How to Protect Your Side-Hustle Business From Fraud
With enough motivation and understanding of your target audience, your side-hustle business could go from something you started so you’d have a little extra spending money to a very healthy supplemental income. What’s even better is that there are plenty of ways to earn money part-time while doing something you’re passionate about – from baby-sitting kids or dogs, to baking, making crafts, or writing blogs.
No matter which money-making route you choose, it’s crucial to safeguard your business from fraud. Taking precautions and thinking ahead could greatly reduce the chances of going from side-hustle success to a side-hustle shutdown.
Equip Your Computers and Tablets With Anti-Virus Software and Updated Firewalls
Many fraudsters try to snatch your bank account information from the outside by hacking e-mail accounts and hoping to find the respective details there. You can hinder those practices by making sure all your computers and tablets have active anti-virus software and current firewall protection.
Furthermore, if you have employees, train them on how to recognize potentially fraudulent e-mails that could be attempts to get sensitive information. As a rule, banks never ask for account details via e-mail. Neither do most websites or businesses.
Limit Administrative Access
If you rely on people to handle money received from your side-hustle business, be very specific about which individuals are allowed to do those tasks. Ideally, conduct background checks on employees, and keep the level of access as limited as possible. That way, if you do suspect a case of internal fraud, it should be relatively easy to pinpoint the person or people responsible. At the very least, it will likely be pretty straightforward to determine what went wrong, and when.
Be Mindful When Storing and Disposing of Paper Bills
It’s arguably safer, not to mention more convenient, to pay as many bills as possible through a secure online platform. However, if you still receive bills in the mail, store those in a safe place, such as a locked cabinet.
Also, rather than just tossing those bills into the trash once they’re paid, invest in a paper shredder so there’s no chance your account details or other personal information could be seen by prying eyes.
Keep Public Areas Well Maintained
If your side-hustle business has areas that are accessible to the public such as foyers, parking lots or even your driveway and front steps, keep those spaces tidy and free of things that could cause a person to slip and fall. If you don’t, the lack of attention could make you liable for fraud related to personal injury, brought by either a customer or employee.
In regards to the latter, statistics say one in 10 small business owners are concerned their employees will fake ailments to receive worker’s compensation. Besides doing what you can to keep public areas as safe as possible, it may also be a worthwhile investment to install security cameras on the premises.
Get a Lawyer on Your Side
Even when you’re still in the stage of pondering setting up a business, it’s very smart to hire a lawyer you can depend on for information and insight as you run your venture. When speaking to a law professional, you may be surprised to learn about the various types of financial fraud that exist — even those types involving fraud against the government.
Although you may not deal directly with the government within the scope of your business, there are other types fraud you may not have considered, such as those relating to falsified invoices or exaggerated business expenses. Talking to a legal representative who is familiar with different kinds of small business fraud may be able to help you evaluate risks and learn how to minimize them.
Hire an Auditor
In addition to adding a legal professional to your side-hustle business team, it’s a good idea to consider working with an auditing firm, too. An auditor can spot inconsistencies in your processes or other factors that may leave you liable to fraud, plus they can help you protect your business assets.
After getting an assessment from an auditor, you may find you’ve virtually eliminated things that were potential fraud risks and have made your current processes much more efficient — your side-hustle business will be even more productive and profitable.
Research Your Resources
If you have a credit card specifically used for business purposes, find out whether the issuer offers fraud protection measures you can request. Furthermore, check to see if business insurance plans within your budget offer coverage against fraud cases, or if you can add onto the insurance you already have by purchasing something that compensates you after you’ve been victimized by fraud.
Whether you get fraud protection for a business charge card, business insurance with fraud protection or both, consider those things good investments. Initially, you may not be crazy about the idea of paying for something you might never have to use, especially if your side-hustle business is still relatively small. However, when you realize a fraud case could be the thing that converts your efforts from profitable to pointless, it should make sense why preventative measures against fraud are very wise to take — even if they cut into your earnings.
Don’t Ignore Suspicious Circumstances
Getting informed about types of small business fraud and using some of the suggestions above are worthwhile ways to spend time. However, it’s also important to trust your gut instinct. If something seems amiss, thoroughly investigate it right away. Even if your suspicions turn out to be unfounded, it’s still crucial to act quickly to minimize damages of potential fraud cases.
Hopefully you now feel much more prepared to take action against fraudsters who may threaten your side-hustle business. Consider revisiting your fraud protection plan on an annual basis (at least), and stay abreast of new types of fraud so your methods remain relevant and current.
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