Majority of Small Businesses Lack Disaster Recovery Plan, Unable to Recover

small-businesses-disaster

Have you ever considered what would happen to your business in the event of, for example, a fire that destroyed the business premises? Or a flood or tornado that caused irreparable damage to your assets? Disasters such as these are not particularly pleasant things to think about, but effective planning against such events could mean the difference between a natural or man-made disaster temporarily inconveniencing and permanently destroying your company.

Having an effective disaster recovery plan is important for all businesses who want to protect themselves against unforeseen occurrences, but especially so for small businesses who are particularly vulnerable in the event of a disaster. According to the Institute for Business and Home Safety, 25% of businesses that experience a major disaster never open again. Businesses with electronic data are even more at risk, with more than 90% of those unable to access their data for one week going out of business within 12 months.

98% of Business Owners Don’t Know Company Value, Issue in Purchasing Insurance

small business fire

There are millions of business owners who do not know the value of their business. A 2014 IBISWorld report notes that just 2% of business men and women in America know the exact value of their ventures. For the remaining 98% (about 200 million), generally small businesses, it seems they either do not see the need to value their business, or do not have the means to do so.

Knowing the worth of your business is absolutely important. Not only is the information useful when you put the business up for sale, it also helps you determine which insurance plan best suits the business. And talking about insurance, getting the right plan for your business is vital. With the wrong insurance plan or no insurance at all, you could incur huge losses should something bad happen.

A Change in Mindset: Approaching Small Business Startup Risks

fasttrac

Although many small business risks can be mitigated through insurance, a fair number of risks are best handled through a change in strategy or mindset. For new entrepreneurs, the passion and excitement going into a new venture can at times get in the way of making the best decisions for the business. Michele Markey, Vice President of Kauffman FastTrac, shared with us her deep insight on some of the biggest risks new entrepreneurs face, and some sound methods they can use to help mitigate those risks.

Markey is no stranger to what it’s like to be a new entrepreneur who thinks they have it all together. As a sole proprietor for her own business, Markey explains that  her efforts certainly looked like success from the outside. “But the fact of the matter is,” she explained, “I was not working smart. I was working really hard, earning a decent income. By all kind of outward signs, I was very successful but I equate it to digging a swimming pool with a shovel.”

Retail Business Insurance Cost

As a retail business owner, you face a number of risks every day when you open up shop. A customer could slip and fall in your store. An employee could get injured on the job while stocking shelves. Or, a natural disaster could force you to close temporarily, meaning lost income. It’s important that you have the proper insurance set up to protect yourself from these situations and more. But just how much is all this insurance going to cost you? Let’s take a look.

Types of Insurance a Retailer Needs

Two of the most important policies a retail business should have in place are a Business Owners Policy, or BOP, and Workers Compensation.

Professional Liability Premiums Remain Steady for Architects & Engineers

insurance architects engineers

Owners of architecture and engineering firms are open to liability whenever an engineer or an architect makes a mistake that costs a client money. Getting professional liability insurance helps to protect the firm against very costly lawsuits that derive from such mistakes. Operating with the coverage of a professional liability policy for engineers and architects will help to protect the business against negligence claims and other types of errors that result in the dissatisfaction of the client.

A lack of coverage for these situations can bankrupt a firm. Not only would your business have to pay the associated costs, but you will also receive negative publicity. Contrary to what some people say, bad press is very real and it can easily damage your business reputation beyond repair. Even if the business will recover after such a scandal, it will be harder for you to bring about new big projects, at least in the short term.

Small Business Risks for Women Entrepreneurs

astia

Risk exists for every sort of business venture and at all points in the lifecycle. Whether you’re operating a food truck or launching a small tech startup, the type of risks you encounter may increase over time, especially as your company grows.

Around 29% of private businesses in the U.S. are owned by female entrepreneurs, a number that has grown 68% since 2007. Clearly, a growing number of women are willing to take on the risk of starting a new business. But what risks await female entrepreneurs and their newly-budding startups?

According to Yuka Nagashima, President of Astia (a nonprofit striving to level the playing field for women entrepreneurs by providing access to capital and networks) and co-founder of two tech startups, women take on and manage risks just as well as men do. The real issue at hand? “The investor lens is biased,” she explains, “often in the way that demands the female entrepreneurs to change rather than fix the broken system.”  The lack of access to capital continues to be cited as one of the top reasons entrepreneurial businesses fail.

Regulation Top Small Business Concern, Insurance Addressing Others

linda-mcmahon

Every business is a risky venture. Small businesses, especially startups, are known to be particularly vulnerable to changing trends of regulation in America.

In a recent meeting with small business owners in West Virginia, U.S. Small Business Administration leader Linda McMahon said, “For every $10,000 of regulation, 3 to 6 percent of small businesses will go out of business”.

This is a big problem which many small business owners have yet to find a solution to. While regulation is a core concern, there is a number of other risks small businesses face which can be more easily mitigated through insurance coverage, such as a Business Owners Policy (BOP). What is a BOP is and how it can help to keep your small business in business?

Workers Compensation Insurance and the Gig Economy

Workers Comp

In 2014, Meghan Biro highlighted several salient points that help explain why businesses are moving more toward hiring telecommuters or allowing workers to telecommute instead of sit in the physical office space. “[H]aving remote and virtual employees is not only a way to get things done round the clock, without commuting, and with hard-to-find skill sets,” wrote Biro, “but is also a way to meet the needs of employees who don’t want to or can’t live near the mother ship.”

Since writing that article, the number of individuals choosing to telecommute has risen. What Biro labels as the “future of work” has also come under several different titles, most notably the “gig economy”. Employers are increasingly hiring workers on a part-time basis to get work done from any location. In fact, the growth of the gig economy has been noteworthy enough to receive direct attention from the Bureau of Labor Statistics, which now tracks the gig economy and its growth, labeling under “nonemployer business”.

Value of Cyber Insurance, 29% of Small Businesses did Nothing Post-Attack

cyber insurance

While cyber security threats continue to increase in number as well as severity, surveys appear to indicate that small businesses are still falling behind in cyber security readiness.

Writing in IT Business Edge, Sue Poremba notes a few Hiscox survey numbers that appear to be troubling cyber security professionals: 29% of small businesses did nothing after an attack, while 68% are reported at least one cyber attack within the past 12 months. These numbers would be less troubling if it was not for the fact that small businesses appear to be ill prepared to handle such issues before, during and after they occur.

Small Businesses Optimistic as Economic Growth, Insurance Mitigate Concerns

Small Business Insurance

An uptick in economic forecasts has increased attention on America’s small businesses. A growing number of small business owners are expressing optimism, with many expecting to not only increase hiring but a fair number considering expanding and investing in growing the business in general.

In its March 2017 Report: Small Business Optimism Index, the National Federation of Independent Business (NFIB) indicated that small businesses are holding steady to their higher expectations reported in the NFIB’s previous Optimism Index. According to the Index, 47% of small business owners expect the economy to grow, while the Index also shows that capital spending reached its highest point since 2007.