It is undoubtedly a complex and uncertain time right now for small business leaders. Current economic trends and broad environmental perils demand a thoughtful approach to navigate today’s challenges. Small businesses face risks ranging from managing cash flow in inflationary and rising-rate environments to shifts in the labor market. While the uncertainties are certainly taxing, […]
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It is undoubtedly a complex and uncertain time right now for small business leaders.
Current economic trends and broad environmental perils demand a thoughtful approach to navigate today’s challenges. Small businesses face risks ranging from managing cash flow in inflationary and rising-rate environments to shifts in the labor market.
While the uncertainties are certainly taxing, you have many tools and resources at your disposal. As outlined during a recent webinar hosted by The Travelers Institute, the public policy division of The Travelers Cos. Inc., there are key areas where you can be proactive in controlling risks and navigating uncertain times.
Manage your finances — While inflation continues to moderate overall, a deeper dive into the data shows service-sector inflation remains problematic. This period of high inflation is making it more expensive, and in some cases more difficult, to borrow money.
That means it could be harder for you as a small business owner to access capital to run your business. Know your costs and stay disciplined in budgeting.
Proper insurance protection — Work with your insurance agent to help ensure you have proper and necessary insurance coverage, which can help mitigate unexpected costs at an inopportune time.
An estimated 22% of small businesses are uninsured, according to ISO. If you own property, make sure values are adequate and up to date.
And don’t forget about the contents of your property. Make sure appropriate liability limits are in place and consider adding umbrella coverage.
Also, evaluate the need for professional liability coverage. In the unlikely event of a loss, you’d have full coverage for any scenario.
Focus on risk management — Effective risk management can be integral to helping you reduce risk and prepare for and recover more quickly from an event. You don’t need to be a risk-management expert, or have one on staff to be ready.
Some insurance providers and other organizations provide tools and resources online that can help.
Cybersecurity — Cybersecurity risks continue to evolve and pose significant threats to businesses of all sizes and across all industries.
It only takes one cyberattack or data security breach to potentially put you out of business. Take advantage of any tools made available by your insurance provider or other cybersecurity groups you work with to protect potentially vulnerable systems.
Ensuring proper cyber insurance coverage and properly protecting data are paramount to navigating this changing technology risk.
Safety culture — There has been a shift in the labor market in recent years, and employment growth remains concentrated in a few sectors. That means a lot of employees are switching industries, leading to many new hires having less experience in their latest jobs.
New employees can mean a higher number of workplace-related injuries. According to Travelers’ 2023 Injury Impact Report, more than 40% of small business workers’ compensation claims are from first-year employees, making up 43% of all small business workers’ compensation claims costs.
The average number of days a small business employee misses due to a workplace injury is 79 across all industries, which translates to lost productivity for businesses.
Mitigate these risks through proper onboarding and training and instituting safety management programs to help prevent workplace injuries.
Overall, make sure to identify potential risks before they become problems that could put you out of business.
Taking the right steps to help ensure you are protected in an uncertain environment will enable you to navigate these uncertain times with confidence.
Erin Rodliff is senior vice president of small commercial underwriting and product at Travelers Cos.
