There are many pitfalls on the journey from startup to successful small business. The statistics aren’t that encouraging. More than half of all small businesses fold in the first five years, and there are a myriad of reasons why this is the case. Sometimes it’s a function of missing capital, and a situation arises that you just can’t pay for. Sometimes it’s due to overaggressive expansion, or poor hiring choices that come back to bite you. Sometimes your product or service simply doesn’t have the market you thought it did, or you aren’t able to use advertising and publicity to distinguish yourself in the space. These are all understandable, but the one pitfall you certainly don’t want to face is losing your company because you are sued and you don’t have the proper insurance protection. Every business out there needs at least some insurance coverage, which hopefully will keep you out of the courtroom and focused on your core business needs. Here are just a few of the different types of insurance your small business might require.
First of all, there’s property insurance. This is something you should consider whether you have a brick and mortar retail store, an office or even if you run your business out of a spare room at your home or apartment. Property insurance is there to protect the building itself and the property it is set upon. You’ll be able to itemize all of your business assets, so that policy will cover all of your furniture, your computer hardware and whatever product inventory you might have on hand. With property insurance you’ll be protected from things like theft, vandalism, natural disasters, fires and floods. Just make sure you check out the fine print behind the policy, so you are well aware of any exclusions that could come back to hurt you.
Property insurance is a great start, but you will want to add a general liability insurance policy on top of that. This is crucial for any small business, regardless of your location. The point of general liability insurance is to protect you, your employees and any customers or clients from suing or being sued due to property damage or injury. These situations are almost never intentional. Someone slips on ice during the winter outside of your office, or cuts their hand on a sharp piece of equipment in a workshop. You should take all possible steps to make your workplace as safe as possible, but accidents will happen. General liability insurance will make sure these accidents don’t cost you your company.
One fairly recent type of insurance that has become quite popular is data breach insurance. This is a necessity in the information age, especially with inexpensive cloud computing pushing many business owners to store their data online. Data breach insurance will cover you and your company in case some sort of sensitive or private information is lost. That sounds grand, but even someone’s credit card number counts as sensitive information. Anything like this that your company possesses is your responsibility, and breaches will lead to legal ramifications. Data breach insurance will protect you whether this lost or stolen information is paper-based or digital. You’ll end up with some sort of sell structured insurance settlement to cover those loses if the breach costs your company money or customers. It’s a unique service, but certainly worth looking into these days.
If you have created a business from scratch and you think that the right time has come to sell, there are a few things to consider if you want to make the most money possible from this transaction.
This is a simple guide to selling an enterprise, which will be useful if you have never sold a business before. And even if you have there should be some tips that could still help you to maximise profits.