Checks and Balances. How to Mitigate Risk.
Every business, small or large, faces multiple risks and challenges that can hurt the business. As the business owner, you should identify potential risks and challenges, assess them, and work to reduce or eliminate them. It’s important to look at your business and recognize where you are weakest, or where there is room to make improvements. Mitigating business risks and challenges really comes down to the systems you have in place. If your business has standard operating procedures (SOPs), you are already doing more than most business owners are to mitigate risk. According to an article by the U.S. Chamber of Commerce, the top risks for small businesses in 2025 included inflation and tariffs, hiring gaps, and regulation and policy changes. Let’s consider each of these risks and challenges, and what you can do as the business owner to mitigate them.
Inflation and tariffs are highly dependent on the economy, and are out of the control of a business owner. However, you can always prepare your business to take this hit by responsibly managing your finances. When your business starts to grow, it can be very exciting and inspiring, perhaps prompting you to make some business purchase expenses that are out of your budget. If you are not responsibly managing your finances by doing your own bookkeeping or outsourcing it, you will never have an accurate idea of where your business stands financially, and you will not be able to budget for expenses or forecast future revenue growth. By recording your business’s financial data, you can analyze your finances, assess the economy, and make informed decisions about your current budget and your pricing for goods or services.
Hiring gaps are also highly dependent on the economy, and if your business cannot afford to compete with other businesses for employees, your business may suffer. The most important way to prevent any hiring gaps is again to responsibly manage your business’s finances. When you know how much money your business makes, what your expenses are, and strategies you can implement to increase revenue, you can consider hiring employees and offer competitive wages and benefits.
Lastly, regulation and policy changes occur as our society continues to develop. Small businesses are heavily regulated in the United States, and this is a risk in and of itself. According to another article by the U.S. Chamber of Commerce, data from 2024 showed that small businesses spent the most time on tax and recordkeeping compliance. As a small business, when you are forced to spend a large chunk of your time on ensuring you are compliant with tax and recordkeeping laws, you end up with less time spent on growing your business. This is why it’s important to implement a solid bookkeeping system, one that is compliant with the law and can make tax season easier for your business.
As you can see, the largest risks and challenges small businesses will face can all be tied back to finances. Whether you choose to do your own bookkeeping or you decide to outsource it, bookkeeping is essential to the health of your business, and can make or break it.
US Chamber of Commerce Referenced Websites:
https://www.uschamber.com/co/start/strategy/small-business-challenges-and-opportunities
https://www.uschamber.com/small-business/a-majority-of-small-businesses-say-regulations-are-hindering-growth