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The Potential Risks Faced by Online Businesses

December 21, 2011 · 0 comments

in Internet Marketing

There are a lot of benefits associated with starting an online business, like low startup costs and limited overhead, the ability to reach a vast consumer base, and almost unlimited opportunities to grow your brand and increase your web presence.

But it’s not all wine and roses; there are also a number of risks associated with operating online.  Here are just a few that you should know about so that you can protect yourself and your business.

1)Legal prosecution

If you engage in any “gray hat” practices (in other words, entering into legal gray areas) in the operation of your business, you risk raising the ire of whomever you happen to be infringing upon.  For example, you don’t want to make a habit out of “borrowing” from others on the web, whether it’s code, content, or keywords.

This could be construed as either plagiarism or piracy, and both have the potential to result in legal action against you.  In order to protect yourself you need to make sure to stick to white hat practices and ensure that all of your employees and any vendors you hire to do work for you are on the same page.

2)Patent, trademark, or copyright infringement

If you can swipe material from other websites, there’s no reason to assume they can’t (or won’t) do the same to you.

So it behooves you to trademark your brand and its associated images, logos, slogans, and so on, copyright written materials of consequence, and patent any new products or processes you create in the course of your business operations.

That way you can sue if anyone steals and profits from your intellectual property.

3)SEO setbacks

If you fail to properly apprise yourself of the guidelines surrounding search engine optimization (Google alone has more than 30 pages of guidelines that must be adhered to) you could find yourself booted from search engines for infractions (or even for perceived violations).

This will set you back to square one when it comes to increasing your web presence and it could take you months to recover.  That spells time and money that most small businesses simply don’t have.  So protect yourself by knowing the ins and outs of SEO guidelines and following them to the letter.

4)Liability

If you choose to start a business without incorporating and someone decides to come after you (for whatever reason – faulty products or services, for example), your personal assets could be at stake.  So you should definitely protect yourself by incorporating, even though your business is small.

An LLC (limited liability corporation) is a good way to protect yourself personally because it means that your business can only lose what it has (money you’ve put in or earned).  However, you should also protect your business with a legal disclaimer or “terms and conditions” that must be agreed to by users.

5)Hackers

Loss control management is one area that troubles many small business owners, simply because most can’t justify the cost of supporting online security services.

Sure they’ll go for the basics like antivirus and antispyware software, and they may even spring for a decent firewall.  But when it comes to securing monitoring and encryption services, for example, they may not see the need.

However, consider what might happen if sensitive information (about your business, or worse, your clients) was stolen and used for nefarious purposes (identity theft, for starters).  You stand to lose not only income, but also the credibility that backs your brand, and the latter can be much more difficult to recover.

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Evan Fischer is a freelance writer and part-time student at California Lutheran University in Thousand Oaks, California.

Evan has written 1 awesome articles for us at Opportunities Planet

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