Small businesses in New Zealand that employ between 1-19 staff account for one third of all NZ businesses. Businesses with no employees (or sole traders) account for a whopping 63.7% of businesses. Kiwis clearly value owning their own business and being their own boss, but it doesn’t come without its stresses and risks. Regardless of whether you’re a sole trader or have a small team behind you, the unexpected can happen at any time. You could get injured on the job, a family emergency might take your focus away from the business, or an unexpected global pandemic or economic recession could suddenly impact your industry. We don’t have a crystal ball to prepare us for what’s around the corner, but we can certainly take practical steps to ensure your business, your team, and the people that depend on your income are somewhat protected from the unexpected.
Protecting one of your biggest assets from economic uncertainty, competitors or industry pressures is a proactive step that all business owners should be undertaking. After all the hard work it takes to get a business off the ground, you’d hate for poor planning to be the reason for its demise. It’s also likely you’ll have others depending on your business’ success. Whether that’s your family that rely on the income you generate or your employees that rely on their salaries to support their families and mortgage payments - your business can be important to a number of interested parties.
In this article, we’ll cover our top ten suggestions for ensuring your business can weather whatever storms are ahead. After all, we’re sure you’d want your business to be in the best shape possible if the unexpected were to happen.
Making a plan and having a formal business plan in place are two very different things. In the early days of setting up your business, making a simple plan may be all you need. Tapping useful government resources is a great place to start and ensure you have all your ducks in a row before purchasing a business or committing your hard-earned savings to create a new business.
Important steps for starting a business include:
No matter whether you’re in week one, year one or year five of your business journey, having a plan will always be important. Simple planning can evolve once you lock down your initial business idea and have investigated whether it’s a winner. Setting up your business to trademark names, register your company and understand your accounting needs are all important building blocks to success. Once you’ve ticked off these important foundation steps, it’s time to get into formal business planning.
Creating a structured plan for month one, year one and understanding where you want the business to be headed once you get to year three or five are all important to understand how you want to run your business and what decisions you need to make along the way. Importantly, business plans don’t need to be complex documents. A simple business plan can be all you need to crystallise your thoughts on how you will grow your business, pricing, sales, marketing and so on. It can also help your team understand what you’re trying to do with the business, and where you’re wanting to take it. The first steps are to create a SWOT analysis - understanding your business’ strengths, weaknesses, opportunities and threats will assist your ongoing decision making and planning for the future.
Now that you have a plan in place, don’t lose sight of some of those important foundation steps in the excitement of getting on with the day to day running of your business. Your business name should be unique in your industry, as you don’t want to run into issues in the future with someone else challenging you on your business or branding. Once you have a business name - trademark it! It’s not just your business name you may wish to protect either. You may have a product, invention, design or packaging that you’re keen to protect as well
The type of intellectual property (IP) protection you may need can be confusing, so seek professional advice if you’re uncertain about your business needs.
You may need upfront legal advice for your business, or need ongoing legal support. It’s important to seek a legal advisor who understands your business and industry, with experience managing the types of queries or issues you may have. A lawyer will ensure you’re taking all the right steps to protect yourself and your business.
How might a lawyer be able to support you? Business lawyers can support you with establishing a company structure, creating legal contracts, protecting your intellectual property, drafting and negotiating employee, partner and supplier contracts, drafting your terms and conditions, and any online legal documentation you may need for a web-based business.
They say that your reputation can make or break a business. In a small country like New Zealand where new business is so often based on referrals and word of mouth, it’s important to take pride in your reputation, and take steps to manage it. Keep in mind some of these helpful tips:
Making sure you have the right insurance in place for you and your business is important. Running your own business is one of the most rewarding jobs, and watching it succeed makes all your hard work worthwhile. That’s why it’s important to protect it with the right level of insurance and succession planning.
To ensure your business is adequately protected, it’s wise to talk to an insurance company like Chubb Life that offer tailored business insurance cover
Our Advisers can sit down with you and talk through possible scenarios and how they might impact your business, and recommend the right mix of cover to ensure that your business and those who depend on it can be protected if something were to happen to you as a key person or shareholder.
You may wonder if it’s an additional business expense, but it’s worth thinking about how your business would fare if you got seriously ill or could no longer work. How would your business repay debt or suppliers? Do you have a plan for how the business could continue to operate and provide for your employees or your family if something were to happen to you? A Chubb Life adviser can take you through the options for coverage and make recommendations tailored to your needs.
In addition, you may also need to consider additional personal insurances such as income protection. Life insurance can financially protect your loved ones if you were to pass away or become terminally ill, but trauma cover or income protection cover can be added to your policy to offer more protection, especially if you are a key earner in your family.
Cybersafety, data breaches, online threats. In today’s world these are significant business issues, regardless of whether you operate your business largely online or not. Even businesses with a physical storefront need to be mindful of managing customer data and sensitive information about your clients or business operations. Cyber security is a hot topic, and includes data breaches, malware and denial-of-service to your website or payment systems. It’s really important to assess the data you hold and put plans in place to protect it.
Importantly, you don’t need a large IT budget to manage many practical data security solutions. Password management, two-factor authentication and backing up your data are all simple, inexpensive tasks that can help keep your business safe from cyber attacks. It can be useful for someone in your team to be tasked with managing these tasks and regularly reporting on updates. If you need external support, consider using a reputable IT service provider to help you navigate the steps you need to undertake.
Consider the impact on your business if you opened your customers up to cyber attack - this sort of reputational damage can be difficult to come back from.
Keeping a close eye on your Profit & Loss Statement each month will help you ensure your business is profitable and sustainable. Working with a good accountant can help you with monitoring your key financial indicators, planning for the future, and ensure that your tax obligations are taken care of in a timely manner.
Good financial management and financial planning can help you meet your expenses and overheads, while still working towards those financial goals. Building up a contingency fund can also be useful so that if you do have something unexpected happen - a supply issue, a pandemic lockdown or a bad debtor, you will have the cashflow available to cover your business in the short-term.
There is specific insurance cover available for this scenario too - Business Overheads Cover ensures you can cover your monthly business expenses (rent, electricity, vehicles expenses and so on) if you were to fall ill or be injured.
NZ Police has plenty of tips for preventing crime at your place of business. Frequently review your cash handling procedures, retail layout and use of mirrors so you can safely monitor your store or incoming/outgoing traffic. Video cameras, alarm systems, lock security and safety boxes can help give you peace of mind that your premises are as safe as they can be. Comprehensive insurance is important here too. In addition to insuring your building, make sure the contents (tools, equipment, stock etc) is insured too. Work vehicles that are on site should be insured as well.
Hazard and emergency planning is a good thing to do with your team. Worksafe has some great resources for you to create your own emergency plans
Items you’ll want to cover off in your planning and procedures include:
Known hazards are good to keep a record of and plan for - a potential gas leak, flood risk, trip hazards and so on.
In the instance of an emergency, there are insurance policies in place to protect your business and personal needs. Check out Assurance Extra, a wide range of policies that protect you from unforeseen trauma, injury and illness. In an emergency, protecting your business as much as possible from financial impacts and keeping it running smoothly in difficult circumstances is crucial to your ongoing success.
Knowing your competitors, and regularly monitoring their activity can help your business maintain a competitive edge. Understanding their strengths and weaknesses can help you gain insights into where your market opportunities are.
In addition to keeping across your competitors, you’ll also want to keep close to your current customers. Understanding their needs, and building loyalty with your customer base can help to ensure that your business is meeting their needs as much as possible, and identifying new opportunities as you go.
Businesses should never be ‘set and forget’. As your customers and team evolve, you should always be looking for ways to innovate, stand out and deliver a fantastic product or service. In this way, you’ll stop your customers from looking elsewhere, and grow your business into a truly successful one.
If you’re wanting to protect the most important business, you, then no matter then contact us today
A Chubb Life Adviser can tailor a personal life insurance policy or a life cover for business policy to suit the specific needs of you or your business. Peace of mind that you’re well covered can certainly help you feel prepared for whatever unexpected challenges come your way.
Find the right cover for you or your business
To make sure you choose the right cover for your needs, a qualified Insurance Adviser can help. We can connect you with an Adviser near you. Leave your details and someone will give you a call for a quick, no-obligation chat about your personal insurance needs.