Activity 1 Answer
There are various disasters that affect the operation of small businesses in the world today. Firstly, property loss is an example of a manmade threat that affects business operations. It involves loss through theft by employees. It occurs when the business lacks enough security systems to monitor its assets. It is a big threat that may lead to the closure of the business in the long run. Proper inventory management is vital in assisting small businesses to overcome loss property threat. The business also needs to have adequate coverage that helps in determining the loss effects of the business (Dellacamera, n.p).
Secondly, business interruptions by natural disasters such as floods, earthquakes and storms are another major risk that small businesses suffer. Natural disasters are unpredictable in many cases and when they occur they may force small business owners to relocate after losing the property. In fact, they may affect the future existence of the business. Insurance of a business against natural disasters is very vital for any small business that needs to continue operating in the future. This is a very good move in ensuring that any business can take to cover for the loss of property when unpredictable natural disasters hit their businesses. This makes an assurance to small businesses of their future business operations (Dellacamera, n.p).
Furthermore, an electronic data breach is another emerging disaster that faces small business operators in today’s world. Technology development has led to the emergence of hackers who steal business data by corrupting business systems. The hackers use the data information to harm the business by stealing either money or confidential information that dictates the operation of the company. Also, the data is under the threat of viruses, malware, and worms that affect data operations. Small businesses need to protect their data from breaches. There are several ways through which the operators can ensure data security. For instance, there is a need to create strong passwords for their information systems to enhance data protection. Other ways include the use of antivirus software to prevent data damage by viruses, worms, and malware.
Activity 2 Answer
Liquidation strategy
Liquidation is a strategy used by many small businesses to exit their operations. It involves the selling of the business assets or part of them and then closing the business for good. It is commonly when the business is unable to meet its obligations and is operating at a loss.
Family Succession Strategy
This is a business strategy adopted by the owners of businesses which involves the transfer of the of the business operations to family members. A business owner may take this step when he or she lacks the power to push the business in the future. The arrangement may see both the owner and the family members who control the business enjoy its future progress.
Selling the business
Selling the business is a strategy taken by a business owner to sell its business to potential buyers to overcome the challenges facing him or her. It is an arrangement that sees the buyer providing funds as per the value of the business under which he or she becomes the rightful owner after the payment of the agree amount of money (Cahoone et al., 2002).
Bankruptcy
Bankruptcy is a legal strategy that declares a business owner unable to meet the debts of his or her business. In most scenarios, the strategy is given by the court after an initiation by the debtor. It declares the owner to lack the capacity to conduct any business transaction.
Taking a company public
Taking a company public is a strategy that a private business owner issues the business to become a public owned entity. It is a good way to which the owner can raise capital for the expansion of the business in the future.
After working in a business for twenty years of success and time for change comes, it is good to take the company public. In so doing, one benefits a lot from the future business operations. For instance, it becomes easy to gain enough capital through public issuing thus able to expand the business. Besides, it helps business to continue operating to foreseeable future (cahoone et al., 2002).
References
Cahoone, D. K., Gibbs, L. W., & Freeman, D. L. (2002). Strictly business: Planning strategies for privately owned businesses: Practical answers from America's foremost business planning authorities. Denver: QP.
Dellacamera, A. (n.d). 5 Common Threats Small Businesses Face. Acadia Insurance. Retrieved from http://acadiainsurance.com/blog/workers-compensation/5-common-threats-small- businesses-face/
