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5 Types of Insurance Every Small Business Needs

Ready to take your small business to new heights? As a small business owner, you’ll need every advantage you can find in today’s highly competitive, global business landscape.

Becoming the next startup like Uber or Airbnb that now are valued at $1 billion or more by venture capital firms worldwide remains an uphill climb. As such, small business owners may devote substantial time and resources to grow their companies, yet many of them will fall short of achieving their long-term business goals.

Attention to detail is what separates an average small business operator from an extraordinary one. With the right types of insurance in place, small business operators can protect their assets as they grow their companies.

Here are the types of insurance you may need to achieve your business goals:

1. General Liability

General liability insurance offers broad protection for small businesses. It ensures they are covered against a variety of risks, including:

• Bodily injury
• Property damage
• Personal injury

The costs associated with general liability coverage often vary based on risk. Thus, if you work as a roofing contractor, you may be forced to pay more for general liability insurance than a food truck operator. Or, if you run your business out of a home office, your general liability insurance expenses will likely be minimal.

Regardless of your business type, general liability insurance can make a world of difference for small businesses across all industries. This insurance guarantees that even if your company makes a mistake along the way, you’ll be protected. You’ll be better equipped to maintain your business’ day-to-day operations and focus on what’s important—growing your company.

2. Property

Like general liability coverage, property insurance protects the future of your business by safeguarding your office equipment, inventory and even others’ property.

Furthermore, property insurance protects your company in the event that a major disaster damages or destroys your workspace. This means that even though a fire, busted water pipe or major storm could devastate your business assets, you’ll be covered until your company can return to its regular operations.

3. Auto

If you operate a vehicle to deliver flowers, carry equipment to and from work sites or use a car or truck to perform various everyday work tasks, you’ll want to purchase business auto insurance.

In many cases, a small business operator may own a car and use a personal vehicle as part of his or her business operations. Your personal auto policy in some cases may not cover you if you suffer an accident in a car that you use primarily for business, therefore it is important to discuss with an agent to determine if you need a business auto policy to protect you against certain risks as you travel from place to place. If you purchase the right business auto insurance and set appropriate coverage limits, you’ll be protected whenever you use your vehicle for work.

4. Professional Liability

Don’t let a single professional error bring down your business. Instead, purchase professional liability coverage, and you’ll be able to protect your company against accidental errors and omissions.

Let’s face it—even a diligent small business owner will occasionally make a mistake. From an accountant who processes a client’s tax return incorrectly to a hair stylist who damages a bride-to-be’s hair before a wedding, accidents can happen at any time, and these problems can become major issues quickly if you’re not careful.

Fortunately, professional liability insurance will enable you to cover the costs associated with damage or other problems due to a professional mistake. This coverage may prove to be exceedingly valuable for startups, and ultimately, it may even help a small business operator become more comfortable performing day-to-day tasks. Professional liability insurance can allow small business owners to work more confidently and efficiently without having to worry about how a single professional error could potentially harm his or her business.

5. Workers’ Compensation

Workers’ compensation coverage is a requirement for businesses in every state except Texas. It provides a small business owner and his or her employees with protection in the event that an employee suffers a work-related injury or illness.

In addition, workers’ compensation coverage provides small business operators with a great opportunity to build goodwill with employees. If an employee suffers an injury or illness and is unable to return to work, he or she will receive sufficient compensation thanks to this coverage.

Small business owners are all too familiar with risk. With the aforementioned types of insurance at your disposal, you’ll be better equipped to manage business risks both now and in the future.

ryan-hanley

About Ryan

Ryan Hanley is the Vice President of Marketing at TrustedChoice.com and the Managing Editor of Agency Nation. He is also a speaker, podcaster and author of the Amazon best-seller, “Content Warfare.” Ryan has over 12 years of insurance expertise and blogs frequently to help consumers understand complicated insurance topics.

 

By | October 13th, 2016|Business Operations, Running A Small Business, Startups|3 Comments

Your Franchise Business Structure Questions Answered

FRANCHISE Thoughtful male person looking to the digital tablet screen, laptop screen,Silhouette and filter sun

Thinking of starting a franchise? A lot of new franchisees expect that absolutely everything will be taken care of by the franchisor. While yes, a lot of processes, supplier relationships, et cetera, will be handed down to you by your franchisor, there are some decisions you’ll have to make, such as what business structure your franchise will use.

Now that you know you’ve got a big decision, you likely have questions. Here, I’ll answer some of the more common questions from franchisees about business structures.

Which Business Structure is Right for Me? 

While there’s no one-size-fits-all answer to this question, generally the answer falls into one of two camps:

Both of these business structures provide protection of your franchise, as well as your personal assets. If you choose no business structure, you’ll operate as a sole proprietor, and you’ll put yourself at risk. If your franchise is ever sued, your personal assets can be taken to cover costs.

On the other hand, with both the S Corporation and the LLC, your personal assets can’t be touched, because you’re considered separate from your business entity.

What are the Differences Between the S Corp vs the LLC?

While there are a lot of similarities between these two business structures, including pass-through tax treatment, protection of personal assets, and unlimited duration, there are a few key differences.

The S Corporation tends to require more rigid paperwork and processes. You’ll need to assign a Board and meet with them annually, as well as file an Annual Report. The LLC requires less formality.

Also when it comes to owners, the S Corp only allows US citizens or residents to be owners, and limits shareholders to 100.  An LLC may be owned by other LLCs or corporations, and the owners do not have to be US citizens or residents. You can have an unlimited number of owners in an LLC.

Where is the Best Place to Incorporate or File as an LLC?

You may hear that certain states are better to form a business structure in, even if you don’t do business there. Yes, some states have low or zero state tax, but that doesn’t make them the best place to form a business entity.

My advice is to form your corporation or LLC in the state you plan on running your franchise. Otherwise you may have to file additional forms and pay extra fees to register in a state other than where you do business, and in my mind, it’s not worth the hassle.

How Hard is it to Incorporate or File an LLC?

You’ve got several options here. If you’re all about DIY and don’t mind a little paperwork, you can download the appropriate form for your business structure from your state’s Secretary of State website. Some site even let you file online. You’ll need to provide basic information about your business including contact information, officers’ names, and the nature of your business. You’ll pay your incorporation or filing fee, which is usually between $100 and $300.

If you’d rather let someone else handle the work, you can employ a business filing services company that will take care of the paperwork on your behalf.

Depending on how busy your Secretary of State’s office is, you can expect to get your business structure approved in a month or two. If you work with a filing service, you can expedite the process to get it approved within a matter of days.

Want help moving forward with incorporating or forming an LLC for your franchise? Give us a call for a free business consultation and we would love to help! 888.449.2638

Image: Adobe Stock

How Being A Mom Makes You A Better Business Owner

FullSizeRender-22While many people may think that parenthood and running a business collide like oil and water, I can tell you from direct experience they’re mistaken.

My family has always fueled my successes rather than stand in the way of me achieving them. And as Mother’s Day 2016 approaches, I’ve been reflecting on the many ways being a mom to my four children has made me a more effective and intuitive entrepreneur. I want to share them here because I believe other entrepreneurial moms (and moms-to-be) out there should feel confident in embracing how motherhood strengthens them professionally, too.

How Can Being A Mom Make You A Better Entrepreneur?

  • You learn to listen.

As a mom, I’ve become more adept at actively listening, so I truly understand what’s happening with my kids and how I can guide them. Listening, of course, is a critical skill for earning the respect and trust of clients, too.

  • You develop patience. 

Yes, children can and will test your patience from time to time. I can vouch for that. But over time, I’ve learned that getting frustrated or angry never helps. As a parent, you’ve no choice but to work on becoming more patient—and that’s a characteristic that helps immensely when working with customers, as well.

  • You become more punctual and organized.

Whether you have one or ten children, parenthood demands that you have your act together. As a mom, I’ve become better at planning, paying attention to schedules, setting priorities, and keeping details in order.

  • Your public speaking skills improve.

When talking to children, you need to keep the message clear and you need to make your point before their short attention spans expire. That’s very similar to what you’re dealing with when speaking publicly. I’ve found that when I’m speaking—whether at large events or in small group settings—I’m more direct and clear as a result of being a mom.

  • You learn to establish boundaries.

While it’s tempting to try to be your kids’ best friend, that can have devastating effects in the long run. The same can be true if you put being a best friend ahead of being a good leader to your employees.

  • You open your mind and learn not to overreact.

While I’m happy my children appear to feel comfortable telling me anything and everything, I admit that I’ve been caught off-guard on occasion. Rather than overreact, I’ve learned to keep an open mind and calm demeanor so as not to alienate them or betray their trust in me. Applying that same objectivity and composure in challenging business situations can help lead to solutions faster than getting caught up in the drama.

  • You realize the importance of setting a good example for others.

Seeing how my children look up to me as role model, I’ve become more in tune with and aware of my actions and reactions. This helps in business, too. Actions really do speak louder than words. Lead by the example of how you conduct yourself rather than telling people what you expect of them.

As you can see, there are many correlations between being a mom and being a business owner. Whether you have a family and are just starting a business or have a business and are just starting a family, embrace how the two entwine to make your life—personally and professionally—all the richer.

Happy Mother’s Day!

4 Tips for Doing Business Globally

Doing Business GloballyWhether you’re starting a business on an international scale or expanding your existing business to include foreign markets, doing business globally presents some situations you ordinarily won’t face domestically. Use the following four strategies to penetrate overseas markets and share your business plan internationally.

Examine Data to Select a Flagship Product or Service

Learning how to do business globally can take time, so don’t feel overwhelmed. Even if your product line includes dozens of items, start with a single flagship product or service in an overseas market. Global TradeSource Ltd. founder Laurel Delaney advises business owners to “narrow it down, keep it simple, and choose a product or service that sells.”

Review any domestic data you’ve collected about your products and services, such as sales reports and customer feedback, and research your target market. Look for a gap to fill. If you can offer a product or service that a particular market can’t access now, you’ll gain a larger potential customer base.

Seek Effective Ways to Communicate

Language barriers can make doing business globally more challenging. Consider visiting a country before you attempt to expand into the market. Marc David Miller, managing director for Discovering Eurasia, recommends hiring a translator to go with you.

You might also benefit from Skype as a communication tool. In 2015, the video-chat and voice-call firm introduced translation functionality for desktop users. When you communicate by voice or text, the system translates your speech so you avoid miscommunications.

Find a Global Payment Option

Before expanding overseas, you need a way to send and receive money that won’t deplete your financial reserves or put your business at risk. When you start global transaction using a money transfer service, you’ll immediately see the transaction fee and exchange rate. The lack of hidden fees makes budgeting your expenses while you expand into foreign markets easier.
Keep detailed financial records for all international payments. If you operate domestically as well, consider maintaining separate financial documents and a general ledger. Work with an accountant who has experience in international finance so you can receive practical advice.

Learn Local Customs

Customs for social and professional interactions vary from one country to another. In Japan, for example, professionals treat business cards with far more reverence than they do in the United States. Japanese business professionals also value silence over small talk and take offense to high-pressure sales tactics.

Businesses and customers in other countries understand that you might not know all of their customs. If you learn about them, however, you show a high level of respect, and you might put your business in a better place to gain momentum in a particular market. Consider consulting a business etiquette expert in your target country before you travel there.

Expanding your business into foreign markets creates more opportunities to generate revenue and increase the reach of your products and services. The more you understand about doing business globally, the easier you will be able to conduct yourself and your business well overseas.

JT Ripton is a business consultant and freelance writer who enjoys writing about a variety of topics, business and technology being a couple of them. You can follow JT on Twitter @JTRipton.

Image: Dollar Photo Club

15+ Online Resources for Startup Funding

PC01107If you’re contemplating getting funding for your startup, start by researching your funding options. Once you’ve decided which financing option is best for you, use the following resources to do your homework, find the best company to work with, and position your business as an attractive investment.

Small Business Loans

By far, the most popular type of small business loans are those backed by the Small Business Association. Banks and lenders that offer SBA loans are currently offering loans with interest rates between 4 and 10% and 25 year terms. You can take out an SBA loan for:

  • Starting a business
  • Working capital
  • Purchasing property
  • Equipment, fixtures, Inventory
  • Lease-hold improvements
  • Refinancing debt

The SBA offers general small business loans (through its 7(a) loan program) as well as those targeted to businesses with specific needs, like real estate and equipment loans, microloans, and disaster loans. The SBA also offers grants and other financial assistance. Continue reading “15+ Online Resources for Startup Funding” »

By | December 9th, 2015|Business Finance, Startups|1 Comment

Startup vs. Corporation: Which Suits You Best?

Startups seem to be taking over the world and, as they do, more and more people are attracted to the idea of working at one. For anyone in that situation, it is important to understand the differences between a startup and a traditional company so that they can make an informed decision. Luckily for them, StartupCVs, a recruitment platform for startups, has put together this helpful infographic, which details just what to expect.12 Tips That Will Get You Hired at a Startup

By | November 27th, 2015|Startups|0 Comments

[INFOGRAPHIC] Everything You Ever Wanted to Know About Startups

The 21st century has its own set of inverse issues to deal with including, instant connectivity to customers and global competition. In the information age, startups are also dealing with plummeting cost of entry for new ventures and re-imagining new and traditional markets as part of the connected world.

Traditional small businesses have a 75% of surviving the first two years, meanwhile startups , even with VC backing, have a 75% failure rate. Startups are often headed by a strong leader or leadership group who are willing to take risks in order to bring forth a new and imaginative product. Staying in touch and often working long hours is critical for many startups in the early stages, as things can change and take a turn for the worst so quickly. Customer feedback is very important to keep things running smoothly and to help make the product or program the best it can be on a small budget. If the entrepreneur has a mentor, there is a greater chance of overall success. It’s also best to choose an area which has more successful startups.

In this Startup Genome Project 2.0 infographic, you’ll find a world map illustrating the most successful places for startups all over the world  as well as a chart explaining which global city is best for the following categories: performance, funding, market reach, talent, startup experience, and fastest growing.

The Startup Genome Project 2.0
Source: ComputerScienceZone.org

By | October 16th, 2015|Startups|0 Comments

What is Bootstrapping?

Hand writing Bootstrapping with marker, business conceptWhen you start a business, it’s inevitable that you’ll need funding: funding for equipment, inventory, payroll, and oh yea, you might want to pay yourself as well! While you’ve got many options to consider for how you’ll get that funding, bootstrapping is one that might move to the top of your list.

What It Is

Bootstrapping simply refers to funding your startup on your own. The saying “pull yourself up by your own bootstraps” means to help yourself without assistance from anyone else. The same applies to your startup. By not relying on a bank loan or investors to fund your company, you are essentially pulling your business up by its own bootstraps.

Why to Consider It

When you take out a small business loan, you owe monthly payments, and are beholden to that loan until it is paid off. If you bring on investors to enhance your finances, you give up a piece of equity in your company in exchange. Often, they’ll want to give input on how you run your business. If you pay for business expenses with credit cards or a second mortgage, you’re also financially responsible for that debt. Continue reading “What is Bootstrapping?” »

By | October 1st, 2015|Business Finance, Startups|0 Comments

10 Tips to Making Startup Funding Work for You

Whether you plan to create a crowdfunding campaign, pitch venture capitalists or investors, take out a small business loan, or use your own savings, there are strategies to succeeding in your efforts. Here we have 10 tips guaranteed to make your startup funding a success.

If You Seek Funding from Investors…

  1. Know What Investors Want

If you’ve ever watched Shark Tank, you know a lot of startup founders come unprepared for what the Sharks want to know. It should be common sense that you have the numbers the investors will want, but still so many walk away empty-handed, even if they have killer ideas. Make sure you know your company’s valuation, past sales, and any major contracts you’ve secured before pitching an investor.

  1. Have the Right Business Structure

Creating an S Corp is the best way to ensure your startup is attractive to VCs. They don’t want their own personal assets at risk, which is why they prefer to invest in S Corps.

  1. Know Your Audience

If you don’t know who you’re selling to, how can you sell investors on the idea? Come armed with market research so you can identify your ideal customer down to that freckle on her nose. Continue reading “10 Tips to Making Startup Funding Work for You” »

By | September 23rd, 2015|Business Finance, Startups|2 Comments

How Should I Fund My Startup?

Piggy bank wearing a black glasses over yellow wooden wall

Launching a startup is one thing, but finding funding enough to keep it going through those difficult growing pains can be quite another. If you start a business without enough cash for at least the first year, you could be setting yourself up for failure.

Fortunately, there are several funding options for you to consider.

Crowdfunding

This is the hottest way for startups to get a quick infusion of cash. With crowdfunding, you set up a campaign through a site like Kickstarter and open it up to investors. Now, these aren’t fancy-pants $2 million investors. They’re people just like you and me who want to support a business they believe in. They might donate as little as $5, so you’ve really got to build support around your campaign to keep the money flowing in.

As a token of appreciation, most sites require you to offer some sort of compensation or thank you, like a t-shirt with your logo, or maybe an early release version of your product. But you don’t have to pay the money you raise back, which is a blessing. Nor do your investors actually have a say in how you run your business. Continue reading “How Should I Fund My Startup?” »

By | September 16th, 2015|Business Finance, Startups|0 Comments