Small business is important to America and working with your independent agent is now more important than ever.
The other day my 11-year-old daughter came to me and said, “Dad, I’m doing a report on the U.S. economy, and did you know that 99% of the U.S. businesses are small businesses and that there are 31 million small businesses in America”?
This gave me goosebumps for two reasons: as a guy that geeks out over business, I was one proud daddy that my daughter showed interest in the economy at the ripe old age of 11; and secondly, I was shocked at the statistics and had to immediately go look them up for verification.
According to the SBA (US Small Business Administration’s Office of Advocacy), small business is defined as firms with fewer than 500 employees and there are 31.7 million small businesses in America and 99.9% of all U.S. businesses are small businesses. Goosebumps again because she was right!
Here are a few other facts that demonstrate the importance of small business in America:
- Small businesses employed 60.6 million people.
- Small businesses make up 47.1% of United States employees.
- There are 5.2 million self-employed minorities.
It’s clear that Small business is big business in America and yet we hear stories of how many small businesses are struggling to make ends meet. Small Business owners are being forced to work on increasingly narrow margins by trying to stay competitive with big box stores, finding and retaining employees, and keeping up with Technology demands to name just a few. Now, with the onslaught of damaging events in 2020, businesses are being forced to cut back on staff, eliminate services and product offerings, comply with social distancing regulations, and survive revenue hits from forced shutdowns. The current conditions in the small business sector are not pretty.
As a Risk Advisor for many small businesses, I hear story after story about the need to desperately cut costs to keep their doors open during these challenging times.
However, as difficult as it is, we need to be careful about how we are cutting costs and what costs we are trying to cut. Too often small business owners look to their insurance coverage as a place to cut their costs by lowering limits or even removing coverages entirely. This is comparable to free climbing El Capitan with no ropes. Unless you are Emily Harrington, I wouldn’t advise it.
The world is throwing everything it can at us and we all need help. By sitting down with your local agent/broker and discussing ways to reduce cost without sacrificing coverage. Below is a list of five things you can review with your agent/broker to reduce costs on your insurance program without exposing your entire business to financial ruin:
- Deductible Arrangements
- Property and Auto Schedules
- Claims Costs
- Workers’ Compensation Classifications
- Policy Fees, Broker Fees, and Agent Fees
In reviewing the shortlist above, you can find ways to reduce insurance costs that are both safe and impactful on your bottom line. However, please reach out to me or anyone at Relion Insurance for a deeper dive into how we reduce your total cost of risk through our unique and customized process for maximum impact.
So, let’s keep Small Business America thriving by working with your local Independent agent as we grind through the world’s challenges and look forward to a brighter more prosperous future!
Thanks for reading!
Brad Hodapp, CWCA, CRIS
Relion Insurance Solutions