In this pandemic, people’s jobs and livelihood became uncertain. Various industries took a big hit from the quarantines implemented by the government and no one knows what’s going to happen next. This is the best time for business owners to start thinking about damage control to mitigate further losses of current and future assets.
Typically, the best choice is to hire a consultant to know the most optimal course of action. However, that could only further increase expenses which is unacceptable for small businesses that aren’t earning during this pandemic. If you’re a small business then you should follow these four ways to safeguard your assets.
Get Insurance
This might be the most obvious way to protect your assets but you’re not just getting it for probable incidents in the future. You’re getting insurance so that a professional can take look at your business. They can give you proper feedback on what you can do and which insurance fits for you. You can also ask them about your current position and what you can do to save the most assets now.
If you can afford it, it’s always good to get yourself and your family umbrella insurance. Umbrella insurance is an extra safety measure you put on top of your other policies. It has higher coverage than the policies you already have, so it serves as the best safety net when an incident happens. The best part of umbrella insurance is that it’s usually low-cost. But considering that it requires you to get a previous insurance policy, you are still paying a bit more when compared to a singular insurance cost.
Homestead Exemption
A homestead exemption is a very important legal provision that every homeowner and business owner should have. In simple terms, homestead exemption grants you a shield during dire events like the death of a loved one or declaring bankruptcy. It helps you protect your first home and it also gives you shelter during times of financial crisis.
This legal provision varies by state and the structure on how you get your benefit differs. Also, keep in mind that extensions such as carports, gardens, and patios might also affect your home’s assessed value. This makes a difference when it comes to which benefit you are going to get. Regardless, you should be prioritizing this legal provision among the rest because it can literally save you and your home.
Get Rid of Useless Assets
Getting rid of useless assets is the best way you can save your other assets. There are some assets that depreciate throughout the years and some assets you won’t be using during this pandemic. It’s better to sell or get rid of them before they become a liability.
Wasting assets such as unused vehicles and machinery depreciate overtime. The more you don’t have a need for them, the more funds you are wasting on them. Selling them or getting rid of them early on can help you prevent losing more assets in the future. An accountant can help you focus on which asset is wasting and which is not. They can even set a depreciation schedule for you so that you would know when an asset is spending more of your funds than what you are getting from it.
Stop taking unnecessary risks
It is the rule of thumb for every business owner to do their due diligence before signing a contract with a probable business partner, contractor, or when closing a deal. You shouldn’t jeopardize the assets you have right now because of a hasty expansion, not when the pandemic is still around.
Instead, protect your investments, track your assets, and prepare for the worse. Take calculated risks, something that you can handle if it fails, and always remember, if it’s too good to be true, then most likely it is.
This year’s pandemic has taught people how to shore up their assets and prepare for the worse. As a business owner, you should start taking inventory of what you have and what you are willing to lose. You should also know how much you are willing to spend on insurance and how much you are going to get from your policies. If you can do all these things then you are ahead of the curve and you could save all the assets you need to build your business again from the ground up.
