Business Owners Hate Spending Money on What they Can't See

I had a conversation today about trying to get business owners to recognize that they need to comply with certain laws. While the choir understands that not doing so puts businesses at risk, the choir still can't get why the business and the owner is willing to take their chances despite law.

I stated that business owners and small businesses are reluctant to pay for something that doesn't have an immediate ROI emotionally or economically. For example, if a supplement company were given an opportunity to distribute their product internationally for the cost of liability insurance, they are motivated to make the investment provided the opportunity far exceeds the cost. But the same company may not want to purchase liability if it involved something more remote like PCI compliance when they don't see the value. Especially in unfunded mandates. Every company is subject to one or more of five major privacy mandates and all of them are unfunded. Most companies don't even know they are required.

In addition, they are unwilling to part with funds for something that has a million and one chance of ever happening in their eyes. "We're too small for anyone to care" is the usual mantra. However, when it comes to identity theft, it only takes one to put a small business out of business. The likelihood is not "if" but "when" and far greater than all of the other risks that businesses must contemplate.

So how do you motivate a business or organization to comply? Fear doesn't work because most companies are immune to what feels remote them. Instead, what hits home now? Did a customer loose a wallet or have a credit card turn down? Did an employee have a credit problem due to a bad profile? Did the company computers get infected or go down for any length of time recently? Did an employee loose a laptop or blackberry? Ask who they turned to when it happen and why?

Another way is to show companies how unfunded mandates actually have hidden wealth opportunities they can acquire immediately in employee morale, growth opportunities, and economically. If you are interested email me at witsowitz@verizon.net and write in the subject "Wealth in Unfunded Mandates".

Strategy is as Strategy Does Which Do you Do?

Due to the nature of what I do in identity theft, a colleague convinced me, after 20+ years of others trying, to get my insurance license. “What did I say to convince you” she asked. "Good timing" was my answer. It involved making sure that having an insurance license made sense in furthering the strategies and goals of the company’s business model. Not simply for the sake of earning additional income. The knowledge acquired along the way helped me to better understand risk in a way I couldn’t before.

As a company that is built on growing other organizations, I state that you cannot grow what you don’t protect routinely. In today’s environment that has never been truer. There is a difference between strategizing your business model and strategizing your activities in the business. Which are you doing? Which one should you focus upon? Taking it one step further, are you sharing it with your employees?