It is your future!

Think about it carefully, it’s your future!

It takes a sense of ambition and bravery to be a Vegan or Ethical entrepreneur. Everyone knows that and most people tend to respect those who are prepared to attempt it. Long hours, worry and sleepless nights are a natural consequence of seeking success. You probably also need to worry about key employees, raising investment funds/keeping investors happy, dealing with your bank and in some cases also looking after a family.

Despite all that it’s a pretty cool thing to be an entrepreneur and business leader.

The thing about business success is that risk taking is an absolute necessity. It’s really the only way to get ahead of competitors, to stand out, to be different. The problem with the upside of successful risk taking is that it can have an equal and opposite effect that can destroy your dreams.

Lets get the back of a fag packet out. It’s estimated that some 1% or more of UK start ups over a 5 year period will fail due to disaster, fraud or incidents that can be insured against. Apparently there has been some 2m start ups across all industries over the last 5 years

A 1% failure rate simply because a risk wasn’t insured, or wasn’t properly insured means that some 20,000 start up companies fail as a result of insurance related failure. That seems pretty daft to us!
There are many things that can cause the failure of a business including loss of cash-flow, reputational damage, legal battles, product recall and so on. In addition, there is the personal risk of being sued as a result of your role as a director by investors, regulators, HMRC, employees, suppliers and many other stakeholders. Globalisation of trading and supply chain systems has intensified risk exposures. Trading across different countries magnifies the legal risk to directors.

It is worth pausing to think what you would do if any of this happened to your business. It could be an absolute disaster. Imagine your supply chain failed or you infringed someone’s Intellectual Property? Imagine the anger of investors if you failed to insure properly against interruption to cash-flow which caused a drop in the value of the business or even complete failure?

Our point here is this. Risk management and insurance protection are vital, boring though that stuff sounds when you are pushing your business forward. It doesn’t matter if you are a 3 employee firm or 300 employee firm, the dangers that lurk are powerful and the pitfalls deep!

Think about this. Risk and insurance are complex beasts. Get help to properly assess just where the exposures are and what you will do to protect yourself and the business against them. Leave the risk exposure as it is, manage the risk exposure or transfer the risk exposure to someone else (insurance companies)?

If you are buying insurance be very careful about doing it online. We know there is the impression that it will be cheaper but we promise you, the devil is absolutely in the detail. Be sure the policy will actually protect you when you need it. All insurance policy wordings are different (there are over 900 authorised insurance companies operating in the UK). They only way to know if you have the right wording is if you understand all your risks.

By the way, the average length of a policy wording is 26,000 words of legal jargon. That’s the same as the average novel. And you will probably have several policies to read.

Many businesses see dealing with insurance as a distraction, something to get over and done with as quickly as possible at the lowest price. Take a little time and thought here because one day you may wish you hadn’t been rushed over it. Growth businesses need to clearly understand where it can all go wrong and not just think cause it’s all going well at the moment , it will continue to go well. Construct a plan to protect against the downside. As a result you will have the confidence to continue to push on and take risks knowing that your back is protected.

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