Starting your business from scratch comes with various challenges.
As the business owner, you should have internal control over everything that goes in and out of your business to guarantee its safety.
5 Tips To Avoid Scams When Starting Your Own Business
Many small business owners think that they’re invisible from business crimes as scammers and cybercriminals only target large businesses with large sales and profits, but they’re entirely wrong. Small businesses are as vulnerable as bigger companies.
As you start from a smaller venture, your experiences in handling your business are still limited, which may increase your vulnerability to business-related scams and frauds.
In this article, we’re touching on some useful tips to avoid scams when starting your own business.
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1. Educate Yourself About the Business Landscape
Your business starts from you, the mastermind. Ideas, motivation, or whatever the cause of your business’s inception won’t be enough if you don’t know anything about the business industry. Your venture’s safety will start by educating yourself on how the business landscape works.
One excellent way to do this is to identify potential threats that target small businesses. Here are the most common small business scams today:
- Insurance fraud
- False invoices
- Phishing schemes
- Wire transfer fraud
- Government agency impostor scams
- Identity theft
You can learn in-depth information from reliable resources specifically curated for business owners, an online course like New Start Up Scams teaches you to protect yourself from scams while making your first sales.
2. Create A Separate Business Bank Account
Since you’re still starting small, you may think that using your personal banking information will suffice.
Opening a separate bank account for all business transactions is paramount to differentiate your inflow and outflow on your venture from your personal assets.
Furthermore, having a separate business bank account can reduce your potential loss in the event of a scam. In case of fraud, you’ll only compromise your business’s money present in the bank account and putting your personal money at risk, too.
Aside from your primary safety concern, here are other essential reasons why you should make a separate business bank account:
- Accurate and up-to-date bookkeeping
- Precise cash flow management
- Efficient tax returns
- Clear audit trail
- Overall business professionalism
3. Be Mindful of Your Online Actions
It’s always safer to assume that the online landscape is full of frauds and scams, so you must encourage yourself to be cautious all the time. When navigating online with your business account, always be mindful of what you click, visit, transfer, download, and many more.
For example, avoid clicking pop-up windows on random websites that you visit. Typically, these scams will pose as an antivirus pop-up that’ll warn you that you need to clean your computer to remove the virus.
Also, double-check the websites that you visit. Safe and legitimate websites should have an SSL-certified address containing an HTTPS in their address instead of an HTTP.
If you’re planning to launch a website soon, your website should also have an SSL certification.
4. Don’t Share Sensitive Information
Scammers will try to get your sensitive information first as this will help them accomplish their task. Typically, they’ll pretend to be someone that you trust such as a relative, friend, and even your own bank or a government agency.
Regardless of who approaches you, never give out sensitive information such as your personal details, Social Security number, financial information, and the like.
A common example of this is a scam known as pharming, where an individual or company sends you an email attached with a hyperlink and a set of instructions to be followed.
As you click on this hyperlink, they may require you to add your bank information, which is a big no-no. Even if the sender appears to be your banking or credit card company, they must not ask for this sensitive information.
5. Hire the Right Employees and Educate Them
At the early onsets of your business, you may be a one-man business. Eventually, you’ll have to hire new people into your team as your business expands.
Since your employees will become an extension of your business, make sure to hire the right one and educate them about the business’s safety and their own.
Before hiring anyone, perform a background check on them, see if they’re fit for the role, and have a clean criminal record. Some business owners may neglect screening candidates thoroughly, but it’ll be too late until they discover that they’re actually criminals.
Moreover, after finding the right people, spread awareness to your employees regarding online security and safety with the help of awareness training.
Understanding the importance of safety is the first step to achieving it. Many entrepreneurs may believe that success won’t happen without failing a few times.
But keep in mind that it’s still your responsibility to mitigate possible risks as much as you can, including avoiding scams and keeping your business safe.
Using the five tips discussed in this article, we’re wishing you a safe, fraud-free business journey!
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