What Financial Risks Should Small Business Owners Be Aware Of? (And How to Stay Ahead of Them)

Quirk & Co Allan
Jul 3
2 min read

Every small business carries some level of financial risk.

Risk is part of running a business, but here’s the good news: most risks can be planned for, avoided, or softened with the right visibility over your numbers.

That’s where a financial strategy grounded in real data (not assumptions) comes in.

First: What does financial risk actually look like?

It's not just major disasters or lawsuits. Financial risk in small businesses shows up in everyday decisions like:

Taking on new expenses without checking your cash flow (cash flow = what money is coming in vs going out, and when)

Pricing based on competitors, not your profit margins (profit margin = how much you actually keep from each sale)

Expanding too quickly without forecasting your operational costs (the day-to-day expenses of running your business, like wages, rent, and software)

Relying on a single client, product, or supplier
Falling behind on super, tax or ATO obligations

These things often build slowly, but they can create serious financial strain if left unchecked.

So, how do you stay ahead of it?

Here’s a practical 3-step approach we use with our clients:

Step 1: Spot the risk

Before you can fix it, you need to know it’s there. Some of the most common risks we see include:

Revenue drops when a major client leaves or demand changes
Cash flow crunches from seasonal slow periods or late payments
Rising expenses that creep in unnoticed
Compliance risk from missing tax obligations or deadlines

Often, clients come to us thinking everything is tracking okay, until we run the numbers and find gaps they didn’t see.

Step 2: Understand the impact

Not all risks carry the same weight. We help clients ask:

What would happen if this risk played out?
Could you still pay staff? Cover your tax? Handle slow sales?
How often does this risk come up, and are we reacting or preparing?

When your numbers are accurate and up to date, you can make these calls with confidence.

Step 3: Put guardrails in place

Risk can’t always be eliminated, but it can be managed. That might look like:

Building up a cash reserve (money set aside to cover unexpected costs or income dips)
Reviewing pricing and expenses quarterly
Forecasting for slower periods
Spreading your income sources
Keeping regular tabs on your obligations

We help business owners create simple, usable systems rather than long reports that collect dust.

Real risk management starts with real numbers.

Guesswork is where most risk begins. At VBA, we use Strategic Business Advisory + Bookkeeping to give you clarity, consistency, and confidence in your decisions.

That means:

Your records are always accurate
Your financial blind spots get picked up early
And you're supported by a team that actually helps you plan ahead, not just catch up

If your accountant only shows up at tax time, it’s time for more.

Start by learning the VBA way here.