How to Avoid Risk As a Business Owner

By Troy Noor, CFP®, CFA®

Running a business can feel a bit like walking a tightrope—thrilling and full of potential, but never without risk. Whether you own a manufacturing firm, a professional services practice, or a high-growth tech company, unforeseen challenges can derail even the most seasoned entrepreneur. From sudden market shifts to cyberattacks, risks can threaten both your livelihood and your personal finances.

After nearly three decades advising business owners, I’ve seen how proactive planning turns sleepless nights into confident steps forward. The good news is you don’t have to face these challenges alone, and you don’t have to accept unnecessary risk. Focusing on four essential strategies can help you build a more resilient business and preserve the wealth you’ve worked so hard to create.

1. Identify and Assess Your Risks

Effective risk management starts with awareness. Too often, owners are so focused on growth and daily operations that they overlook the vulnerabilities inside their own company. Begin with a broad inventory of potential threats, which typically fall into five key categories:

Financial: Cash-flow disruptions, economic downturns, or surprise expenses that strain liquidity
Operational: Supply-chain delays, equipment failures, or IT outages that halt production or service
Legal and Regulatory: Lawsuits, contract disputes, or shifting compliance requirements
Market: Changes in customer demand, new competitors, or technologies that make your product obsolete
Reputational: Negative online reviews, social media missteps, or public relations crises

Once you’ve listed these possibilities, rank them by probability and potential impact. This prioritization helps you allocate resources where they matter most, so you’re addressing the risks that could truly threaten your company’s survival.

2. Safeguard With the Right Insurance Coverage

Insurance provides the safety net every entrepreneur needs. A well-designed policy can shield both your company and your personal finances from sudden loss. While every business is different, several types of coverage are worth considering:

General liability insurance to protect against claims of bodily injury or property damage
Property insurance to cover buildings, equipment, and inventory
Professional liability (E&O) insurance for service providers who could face claims of negligence
Cyber liability insurance to help recover from data breaches or ransomware attacks
Key person insurance to offset the financial hit if a critical owner or employee unexpectedly leaves or passes away

The key is customization. A one-size-fits-all policy may leave gaps that only become clear after a loss. Work with an advisor who understands your industry to tailor coverage that truly addresses your needs.

3. Implement Preventative Strategies

Insurance transfers risk, but prevention reduces it. Building a culture of preparedness can dramatically lower the odds of a crisis. Consider:

Data security upgrades: Encrypt sensitive information, use multifactor authentication, and back up critical files.
Vendor diversification: Avoid relying on a single supplier for crucial materials or services.
Contingency planning: Create playbooks for natural disasters, market disruptions, or the sudden departure of a key employee.

These steps don’t just guard against worst-case scenarios; they also improve day-to-day efficiency and can even enhance your company’s reputation with customers and lenders.

4. Review and Update Your Plan Regularly

Business risks evolve. New competitors emerge, regulations change, and economic cycles shift. A risk-management plan written today may be outdated a year from now. Schedule an annual review, and revisit the plan after major events such as a product launch, significant hire, acquisition, or market expansion. Regular updates keep your protection current and help you seize opportunities with confidence.

Plan With Purpose, Live With Peace

At Boulevard Wealth Management, we believe the best business strategy integrates growth and protection. Our team-based, fiduciary approach allows us to evaluate your entire financial picture (business and personal) so you can focus on what matters most: growing the company you’ve worked so hard to build.

If you’re ready to create or refine a risk-management plan tailored to your goals, let’s talk. Call (763) 244-1191 or email troy@blvdwealth.com to schedule a conversation.

About Troy

Troy Noor, CFP®, CFA® is the Executive Director and Director of Portfolio Management at Boulevard Wealth Management, a financial services firm in Twin Cities, Minnesota, dedicated to addressing client goals through a team-based, fiduciary approach. With over 28 years of experience in the financial industry, Troy specializes in helping executives with equity compensation and business owners maximize their wealth and minimize taxes. His work centers on creating customized investment strategies, optimizing portfolio risk, and designing financial plans that empower clients to pursue financial independence. Guided by his passion for stewardship, Troy strives to help clients align their financial resources with their long-term goals while fostering positive impacts on families and communities for generations. His approach combines technical proficiency—leveraging tools like tax harvesting and mean-variance optimization—with a faith-driven commitment to acting in his clients’ best interests.

Troy earned his Bachelor of Applied Science in International Business and holds the distinguished CERTIFIED FINANCIAL PLANNER® and Chartered Financial Analyst® designations. Beyond his professional roles, he has served as a Board Member for the Eden Prairie Chamber of Commerce, currently serves on the board of Ambassadors for Business, and leads a men’s Bible study group, reflecting his dedication to community and faith. Outside the office, Troy enjoys traveling, fishing, and gardening. He lives by the principle of stewardship, aspiring to hear, “Well done, my good and faithful servant” at the end of his journey. To learn more about Troy, connect with him on LinkedIn.