Contents Insurance for Your Business

If you run a business one of your biggest concerns will be your business property.

Unfortunately many a small businessman has been awoken at night by intruders in his shop below or by the remote office premises alarm phoning his mobile at four in the morning.

As a business person your property will always be at risk. Fortunately business property contents insurance is available which will cover all risks to which an enterprise large or small, may be exposed. This insurance cover is available either to business property tenants or lease-holders or to owner occupiers who keep business contents at the premises.

One of the largest risks to business property is from theft and in particular the business property contents.

Thieves though rarely known to steal buildings but regularly attack commercial premises for the contents.

Consequently, a business contents insurance policy will be rated for theft on two major counts.

Primarily the location of the building where the contents are kept. If you run your business in a high risk theft area as defined by the insurance company statistics, then you pay a lot more to protect your business possessions.

Secondly the cost of covering your businesses tangible assets is determined by the value of the property kept at the business premises. If you keep stock or equipment that is considered a high risk for theft, then the premiums quoted will reflect this.

High risk stock items include goods which are easily portable and can be resold for cash, including audio, video and television equipment, cigarettes, cigars and tobacco, designer clothing, computers and digital equipment and software, computer games, drugs, pharmaceuticals and medicines, precious metals and jewellery, mobiles, telephones and radios, cameras, photographic equipment, power tools,DVDs, CDs, trophies, wines, alcohol and spirits. If your business premises contains any of these items you will need to calculate the total value of each when applying for cover.

All content insurance polices for commercial insurance will ask you to declare the replacement value of all the goods on the property. Usually the total value is divided into sums insured, in separate sections for business equipment like tables and chairs, computer equipment, electrical equipment, filing and data, business stock, high risk stock, machinery and all other property.

Many small business insurance policies provide provision for contents insurance for all types of buildings and businesses, however some for some risks the policy may be issued subject to conditional clauses.

Depending upon the location of the premises a business insurer may well impose tough restrictions as to the storage and security of the property and its contents. This may include approved alarms, CCTV, security patrols, window grills and bars, and certain types of locks, all of which will also help to keep the premium costs down as they attract large discounts if fitted.

Business contents insurance policies also contain provision for all material damage and loss caused by a long list of perils, including fire and flood. Some companies may put restrictions upon the policy if your business postcode is in a known flood risk area.

Contents insurance for small business is usually sold as a package offering all risks cover for a particular property type. Cover is widely available from numerous online insurance company offerings and price comparison sites. Typical small business contents insurance packages are available online for shops, office, pubs, hotels, restaurants, surgeries and most home based businesses.

Contents insurance packages for small business usually include a range of additional or optional covers which protect the contents from other risks. One such cover is Business interruption insurance which protects gross profits of the company if the stock or contents are destroyed. Another frequently available is Goods in transit cover which protects a businesses goods and contents away from the premises, in transit either to or from the place of work or delivery

Larger enterprises with multiple risk addresses and high value contents will need to seek the services of a business insurance broker who can advise on the appropriate covers required for the enterprise.

In such a case business contents insurance would be covered under what is known as a Combined Commercial insurance policy. These polices are available for all business types who do not fit a package policy and require contents insurance.

Alternative Sources of Business Growth Finance: There Is More Than One Way to Fund Growth

Talk to any business owner or read the business section of any newspaper and you're likely to come across stories of struggles to access sufficient finance to grow or maintain their business. But we are beginning to witness a change in how business owners access finance with many now actively seeking out alternative sources.

A survey carried out by the UK's Forum of Private Business found that 26% of businesses were hunting out alternative financial products, with 21% seeking them outside of the traditional main High Street lenders. In fact, in another survey undertaken by the Federation of Small Businesses, it was discovered that only 35% of respondents used a traditional overdraft facility in 2011.

So, if banks are continually reluctant to lend to all but the lowest risk businesses, how can the remainder of the UK's business population finance growth? Here are some of the increasingly popular alternative sources of finance to investigate.

Better Management of Working Capital

This may appear to be an odd source of finance but very often businesses are sitting on undiscovered cash reserves which can be used to finance growth. A report issued by Deloitte in 2011 revealed that the UK's largest businesses were sitting on £60 billion of unproductive working capital. Inefficiencies in how working capital (debtors, stock and creditors) is handled can unnecessarily tie up your cash. Cash can be unlocked and released back in to the system thereby allowing self-financed growth plans by taking a close look at credit procedures, how credit terms are granted and how outstanding payments are chased.

Ensuring that stock is kept at an optimum level via better inventory management is another area where cash can be released to support and finance growth. Take a good look at your inventory management process and identify areas where cash is trapped.

Good management of working capital is not just about better control of debtors and stock, it is also about maximising the terms given by creditors. Are you too eager to maintain a first class relationship with your suppliers by paying well before the due date? You can positively impact your cash position by taking full advantage of terms offered by your suppliers. Have you fully leveraged your position by seeking an extensive of terms from say 30 days to 45 days?

Being more efficient in how working capital is managed can release sufficient funds to self-finance growth plans.

Personal Resources

With traditional avenues of funding being more difficult to access business owners are now looking to their personal resources to fund growth. Whether it be drawing on cash savings, using personal credit cards or taking additional mortgages on residential properties, such sources are an instant solution. A survey by the Federation of Small Businesses found that 33% of respondents had utilised their savings to fund growth. As well as being more immediately accessible using personal resources is often a cheaper source of finance.

Family and Friends

Sometimes referred to as the three F's - family, friends and fools - this can appear to be a less stressful way of raising finance. In some ways it can but it can also be a journey fraught with danger. Tapping into their personal network business owners source finance by either seeking a loan and offering to pay an interest rate higher than that on offer on a High Street savings account, or offering a slice of equity in the business in return for investment.

Raising finance in this way can be relatively easy because the request and fulfilment is very much based on personal trust. Typically a Business Plan would be presented highlighting both the investment opportunity and the risks but at the end of the day success is down to the depth of the relationship and level of trust.

The danger in raising funds this way is that the nature of the relationship will change from that of a personal nature to a business transaction. Failure to regularly pay as per agreed terms, or even total failure to pay, can irreparably damage the relationship so tread with care.

Asset Finance

The Asset Finance industry is based on the concept of either preserving cash or speeding up access to it. Asset finance, which consists of invoice discounting, factoring and funding of asset purchases, has been available as a source of finance for many years, yet it's only now gaining more recognition. Figures released by the Asset Based Finance Association, a trade association representing the industry, show that to the third quarter of 2011 the amount financed by the Association's members increased by 9% compared to the same period in the previous year. Whilst the increase may not seem significant it is against the backdrop of a fall in traditional bank lending.

In a world where 'cash is king' asset financiers help preserve cash by financing the purchase of assets such as vehicles, machinery and equipment. Because the financier is looking to the underlying asset as security there is usually no requirement for additional collateral. According to the Asset Finance and Leasing Association one in three UK businesses that have external finance now utilise asset finance.

Asset financiers can help speed up the flow of cash within a business by allowing quicker access to cash tied up in the debtor book. An invoice discounting and factoring facility gives businesses the ability to immediately access up to 80% of an invoice instead of waiting for the agreed credit terms to run their course. Such finance facilities will speed up the velocity of cash within the business thereby allowing the business to fund a high rate of growth.

New players such as Market Invoice are entering the market to allow businesses to raise finance against selected invoices. Tapping into high net worth individuals and funds Market Invoice acts as an auction house with funders 'bidding' to advance against certain invoices.

Crowfunding and Peer-to-Peer

A relatively new phenomenon is the concept of raising finance by tapping into the power of the crowd. The historically low rates of interest payable on savings have led to depositors seeking out new ways to increase their returns. With business owners struggling to raise the funding they need it's only natural that a market would be created to bring these two parties together.

CrowdCube entered the market in 2010 to match private investors seeking to be Dragons with those businesses looking to raise capital. Once a business passes the initial review stage their proposal is posted on the site and potential investors indicate the level of investment they wish to make with the minimum amount being as low as £10.

Businesses looking for a more traditional loan should consider Funding Circle. Established in 2010 Funding Circle also matches individual investors looking for a better return with those businesses seeking additional finance. Businesses can apply for funding between £5,000 and £250,000 for a period of 1, 3 or 5 years. As a minimum the business has to have submitted two years Accounts with Companies House and be assessed in order to arrive at a risk rating which guides potential investors.

As the crowd sourcing concept matures we are likely to see more players enter this market to capitalise on the need for better investor returns and easier access to business finance.

There is More Than One Way to Fund Growth

Accessing finance to fund growth plans does not have to be difficult if you are prepared to seek out alternative providers. Funding growth is now no longer the exclusive preserve of the traditional High Street bank and it's now down to business owners to seek out the alternative routes.

Why Execution Matters in Your Business

Depending on the information source and definition of "business failure", anywhere from 80% to 95% of businesses fail within five years of startup. Millions of aspiring business owners have a vision for their business. Plenty of people have great ideas for changing the world, or at least their target market. The businesses that last longer than five years do not always have the the most successful vision, but they do understand how to execute better than their competitors.

Execution combines careful planning, clear focus, and persistence to breathe life into the ideas and dreams drawn up on cocktail napkins and whiteboards around the world. Execution certainly is not easy. In their classic book "Execution - The Discipline of Getting Things Done", authors Larry Bossidy and Ram Charan stress how execution is the most critical role of business leadership. Where should business owners and leaders start when focusing on execution? Here are several tips to start your journey.

Identify your target market and ideal customer - Many businesses start with the owner's dream of serving a particular niche or market segment. The execution needed to find your target market involves careful research and clear communication of your value proposition. How will your business be remarkable? What makes your business different than your competitors? What behaviors and characteristics define your target market, and how can your business satisfy a need or reduce the pain this target market and ideal customer feels? Many small businesses fail because they try to be all things to all people. Instead of creating a product or service that serves a niche incredibly well, a business will make a "good enough" product that really is never good enough. As podcast consultant Cliff Ravenscraft of http://www.gspn.tv says, "Become great at one thing."

Communicate your brand consistently - Dreamland Productions owner and Free Agent Academy branding professor Jimi Gibson summarizes a brand in this way: "A brand is the sum of all experiences your customers have with your business." If that definition is true, that means every customer touch point communicates your brand. You must execute a brand strategy to consistently deliver the same message and experience to your customers. What do your company colors and logo communicate to your target market? How do you deal with customers' problems? How are you overdelivering to create additional value for your brand? Does your marketing and media strategy communicate the message you want to convey, or are you confusing your customers? Brands take years to build but hours to destroy. Toyota provides a chilling reminder of how quickly a brand can be destroyed.

Develop a consistent delivery process - All successful businesses deliver a product or service with a value greater than the price paid by the customer. The companies that execute well know how to deliver their value consistently. These companies develop procedures and systems to help employees act in a consistent manner. They train their employees to think for themselves and solve problems quickly. They stress the vital few factors on which all employees must focus to deliver what the customer demands. They empower their employees to critically evaluate every step to find new and better ways of doing the work.

Help all employees know how their work impacts the company's success - Company strategy and financial results should not be the property of a select group of managers. All employees should know why their work is important and how it impacts the company's profitability. Administrative employees must understand how their work improves efficiency and product quality. Financial analysts should understand how the information they provide improves resource allocation. All employees must play an important role to make a company execute well, and they should understand why their work contributes to the bottom line.

General George Patton once said, "A good plan violently executed now is better than a perfect plan executed next week." Many businesses spend too much time planning and not enough time executing their plans. Drawing plans on cocktail napkins is a fun way to exercise creativity, but real businesses understand that a vision must translate into excellent results. Execution is the bridge between the dreams of owners and the success ultimately realized by delivering value to your target market.