect, wholly-owned subsidiary of Guardian. Consolidated Planning, Inc. is not an affiliate or subsidiary of PAS or Guardian. Guardian, its subsidiaries, agents, and employees do not provide tax, legal, or accounting advice. Consult your tax, legal, or accounting professional regarding your individual situation. Links to external sites are provided for your convenience in locating related information and services. Guardian, its subsidiaries, agents, and employees expressly disclaim any responsibility for and do not maintain, control, recommend, or endorse third-party sites, organizations, products, or services, and make no representation as to the completeness, suitability, or quality thereof. SCL_2017-11-27T14:46:53.214 Exp 6/18