How to succeed as a start-up
There’s nothing slight about America’s small businesses. A nation of entrepreneurs, the U.S. averages 400,000 business start-ups each year; enterprises that go on to contribute in the region of $100 billion to the economy. Those are some impressive and inspiring figures, but as insurers, we like to be aware of the risks.
It’s true that the Bureau of Labor Statistics found that 20 percent of new start-ups fail in their first year. It’s also true that 50 percent go under by their fifth year. That still means 80 out of 100 new starts make it through their first year, and half survive beyond their fifth.
If you’re ready to start your own business, then you’re not the kind to be put off by the odds. You’ve got the vision and the courage to take your shot…so here’s our advice to make your start-up as strong as it can be.
Rule number one – never break Murphy’s Law
A new business is a fragile thing. First-time owners are often underinformed if not entirely unaware of the risks that could cost them dearly, either financially or by the temporary or permanent closure. It pays off to cultivate the mindset of “if it can go wrong, it will”. Cover your start-up in every way you can.
Here is a summary of some key insurance types to be aware of:
• Workers compensation/unemployment/disability. These are three distinct types of insurance, but we’ve listed them together for a good reason: they’re federally required and not optional.
• General Liability. Having this insurance shows you take your business seriously. It will also be on your side to cover any harm you cause to a third party, as well as medical and injury expenses, lost profits, property damage, and legal expenses.
• Product liability. Protects you if your product causes injury or harm. Even if your business merely distributes the product from another source, you can still be found liable.
• Professional Liability. If your start-up falls under any of the business types on this list, professional liability insurance is either mandatory or highly advised. It will help cover if your service falls short through your own negligence.
• Reputational risk. A reputation is a hard thing to win but an easy (and expensive) thing to lose. Reputational risk can be a hazy field so a comprehensive risk management plan can benefit start-ups.
• Property insurance. This protects business assets, equipment, fixtures, and Commercial property insurance comes in different types, covering such perils as fire damage and debris removal.
Rule number two – master the art of social media
Most of your customer base uses social media making it a must for any start-up wanting to be seen and connect with their audience. Two and a half billion people will be connected this way by the end of this year. Don’t go overboard here: choose a few of the key social media platforms and make sure your branding is constant across them all.
Keep your content regularly, true to your identity and engage people by offering insight into your sector via blogs and other posts. It takes time, but the more you post, the greater your online presence becomes. It’s also a good place for promotions, prizes, and putting up notices for that you’re hiring.
Rule number three – have a business plan
Remember the sheer volume of new start-ups every year? A good number of them will likely be after the same customers you are. It pays to study successful businesses in your sector to see how they do things, and it’s crucial to develop your own business plan. Maybe you’re about to start a business, maybe you already have; either way, it’s always the right time for a plan.
The ideal start-up plan considers such things as:
• Can I confidently describe who we are, what we provide, and why customers should care?
• Is there a market for what I want to provide? If so, what state is the market in?
• Who are my competition and what can I learn/differentiate from them?
• Can I form any strategic partnerships with investors/suppliers/distributors which may help me grow?
• Will location impact my business? Can customers reach me? Are competitors too close?
A solid business plan is more than a roadmap for your own reference; it can be a crucial document to sway investors onto your side.
Rule number four – finance yourself well
Reliable cash flow and sensible budgeting can make all the difference in strengthening a start-up. Are you eligible for a loan from the Small Business Administration? It’s a great question to start with. You may also seek financial assistance from other avenues:
• Connect with an angel investor to gain a financial supporter and an experienced business ally
Rule number five – a qualified insurer is your first supporter in business
No matter which start-up model you choose to run with, take the time to sit down with a qualified insurer to discuss all your goals. Who you are, where you are, and what you want can influence which policies will make your business as strong as it can be.
Avante Insurance is a South Florida family-owned and operated agency providing many services to meet customer’s individual needs. If you need insurance advice, you can call us at 305-648-7070 to request an insurance quote or contact us with questions or comments.