What are your business’s most valuable assets, and what are you protecting them from? For starters, your business assets could be physical, financial, or intellectual, and it’s your responsibility to protect them from risks like natural disasters, theft, or corruption. Valuable employees are business assets, too, and need protection through ways such as taking out Key Person Insurance for them. We’ll look into that in detail shortly.
Before that, it’s important to note that you cannot protect something you don’t know. This means you need to note down all crucial assets and identify the potential risks.
Once this is done, apply the following tips to ensure your organization’s assets are protected at all times. Let’s dive in!
Tip #1: Create the Right Business Entity
An entity such as an S corporation or limited liability company (LLC) protects your business assets more effectively as opposed to a sole proprietorship where assets are vulnerable to lawsuits.
An LLC formalizes your business as a separate legal entity, making you not solely reliable for the company’s debts and legal liabilities.
To keep your assets safe in an LLC, keep your personal and business assets separate so that you don’t lose your protection advantages. You may also create an Asset Protection Trust, which protects your business assets from creditors and lawsuits.
Tip #2: Use Antivirus Software
Your business data is an intangible asset that is prone to malware. An antivirus will detect, deflect and eliminate malware and protect sensitive proprietary and customer data from theft or corruption.
Worth noting is that antivirus software suites provide more comprehensive coverage than standalone virus software. Cloud-based antivirus software is even better because you can protect multiple devices from anywhere.
When choosing the best software, go for those with full-system scan options, real-time protection, and regular updates.
Tip #3: Register Your Intellectual Assets
Your intellectual property is your original ideas, inventions, designs, and other creative work that brings revenue to your organization. Registering these assets protects them from copycats and infringement.
The four types of Intellectual Property protection to start with include:
- Copyright – tangible and intangible creative works
- Trademark – Symbols, logos, designs, and catchphrases
- Utility patent – Unique product, equipment, or chemical
- Trade secret – Guarded secrets of business practices
Also, register your business, product, and domain names because they are part of your brand. As long as your intellectual assets are registered, you have a legal right to take action against infringers.
Tip #4: Insure Your Key Employees
Do you have certain employees who are valuable and would cause your business significant financial losses if they were to leave, get injured, or pass away? Protect them with Key Person Insurance because they are business assets.
For example, you can get a life insurance plan or critical illness cover for them. Your company will pay premiums to the insurer, and if anything happens to the key person, the policy will pay out, and you can use the money for recruitment costs and other expenses.
Tip #5: Let Employees Sign NDA Agreements
Information is an intangible business asset and should be protected from the public. It’s crucial that those working for you sign a Non-Disclosure Agreement (NDA) stating that they won’t leak your organization’s information.
Let’s say your organization is developing a new video game. Ask the game developers who have access to trade secrets to sign an NDA to protect your Intellectual assets (Intellectual Property).
Lawyers prepare confidentiality agreements that bind employees and keep your business secrets. The employees are liable for any leaks that may occur.
Tip #6: Using proper Contracts and Agreements
Creditors can break through your corporate veil (a form of assets protection) and attack your personal assets if you are negligent.
Luckily, you can curb these kinds of cases by implementing the following tips:
- Have proper lease agreements for your rentals and place equipment and property titles in the company’s name.
- Pick only licensed professionals when hiring contractors, maintenance specialists, or tax advisors.
- Have contractor and subcontractor agreements on each contract. Don’t rely on terms and conditions written in an email.
- Don’t use cookie-cutter contracts from the internet. Get a lawyer or business advisor to help you write it.
Start Protecting Your Organization’s Assets
To protect your organization’s valuable assets, first, write them down. They could be physical, financial, or intellectual assets. Next, identify the potential risks, such as your assets being accessible to creditors, data loss through malware, or employees disclosing your organization’s trade secrets.
Register your business as a private entity through an LLC to protect your assets from creditors. Finally, use antivirus software to protect your data from theft or corruption, and let your employees sign NDA agreements to protect your trade secrets from disclosure to the public.