Business and Investment sidenote

Insurance is a part of business expenditure. Insurance play a significant role when the business is an at home enterprise or small business and, insurance premiums can increase by as much as 30% in a year.

Every small business owner needs insurance to protect his or her interests. The internet is a valuable resource that will serve as a guide to business owners and help them determine their insurance needs and ways in which to get the most comprehensive small business insurance coverage. As a small business owner it is important to make informed decisions about business insurance.

Instead of struggling to pay business insurance premiums you need to find ways to reduce intelligently your business insurance costs.

1. Educate yourself on aspects of business insurance and study your coverage to determine where you can make savings. Think about aspects like higher deductibles or umbrella insurance coverage.

2. Many professional organizations and associations strike deals with insurance companies for group rates. Find out whether the Chamber of Commerce or other organization of which you have a membership has insurance plans on offer at competitive rates. Determine costs of membership of such organizations against benefits on insurance and other business related aspects.

3. Study your business organization and find out ways in which you could reduce insurance costs. Often simple methods like regular machinery maintenance, installation of alarm /security systems, enrolling fleet drivers in defensive driving courses and so on can reduce your insurance liability.

4. Know what insurers consider as risks in your line of business and find ways to reduce/eliminate risks. Business insurance premiums are based on risk calculations among other aspects.

5. Study insurance norms and find out how business liability premiums are calculated. Often changing the location of your business or warehouse can reduce premiums.

6. Buy small business insurance from reliable insurance companies by doing a comparison of costs and products. Online insurance websites have tools that provide multiple quotes and enable instantaneous comparison of business insurance costs and coverage.

7. Check with the insurance company about business insurance packages. Many leaders in the field offer a business insurance policy that combines property, liability, loss of income, records insurance policies, business vehicle insurance and more.

Before insuring your business check your options with organizations like the Better Business Bureau and SOHO which offer business insurance discounts. Also check what the laws are regarding business insurance. In case of doubt, check out options with an insurance agent.

Every small business owner will need: property insurance; contents insurance; liability insurance and employee benefit plans; disability insurance; business interruption insurance, buy-sell insurance; and key person insurance.

Firstly, what do I mean by a financial goal? For most of us, that would generally be a goal to either increase income or reduce consumer debt. Of course there may be times in our lives where we want to increase consumer debt to acquire goods and services sooner or to reduce our income as a trade off to have more time but in this article, let’s set those situations aside. In particular, let’s look at the scenario of reducing consumer debt by 50% in six months.

My standard formula for goal setting is to select a coach, have the required resources in place and to have a plan-A and a plan-B in place so let’s see how a financial goal fits in with this.

Selecting a financial coach these days is difficult indeed. Most financial advisors will only try to sell you products, thereby limiting their own risk in a highly litigious environment. If your goal is to reduce your personal debt by 50% in 6 months the financial advisor might be dismissive if there is no chance of selling a product into your situation.

Similarly, a debt financer will try and sell you a product that appears to reduce your debt but in fact does very little. Finally there are educators, who provide information but are prohibited by law to give financial advice. While they can give illustrations or tell you what they did, they cannot specifically advise you what to do and therefore cannot really be your coach.

I am aware, however, of some wealth creation companies that provide ‘integrated’ solutions providing all of the required professionals in a single meeting. By nature, however, the cost of this service is out of reach of many. One solution might be to use self-help websites and software to help resolve this situation, in conjunction with education and perhaps a visit to a financial advisor if necessary.

What resources do you need to reduce personal debt? Well first of all, you must be able to measure and control what you are spending. Yes, I am talking about the dreaded budget. With internet banking and plastic cards, it is relatively easy to download transactions from all of your banks and put them into a spreadsheet. I believe that the most important tool, however, is the banking system itself. With high interest-earning no-fee accounts available it is possible to use the banking system and the utilities to do a lot of the budget accounting for you.

The Plan-A is what you will do if you are on track to achieve your goal. Is there some kind of reward for achieving your goal? Clearly to reduce personal debt, you must have a system to control what you spend, so at a minimum a separate card account and bills account but more likely around 9 high interest no fee accounts and one card account per partner, preferably a debit card (or secured credit card).

The Plan-B is to identify the biggest risk and what to do if it happens. If, for example, you think that your car might need $1,000 of repairs but you can’t set aside that much money over the next 6 months, what will you do? Will you change the deadline, or cut costs in other areas? Can you do without a car?

Finally, tracking a financial goal and measuring the level of success is straight-forward when you have the right tools in place, such as internet banking.