Plain and Simple Ways to Protect Your Business in Tough Times

Now, the trick is to navigate from survival mode to prosper mode. While charting this course, it is imperative to stay clear of any of the seven sinkholes that can kill a business. In her book "The Seven Pitfall of Business Failure and How to Avoid them," Patricia Schaefer list these as; 1. Starting a business for the wrong reasons, 2. Poor Management, 3. Insufficient Capital, 4. Location, Location, Location, 5. Lack of Planning, 6. Overexpansion, and 7. No Website.

Now what to do? Did you know that your insurance professional can help make sure you survive these seven deadly sins of commerce? Arming you with information, insurance programs today provide you with resources and services that protect and assist in your survival mode. In order to grow today, more than ever, businesses must pull all the free and value-added resources or services from all their vendors.

The first thing your insurance professional should do is temper your ever-optimistic hope for success. Instead, they should illustrate what similar businesses, i.e. your competitors, have had go wrong. While this may seem like a big buzz kill, it is an essential step in identifying the second and fifth reason businesses fail: poor management and lack of planning. (And besides, there are few bigger buzz kills than losing one's business.)

Understanding the hows and whys of the failure of competitors is like having a magnifying glass on industry secrets. Your insurance professional should provide you with a risk assessment that shows what types of claims peer groups businesses have had that shut down their business or suffer big losses.

Equally important they should identify specific local or state laws that require some business operations to carry certain insurance coverage. For example, an important area that has grown recently into a huge headache for many organizations is the Employment Practice Liability. This coverage protects an enterprise from the maze of allegations made by employees for harassment, discrimination and some limited way ad hour violations from payroll processing.

In the day-to-day operations of a business, is there anything more complicated and time-draining than handling a "difficult " employee related matter? Many of your agent's insurance company partners will provide you with free legal counseling to get a quick answer or that will help assure a policy or procedure is in compliance with the state law. Why pay a high-priced attorney for the same information? And to help prevent any "difficult" employee-related matters in the future, they can furnish the clients with sample employment policy language or procedures to help you meet legal employment requirements and successfully manage your operation.

Ms. Schaefer lists "Insufficient Capital" as the third reason businesses fail. (Has a business ever failed because of too much capital?) Your agent can help steer your business past this pitfall. One of the main reasons for lack of sufficient capital is an unforeseen financial loss. A review of your business income insurance usually provides the tools to avoid this common mistake. Business income insurance is disability coverage for your business. It ensures your get paid if you lost income as a result of damage that temporarily shuts down or limits your business.

While "Location Location Location" may be very important - and already a done deal for your company - your agent can assist you in making sure you have a safe and protected location, including making sure your work stations are ergonomically correct to protect the most valuable asset of most businesses: its employees. Ergonomics is defined as the science of designing the job, equipment, and workplace to fit the worker; it is an often - overlooked area of many business settings.

Your Insurance Agent also can review a firm's "product liability" and "errors and omissions" insurance. Product liability coverage is what you'll need if you make a product that could conceivably harm someone. Errors and Omissions coverage protects you, should there be a mistake or should you neglect to do something that causes a customer or client harm.

To keep your business safe, it is not enough to know the seven reasons why businesses typically fail. You must take action. Information gathering is the first step, and seeking out the advice professionals is the best way to start.

The above ideas and suggestions are a jumping-off point to protecting your business in order for it to grow and prosper.