I wish I’d thought about business insurance!

By Vicki Stewart

Advice for Entrepreneurs on Planning for the Unexpected

Let’s start by painting a picture. What happened when a winter storm caused high winds and a corporate group pulled out of an outdoor event the day before?

The clients were not keen to travel or attend their event during stormy weather, and they had not pre-paid so were in a strong position to cancel. The entrepreneur involved had arranged limited business insurance for the event but had not prepared policies and terms and conditions for the booking to back up their insurance. Neither party were clear about what they should do. The clients lost confidence that the event could be saved. The entrepreneur had not collected payment for costs in advance, as they assumed the good relationship with their clients would not cause this to be a problem. However, they were left substantially out of pocket, having booked staff and prepared food for the event. These costs still had to be paid for by the entrepreneur.

This was a real case brought to me by one of my coaching clients and we worked together to prepare her outdoor business to be more resilient for future unexpected events like this.

Veteran entrepreneurs have a good reputation in business. We are ‘can do’ people, keen to develop good relationships with clients and go the extra mile. However, we are often too trusting.

Years of secure employment in the high-trust environment of the forces can mean we assume clients will always operate under the same values we have. Sometimes they don’t and that is where careful consideration of your business insurance, strengthened by policies and robust terms and conditions, can save your income.

I run an outdoors training business and support veterans changing careers by training them in outdoors qualifications. This is becoming increasingly popular as people recognise the value of the outdoors in optimising

our mental health. I’m also a volunteer X-forces business mentor as I want to pass on my experience to others. Veterans work well in outdoors industries because they are resilient, practical people – running an outdoorsrelated business is a natural move for many. However, many businesses suffer from not thinking through their business insurance when it comes to unforeseen circumstances. Working outdoors, we also have to manage the natural environment, which is affected by the weather and uncontrollable elements, and we have to prepare our clients for Plan B.

There are three things I’d recommend doing to prepare your business for unexpected events, when you really need your insurance to back you up:

• Carrying out an assessment of your needs • Finding the right insurer • Creating clear booking terms and conditions

ASSESSING YOUR NEEDS

Before looking for insurers or paying an insurance broker to work for you, you can carry out a lot of the assessment work yourself, which will cut costs and allow you space and time to think through all of the details.

To find the right insurance, you’ll need a risk management assessment and a list of the activities you will need to be insured for. Don’t be tempted to miss out any aspect of your activities, such as overnight events, as you risk losing your insurance cover.

Your risk management assessment might look like this:

Step 1: A list of potential events that could lead to a loss In the outdoors industry, this will include weather-related circumstances as well as staff absence, resourcing issues, and accidents/near misses. A good example of this could be the storm-affected event described above. Can you ensure you have an alternative venue/resource provider/power provider/freelance staff contacts if you need to go to change your plans in an emergency?

Step 2: Determine the costs that could lead to a loss You need to factor in your own time in negotiating the event, planning and preparation, insurance, resources, rent, staffing, and profit. If you have to reschedule the event, you will want to consider the potential loss of trading on that day. Perhaps the event was to be during your quiet season and the rescheduled event will now need to take place in a busier, more popular period, meaning the loss of a more lucrative booking.

Step 3: Determine how best to address each risk With a good client relationship, you may be able to reschedule the event and this can help retain the long-term relationship with your customer, which will keep them loyal to you and they are more likely to recommend you to others. It is predicted that acquiring new customers can cost five times more than retaining existing customers.1 This expenditure will occur through your marketing and personal efforts and time engaging with potential clients before they convert to actual clients. Therefore, it is worth considering all options to mitigate risks to ensure your events are resilient against the unexpected events you listed in Step 1. A good relationship with clients cuts both ways. Responsible clients will be happy to ensure costs are paid in the form of a deposit before the event occurs so that you are not out of pocket, even if you ask for the remainder of the payment after the event. It is not a good idea to pass the costs of cancellation onto your own staff or suppliers, as you rely on them to support you in your business.

FINDING THE RIGHT INSURER

Now that you have a list of your activities, and a risk management assessment, you can find the right insurer to cover your needs.

VICKI STEWART BRIGHTWOOD TRAINING

Good client relationships are built on trust. The clearer you can be right from the outset of your event planning, the more confident both of you will be about what to do in the event of unforeseen circumstances!

There are insurers who specialise in each type of business and it is worth using one that has knowledge of your type of work, as they will understand the best type of cover for you, ask the right questions to ensure you are covered for all of your activities, and be up to date with events in your industry (legal cases and accidents), which change the nature of the cover you need.

Recommendations from your contacts in the industry you are involved with are invaluable. Additionally, if you are a member of a professional body, you can usually get discounts from some insurers. Insurers who work with professional membership bodies, such as the Institute for Outdoor Learning, will have up-to-date knowledge of insurance issues and should be able to offer you good advice in case you need to make a claim.

CREATING CLEAR TERMS AND CONDITIONS

The 3-step risk management assessment can now be turned into your booking polices and terms and conditions, so that you and your clients are clear about the payments and processes and what should happen in case of an unexpected event. Good client relationships are built on trust. The clearer you can be right from the outset of your event planning, the more confident both of you will be about what to do in the event of unforeseen circumstances!

About the author Vicki Stewart, Director of Brightwood Training

vickibrightwood@gmail.com www.brightwoodtraining.com BrightwoodForestSchool brightwoodtraining vicki-stewart-ba-hons-ma-22649953 vickibrightwood

Reference 1 www.outboundengine.com/blog/customer-retention-marketingvs-customer-acquisition-marketing