How to Protect Your Business Against the Unforeseeable
To an eye doctor, 20/20 translates into perfect vision, the ability to focus equally well on what’s close at hand and what’s far away. As a year, however, 2020 has meant anything but certainty and precise vision.
By early March, most of us realized we were headed for unprecedented changes that no prescription glasses could put into focus. For some, it was time to put their business continuity plans to a real-life test, while others scrambled to work up contingency plans to solve new problems. There may not have been a leader in the industry predicting a virus like COVID-19 would change things as fast as it did, but many business continuity plans still came through and worked. For others, now is the time to start making defensive moves and preparing for future uncertainty.
There are steps you can take today to set up your business for the long-term, position it for growth, and be prepared defensively against the risks you and your organization face. Many of these moves can be made right now to mitigate the effects of the uncertainty which has become the new norm. The old saying, “the best time to plant a tree was ten years ago, and the second-best time is today,” has never been more true. Here are four steps the defensive organization can begin working on today.
Consider Hiring a Credit Insurance Company
With bankruptcies rising and more predicted on the horizon, it has never been more important to diversify your client base. While credit insurance is part of every insurance pre-renewal discussion and can protect you from a client who cannot pay, there is an often-overlooked defensive technique to hiring a credit insurance company. Utilizing the firm will give you access to best-in-class credit resources and act as your credit department, saving you man hours and giving you top-notch resources. This will also let you know which opportunities are worth extending credit to and which ones are too risky for your tolerance. Think, if credit weren’t a concern, how much more would you be able to sell?
Include Cyber Protection
Paycheck Protection Program (PPP) loans are part of the federal CARES Act and provide many companies with a lifeline and a means of avoiding business interruption. To provide transparency, the government has made the recipients of these loans and the amounts secured open to the public. This also gives cyber criminals the information they need to take advantage of plants fighting to keep their doors open. These criminals are often incredibly sophisticated. They monitor data to copy the way their target writes, and they learn their target’s schedule, making messages appear legitimate.
To avoid this, put a policy in place to ensure there is a callback provision on any electronic orders to move bank account numbers or transfer money. In addition, ensure you have a cyber policy which covers “social engineering” among other common attacks. Make sure a manufacturing cyber expert puts your policy together.
Put a Pre-Renewal Game Plan in Place Now
Many factors continue to have an impact as insurance markets begin to harden. This will undoubtedly result in higher rates and terms that are less favorable for insurance buyers. Your pre-renewal strategy meeting and annual meetings with your underwriters need to plan for the hard market and position you as a best-in-class risk. You want to ensure there are no surprises as you forecast.
Reconsider 2020 Payroll and Revenue Projections
To have an immediate impact on cash flow—look to your insurance policy. At the beginning of the year, many companies estimate their payroll and revenue based on projections which have likely changed since renewal. If your broker has not called to see if you have over-forecasted, be sure to call them. Re-estimating your anticipated payroll and revenue can realize savings now when you need it most.
While 2020 has been a year for the history books, successful entrepreneurs build their business by adding value and solving complex problems. By applying that same day-to-day ingenuity, forethought and use of available tools to your business protection plan, you will undoubtedly navigate this crisis and position yourself for the brighter future we’re all ready to see.
This article originally appeared on www.finishandcoating.com
For more information, please contact me directly or learn more on our COVID-19 Resource Center.
Risk Strategist, Property & Casualty
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