How To Keep Your Business Safe

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Between Brexit and COVID19, the last few years have been tough on businesses.  Realistically, nobody is out of the woods yet.  With that said, if businesses have made it this far, they can probably make it to better times.  Taking the right approach will, however, be crucial.  Here are some tips to help.

Make sure you’re using the right business structure

Businesses often go through phases.  Sometimes it’s better to operate as a sole trader.  Sometimes it’s better to operate as a limited company.  Make sure you’re always operating in the correct structure.

Review your business infrastructure

Today, even SMEs (small to medium-sized enterprises) can have cost-effective access to the sort of infrastructure that used to be strictly for enterprises.  For example, even market traders can now take card payments.  What’s more, technology is developing all the time.  It may seem intimidating but you may need to accept it, if not embrace it if you wish to trade effectively in your marketplace.

Leveraging technology can do a lot to make your business run more efficiently.  This means both reducing costs and reducing friction.  It, therefore, frees up both time and energy for other purposes.

Assess your pricing and pricing model

With inflation biting, you probably need to keep your pricing under continual review.  Keep in mind, however, that your pricing model can be every bit as important as your pricing.  In particular, think about how you can use special offers, upselling, cross-selling, value-adds and subscriptions.  These can all help to keep your profits decent without upsetting price-sensitive customers.

Look at your cash flow and financing

Maintaining robust cash flow is always important.  In challenging times it’s essential.  If you have issues with it, you need to address them quickly.  What this will mean in practice will depend on your situation.

For example, it could simply mean updating how you pay your suppliers and/or getting better at credit control.  Alternatively, it could mean looking at solutions like business credit cards/lines of credit, invoice factoring and loans.

Take out suitable insurance cover

No matter how tight money is, never be tempted to skip on insurance cover.  It can end up costing you a whole lot more than it could ever have saved.  Firstly, insurance protects you against life’s general risks.

Secondly, it protects you against being targeted by scammers.  People who have insurance are generally in a much better position to fight bogus claims than those who aren’t.

Income protection cover/critical-illness cover

If you’re self-employed or a company director, these should usually be high on your list of priorities.  Company directors may be able to choose between executive income protection and regular income protection.

Public liability insurance/indemnity insurance

Technically, neither of these are required by law.  With that said, they are often required by local authority bylaw.  They may also be required as a condition of accessing third-party services.  For example, if you want to attend festivals or markets (or run pop-ups), you’ll generally be required to have public liability insurance.

Professional membership organisations may require their members to have indemnity insurance.  Even if they don’t, it generally makes a lot of sense to have it.

Employer’s liability insurance

This is one of the few insurance policies that is mandatory for most businesses (if they have employees.

Key person insurance

If an employee plays a key role in a business, then having key person insurance can be a wise precaution.  As the name suggests, this type of policy pays out if they become unable to work.  It is not a replacement for effective succession planning but can be a useful complement to it.

Business loan protection

This is similar to income-protection insurance but for businesses.  It can help to pay business debts if a key person becomes unable to work due to death or critical illness.

Shareholder protection

Also known as “ownership” or “partnership” protection, this insurance allows a business to buy shares from the estate of a deceased shareholder.  It therefore protects the business from having shares fall into the hands of a potentially difficult shareholder.

Asset insurance

If you have business assets then it’s probably wise to insure them.

(Group) life insurance

(Group) life insurance is a standard employee benefit.  As such, employers should generally offer it unless there is a very compelling reason not to.

For further information or advice, please get in touch.

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