Biggest Threats to Your Small Business’s Bottom Line

Biggest Threats to Your Small Business’s Bottom Line

Protect your business; learn about these risks to your business’s bottom line.

As a business owner, you understand how important your bottom line is. That’s why it’s vital to be aware of any risks that could threaten your profit margin. Be proactive and watch out for these common threats to your small business’s bottom line.

Losing a Big Client

Many businesses rely on the revenue from a few major accounts. However, if your businesses loses one if its big clients, then it might not survive. While most businesses have contingencies in place, they cannot always handle the sudden drop in income that results from the loss. To reduce this threat to your business, you need to build your client base strategically. Don’t rely solely on a few large clients, and make sure you have enough smaller accounts to offset the loss of a major client.


Overspending is another threat to your business’s bottom line. Many businesses tend to overspend in two areas: marketing and hiring. In regards to marketing, many businesses invest in costly marketing campaigns without first conducing adequate market research. As a result, they overestimate the impact that the campaign will have and end up spending too much. It’s a similar situation with hiring. Many businesses overestimate the amount of demand they will experience and they hire too many employees. In both cases, a business can mitigate the risk of overspending by conducting the necessary research.

Failing to Manage Cash Flow

Managing incoming and outgoing money is necessary for paying your bills and employees without jeopardizing your business. If you fail to manage your cash flow, then you could run out of money before all your dues are paid. To reduce this risk, make sure you pay your bills on time and set up a system that guarantees timely payment from your customers. Additionally, you should receive regular reports as most cash flow problems can be solved if discovered early.

Be vigilant about these risks as you’re monitoring your business’s bottom line. Another way to make sure your business doesn’t experience any debilitating financial setbacks is to make sure it has the necessary insurance coverage. To get insurance for your small business, contact the experts at VGW Walker Insurance in Texas. Our team is dedicated to getting you the insurance you need.