Insurance Insights

As you know, social media isn’t just a popularity tool or a way to connect with friends and family — at least not anymore. Businesses, large and small alike, are using social media as a tool to generate leads, increase their customer base, create customer loyalty, and increase profits.

There’s a new source of small business financing in town. It’s called peer-to-peer loans, sometimes called person-to-person lending, peer-to-peer lending, or P2P lending. Whichever name you choose to use, it’s a new breed of financing whereby individuals, or groups of individuals, make loans to other entrepreneurs  throughout the United States. In a nutshell, individuals use a peer-to-peer lending platform to make “microloans” to finance entrepreneurial venture. Entrepreneurs and small businesses across the U.S. and globe are using peer-to-peer loans to grow and prosper.

While there are some glimpse of improvement in the economy, truth be told, many small business owners are still trying to make ends meet and keep their business afloat while the economy slowly recovers. At the same time, consumers are feeling the crunch too. So passing along rising costs to the customer seems like a no win situation. So how do you increase prices without harming your small business? There are a few ways.

1) Provide an advance notice. Create a letter letting customers know that prices are holding steady for now, but in 60 days they will be going up. Giving your customers advance warning shows a degree of respect, and softens the blow when you actually do raise your prices. Make sure the letter is transparent, conveys the reason for the price increase (inflation, cost of supplies, etc.), and has a positive feel.

2) Add service tiers. If you are in the service business, such as a beauty salon or computer consultant firm, consider breaking up your services into layers, or tiers. While you may keep the basic rate the same, you can add additional costs for extra benefits. For instance, you might charge a higher rate for 24-hour appointments or faster turnaround times.

3) Raise rates incrementally. If you financial advisor is telling you that you need to raise your prices 20 percent to make a decent profit, and you put a 20 percent price hike in place all at once, you’re surely going to lose customers. Instead, raise prices in increments at five percent at a time, for example,  in order to retain more customers.

4) Add value when raising prices. People often make buying decisions based upon the expected value they’ll receive for their spent money. Consumers love getting value for their money, so if you must raise prices consider adding an extra bonus. For instance, a beauty salon owner can add a free bangs cut or eyebrow wax for every third haircut. While this may seem like a free service, when combined with a price increase, you’ll likely still boost your hourly rate. Other ways to add value include adding guarantees, repeat purchase incentives, or faster shipping.

5) Test the price increase with a small random sample. Before implementing a full-scale price increase across your entire customer base, test your price increase on a smaller group to see the reaction.

No small business owner can be expected to be an expert in everything, so hiring a contractor for your small business is common practice. After all, contractors offer specialized services, tax savings, reduced overhead, and eliminate pricey costs for health benefits. However, before establishing that contract, there are a few up-front questions to ask a potential new contractor for your small business:

1) How much experience do you have? Choose a contractor with a proven track record. If the work that your contractor will be performing for you is tangible, ask to see samples.

2) Are you licensed? If the contractor runs a business, most every state requires the business to have a license. From an electrician to a beauty salon hairdresser, many professions also require a license in order to demonstrate expertise in the field. Be sure to ask your contractor-for-hire for a copy of his general or profession-specific business license.

3) Are you insured? At a minimum, contractors should have a personal liability policy, and you should be able to obtain a Certification of Insurance for verification. Depending on the specific work of the contractor, you may require additional insurance, such as property insurance.

4) What payment methods do you accept? If hiring a potential new contractor for your small business for a long-term project, one of the best ways to keep him from disappearing before the work is complete is to pay incremental payments for key progress milestones.

Up to 80 percent of security information breaches can be traced back to weak passwords or poor password protection, according to the University of Miami.
In today’s modern society, just about everything is password protected. In fact, you probably have more passwords than you have socks. Coming up with multiple passwords that are both safe and easy to recall is no easy task. However, the better your password protection policies are, the less likely you or your staff’s passwords will be cracked.
To increase the protection of your passwords, follow these password protection best practices:

According to the University of New Hampshire Center for Venture Research, angel investors provided an average investment of $338,400 to over 26,000 start-up small businesses during the first six months of 2011. That’s not chump change when you’re talking about a small business start up, so after hearing that statistic you’re probably wondering what are angel investors and how do I find them?

The U.S. Chamber of Commerce estimates that 30 percent of small businesses fail because of employee theft,  three-quarters of all employees steal one time, and over 35 percent of those employees steal more than once, reports Human Resources Executives Online.  Employee theft isn’t just the stealing of paperclips, Post-It notes, and other office supplies, stealing company time, confidential information, and company merchandise all all areas that fall under the employee theft and fraud umbrella.

Overpaying shipping costs when mailing packages to customers can mean reduced profits for a small business. Hefty shipping costs can also result in lost customer sales because of a customer (or customers) choosing to go elsewhere for an item. Having a cost-effective delivery system to customers can make or break a sale, so it’s important for the small-business owner to understand the shipping world and do what she can to minimize shipping costs to customers.

Few small businesses today can operate without extending credit to customers.  But along with allowing your customers to “buy now, pay later” comes the risk of late payment or even non-payment. This risk is compounded by the very nature of small businesses, which can be informal and have fewer staff to implement checks and balances.

Risk identification, assessment, prioritization, and mitigation — collectively referred to as risk management — are all important steps in protecting your business, your workers, and complying with the law. Risk management is a complex process that not only involves evaluating resource risks, technology risks, and business risks, but also taking steps to minimize said risks.