Jo Why Lee

London - United Kingdom

    Business Insurance is Vital for Start up Businesses

    January 21, 2015

    Your Start Up Business

    Starting a new business is one of the most rewarding things you can do. However, it is also one of the most challenging, as you are literally taking the financial future of your family into your hands. The road to success with a new startup is punctuated by many pitfalls, and so often the reality fails to live up to the initial expectations of the entrepreneur.

    Why do so many startups fail?

    Most of the time, a small business will fail as a result of a lack of forward planning. For example, some make the mistake of failing to undertake adequate research to ensure there is a ready market for their product and services.

    An idea may sound great but there is no guarantee that it will hit home with the target audience. Thus, the startup business is doomed to fail if the correct due diligence is not completed, and the entrepreneur will be left counting his or her losses.

    Apart from flawed research, startups can also fail as a result of lost lawsuits, accidents, and other circumstances outside of one’s control.

    Entrepreneurs take risks for the potential reward . However, they aren’t compulsion to shoulder every single risk involved in running a business. This is where business insurance comes in. This type of cover is the best way to mitigate against many of the risks in business, as it helps the entrepreneur to buffer against many of the unforeseen circumstances that can affect a business, new or established.

    When developing a new business plan, business insurance should be high on the list of considerations. It is important to take out a policy to protect your business from going bust as a result of factors that you may not have thought of during your business planning process. If you don’t then you may well rue the decision; or lack of decision.

    Getting the right business insurance

    While getting business insurance, you need to make sure you seek advice so as to get a policy that adequately covers your risks. This is where many startups make a mistake. Your insurance may cover you from bad market reception of your products but does it cover you from financial loss as a result of a fire or shipping disaster? Does your insurance plan cover accidents to your workers? What happens if you lose a lawsuit? All of these are important considerations you need to make as you take out business insurance, so you will be best served discussing your business at length with an insurance expert who has many year experience in the field. I personally spoke at length with one firm who gave me the time and care to pick the right policy, they lured me in with a funny Christmas video campaign but they have treated me very well.

    With adequate planning and the right insurance cover, your startup business stands a good chance of being one of the few startups that make it to their 3 rd anniversary.

    Read Jo's other blog entries >

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