A Startup’s Guide to Business Insurance

You’ve finally reached the end of the grueling journey in creating your first startup. We know the feeling, and we know how good it must feel to be here at the end. But before you start celebrating we need to cover a very important to do. Insurance. Your business needs it. After a grueling process of forming your company, you might have forgotten that you could lose all that hard work in the blink of an eye if you go forward without checking for the proper business insurance quotes. Below you will find business insurance tips that will help your startup stay safe and profitable for years to come.

Key Person Insurance

As a business owner, many people depend on you. Customers and employees alike look to you for leadership and guidance. Your company could suffer if you die without a mechanism in place to replace your expertise. If you have key person insurance, you have the assurance that your business has the means to continue if you or your key employee dies.

Upon death, key person insurance pays a sum to the company that will help the company recruit and train a replacement that can fill the shoes the death empties. When you buy this insurance, your key people will know how much you value them, building a cohesive team that will loyally work to achieve your goals. Vendors and banks also like to know you have key person insurance because it improves the chances your company will pay bills after your demise.

Directors and Officers Professional Liability Insurance

If you formed a corporation, you might need to buy directors and officers professional liability insurance. If you hold a board position, if your board of trustees makes controversial decisions, or if your products or services have the potential of harming people or property, people can sue your business for damages. When you have this type of insurance, your insurer will pay for claims made against you. With so many people in our society looking for ways to gain wealth through litigation, you cannot afford to go without this type of insurance.

General Liability Insurance

Regardless of where your business operates, its facilities represent a potential liability that could destroy it. General liability insurance provides coverage if someone gets hurt while on your premises or if a fire or natural disaster destroys your business property. According to personal injury attorneys, in cases of premises liability, a judge and jury look at several factors when determining if the injured person should receive a settlement, but ultimately a property owner is legally liable for injuries suffered by others on their premises. Your insurance will also cover problems resulting from false advertising, copyright infringement, and other acts that hurt others without bodily injury. You could incur substantial legal and medical costs if one person gets hurt on your business property. So buy insurance with the optional coverage you need to protect your firm.

Workers Compensation Insurance

If an employee gets hurt while working for your company, you could be liable for thousands of dollars of medical expenses. Workers compensation insurance makes sure your employees get the care they need for job-related injuries while protecting you and your company from liability. Laws and regulations where your business operates might mandate that you buy workers compensation insurance. As you shop, keep applicable requirements in mind to make sure you buy coverage that meets your legal and business requirements.

Business insurance for your startup can help your company survive lawsuits, accidents, deaths and other routine occurrences. Although you might face the temptation to avoid buying insurance to save money, the reasonable costs associated with business insurance makes it worthwhile in the end. So don’t think you’re cutting any corners by not getting insurance. What you will be doing is creating more of a headache later on down the road if you skip this very important step.

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Remain Locally Competitive: Tips for Small Businesses

Businesses like Home Depot and Wal-Mart offer convenience and affordability to many consumers. The harsh reality of this is that the Wal-Marts of the country tend to sap business from small local businesses. These smaller entities offer similar inventory but are unable to keep their prices comparatively low for several reasons, mostly due to tax breaks and inferior resources.

There are very few industries whose local small businesses are not threatened by larger competitors, or at least the prospect of them moving into the local community. It’s important for all businesses to prepare for the potential impact.

Heed the tips below to remain locally competitive against big businesses.

Remain Locally Competitive: Prioritize Customer Service

One of the most common criticisms of large companies like Wal-Mart is that their customer support is severely lacking. In a thorough article on Kabbage that touches on this issue, several business leaders stressed the importance of customer service for local small businesses in response to the subpar customer service of larger competitors.

“Many people have found that not only is the quality not always there, but the customer service [of larger competitors] is lacking,” explains Craig C. Powell, CEO of 5 Block Radius. “We know what we do and we love it, and we want to create those feelings for our customers too!”

What Powell and many other prudent CEOs of small businesses are doing is emphasizing customer service, recognizing that quality of customer service is determined by effectiveness, not size.

So while the Wal-Marts may be able to outprice small businesses, consumers who recognize the importance of customer support – which is many – would rather pay a little extra for that, as opposed to saving some on a product.

Maintain a Prominent Internet Presence

With practically everyone on social media now, a business would be foolish not to capture their audience on the Internet. Small local businesses should use their local connections and pride to connect with locals in the area. This can be done in two ways:

  1. Regularly providing interesting content on social media
  2. Showing support for the local community

Both tasks can be easily accomplished with tweets or Facebook posts.

As this Entrepreneur article explains, it’s important for businesses to nurture their social media following because Google ranking regards social media presence as a prominent factor in its algorithm. A small business has a smaller scope than big corporations, but the small businesses are able to better provide a humanized, personal experience to their followers, a fact that they should take full advantage of.

Strive for a Highly Connected and Collaborative Company

A Forbes study found that companies who utilized enterprise collaboration platforms to better connect their company experienced a 12% increase in sales, a 75% decrease in support calls and a 75% decrease in the time required to generate and maintain content.

Indeed, seamless collaboration and communication makes any business more efficient by providing employees with a transparent flow of information that can better aid their tasks and result in a more optimized work environment.

Speaking of collaboration, some small businesses could prepare for an incoming larger corporation by considering a collaboration or merge with another small local business specializing in a similar niche. There are many strategies based on collaboration and connectivity that can excellently prepare a small business for a larger competitor.

Appear Professional

It’s important to remain personal and connected with customers on a more intimate level than that of larger businesses, but small businesses also need to exude a certain level of professionalism reminiscent of these larger corporations. It shows a level of organization that consumers are confident in.

Small businesses should strive to make every aspect of their business professional, from the way they answer the phone to general attire to the design of their business cards or web site.

Focus on a Niche

Superstores like Target or Wal-Mart may be able to cover mostly every industry, but there’s rarely a passion for that niche demonstrated by employees or the general selection. A small business, on the other hand, can choose to focus on a niche to a substantial extent, holding events that would interest this demographic.

Provide Personalized Value

Many big-name stores are great at providing value when it comes to costs; however, small businesses are able to provide personalized value that large business cannot. Providing customized services and a more personal approach can greatly enhance the value a customer feels they are getting. For instance, contracting company Sunshine Contracting offers a learning center and free estimates to provide enhanced value to their customers throughout projects.

Small business can also provide media representative of their passion, such as a YouTube tutorial for the field. For example, a local hardware store could create a video tutorial on how to build a deck chair, which has the chance to go viral and provide advertising that rivals the large competitors. By presenting this tutorial to their audience on social media, they’re providing a valuable resource. They also affirm that they are truly passionate about the subject and should be considered the knowledgeable go-to source in the local area.

The prospect of a Wal-Mart moving into town can be daunting for small local businesses, but the tips above can help them prepare for it by embracing local roots and small business passion. Any quality small business can compete with the likes of Wal-Mart, Target and Home Depot with the right strategy.

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