Starting a new business is scary. It is hard to delve into the unknown without any knowledge of what might lie ahead. To help new business owners get the right foot forward, here are some tips that you can employ from the outset.
1. Stay focused
When you are starting a new business, it is easy to get sidetracked by every opportunity that comes along. However, jumping at every new opportunity will prevent you from staying focused on your ultimate goal for your business. Also, you will end up spreading yourself so thin you will not be effective anywhere. It is better to stick with one focus and do it well rather than picking ten focuses and failing at them.
2. Do what you know
Stick with a business you know. Entrepreneur states that businesses that are built on your strengths and talents have a better chance of succeeding than a business that is chosen because it is trendy or boasts favorable hypothetical margins. Choosing a business you love will guarantee that you go to work happy and that you will enjoy what you’re doing, which will result in creating a profitable business.
3. Act like a start-up
When your business is in its earliest stages, it is best to start small. At this point, there is no need for a large, fancy office or a huge expense account. All of those goodies can come after the business is established. The outset of a business is a time to practice frugality. Watch every penny you spend and try to maintain a low overhead. Effectively managing your cash flow can be the difference between surviving and closing the doors for good.
4. Make a business plan
NOLO Law for All suggests that even a short business plan is better than no plan at all. Business plans are important because they provide a blueprint for understanding the potential profits of the business. Key portions of a small business plan include a break-even analysis, a profit-and-loss forecast, and a cash flow projection.
5. Insure your business
Every small business should be adequately insured. There are many different types of available insurance policies that are tailored for small businesses. Some types of insurance are appropriate for any type of small business, such as general liability, worker’s compensation, and professional liability. There are other types of insurance that are more specific such as commercial auto insurance, data breach insurance, and property insurance. A list of 13 possible types of insurance that Forbes suggests for small business can be seen here.
One type of small business insurance that is often overlooked is employment practices liability insurance. This type of insurance protects a small business from employee-related lawsuits. Often employees of a small business “feel” like family when everything is running smoothly. However, when a bump in the road occurs, that can change. Even the friendliest workplace is subject to issues such as failure to follow appropriate procedures or employment law that can result in a nasty lawsuit.
From what issues does EPLI protect a small business?
EPLI protects business owners from claims that are related to wrongful termination, sexual harassment, a hostile work environment, and other similar issues.
Why does a small business need EPLI?
With all of the other expenses involved with starting a business, proper insurance might not be at the top of the list of expenditures. However, if a business owner hires employees, this is coverage that should not be overlooked. Employee-related lawsuits are on the rise. Just one lawsuit of this nature can cost in excess of $30,000. Without EPLI in place, the costs will need to come from the business. On the other hand, EPLI will cover all costs related to the lawsuit, including settlement payments. The premium costs for a full year of coverage are far less than the cost to defend the case, so it makes fiscal sense to obtain this insurance.
Human Resource assistance
An added benefit to obtaining EPLI is that most insurance companies also include assistance with human resources issues at no extra cost. This service helps businesses develop employee manuals and can provide ongoing answers for various human resources questions, such as employment and staffing questions. . This feature is especially helpful to new small businesses that do not have and cannot afford a human resources department.
Opening up a new small business does not need to be a nerve-racking experience. Staying focused and following a few tips can help get you started on the right path. Your business needs to have adequate insurance to be protected from any unforeseen pitfalls that can result in costly lawsuits as well.
Marine Agency has been a leader in the insurance field since the 1920s. We put our expertise to work to serve our customers by providing customizable insurance solutions to fit any business’ needs. Contact us today to discuss your EPLI or other business insurance needs.