Starting up and running your own business is a rewarding but challenging venture and setting up on the right foot can be tough. Finding the best ways to nurture and protect your new company can seem daunting at first, but there are thankfully plenty of ways to not only get your business running smoothly and efficiently but safely, too.
The first few years of any business’s life are often considered to be the most tumultuous when it comes to finances, which is why we believe that taking time to put protections into place could be the difference between thriving or falling under pressure. From introducing a proper business structure to getting the right insurance policies in place, here are five protections your small business can’t go without.
When it comes to starting and registering a business, you’ll need to have the correct structure in place. Every business will have a preferred or most appropriate structure, and choosing the right one at the start will ensure that you have a secure foothold from the very beginning. The four main business structures in the UK include:
- Sole Trader – The simplest and easiest business form to register, and typically refers to self-employed sole traders, where the business is run by you. You will need to complete self-assessment tax returns, but all other profits remain yours.
- Partnership – A partnership involves two or more owners that agree to share in the profits or losses, as well as the risks, costs, responsibilities and more. These typically work on a self-employed basis and are responsible for any losses or debts, as well as taxes. Each partner will also be responsible for the other.
- Limited Liability Partnership – An LLP works similarly to the previously mentioned partnership, however not all responsibility is equal. With an LLP, it’s expected that the responsibility is limited to the amount they hold or invest in the business. This kind of business must be registered with HMRC and Companies House, and members are required to share the profits and submit personal self-assessment tax returns according to set agreements.
- Limited Company – This is a privately managed company, owned by shareholders and run by directors. It is, in itself, a separate legal entity and therefore separate from the personal legal and financial affairs of the owner(s). The business will retain all profits and be subject to corporation tax, with profits being distributed to shareholders accordingly.
Public Liability Insurance
Public Liability insurance is a policy that, while not legally required in every industry, should definitely be a top consideration for any business not only working with customers and the public, but that operates anywhere the public could or may visit or pass by. It covers you financially against any injury or illness to clients or third parties as a result of your business or while on your business’s property, as well as any damage to their property, whether that’s personal property such as technology or bags, or their home or premises. This insurance policy will provide you with the financial protection and support needed for legal fees, compensation and more, depending on what is required in the case.
Cybercrime is on the rise and as more and more companies rely on digitisation to run their businesses smoothly, it’s more important now than ever before to make sure you’re protected. A single cyber attack could risk your data, your client’s data, funds, your ability to do your job and more, so it’s crucial to make sure that you not only have sufficient cyber security in place but that you are protected in the case of losses incurred during a cyber attack. The law is also growing more and more intent on businesses providing adequate security for their customers, whether that’s storing their information or allowing them to buy online or browse your website. You need to consider everything from secure searching, to secure payments and safe, encrypted methods of storing information like bank details and passwords to ensure their privacy and safety.
Professional Indemnity Insurance
Your business’s reputation is everything and if it’s damaged in any way, you could face significant losses. Professional Indemnity Insurance is designed to protect your business in cases where your products or advice have caused a client harm through either loss of money, loss of reputation, defamation or similar damage. It can provide you with the financial support needed to cover legal defence fees, as well as compensation costs to the claimant in the case of a settlement or ruling. This particular policy is important for any business offering advice to clients, including clerical professions such as accountants, insurance brokers or solicitors, medical professions, health and education professions or construction and design professions. Any business could benefit from this policy, but we can discuss this with you in a quick call to help you decide what’s best for your business.
Trademarks and Copyright
From the designs you use to the name of your business, to the products you sell and beyond, protecting your intellectual property is crucial. If you’ve come up with a unique idea to fill a gap in the market, or are concerned about your product or services being stolen by another company, you could benefit from trademarking or copyrighting your business and its products. This may only be available for certain businesses or ideas, so it’s best to speak with a knowledgeable lawyer or take a deeper look into the options available for your market.
For more information about insurance policies and to protect your business’s finances, we are on hand to help. Simply get in touch with Ashburnham Insurance for advice on freephone 0800 1696137.