If there is one lesson that any natural disaster, such as the earthquake in Japan, should teach a business owner, is that one must be prepared for anything. The reach of problems caused by the earthquake has hit this country, and I am not talking about radiation.
Rather, the earthquake damage has hit the supply chain. Businesses in the U.S. that rely on parts from Japan have had to reduce or cease operations. It affects you as a mortgage originator because the laid-off workers are your clients.
But there are also times when something causes physical damage to your offices.
A Farmington, Conn.-based insurance agency, Bolt, which specializes in small businesses, suggests that besides filing your statements with the Internal Revenue Service, tax time is also the most convenient time of year for owners to review and ensure that they are sufficiently protected.
"We've found that although smart small business owners do an annual review of their business objectives and progress, many don't give that same time and attention to items that can potentially destroy what they've built," said Tom Hammond, EVP at Bolt.
"Tax time presents a perfect opportunity for owners to take a look at risk and disaster management plans and insurance coverage, to ensure the business is properly protected. Unfortunately, in lieu of an annual review, many owners leave their small businesses, and themselves, at risk only paying attention after it's too late."
As part of this annual review, owners should evaluate whether additional coverage is necessary as a result of business growth in 2010 and whether they have the correct amount of insurance coverage based on2011 projected numbers. In addition to insurance, small business owners should also review landlord requirements, client or customer requirements and local or state requirements on an annual basis.
Bolt said all small business owners are risk managers for their own firms. It recently released a free 19-page guide titled "Risk Management for Small Business Owners." The report discusses important issues including the three types of risks and what they are, why it's important to identify small business exposures and how best to do that, managing risks and the importance of limiting exposure, risk retention, transferring risk and creating a risk management plan.
The ultimate goal of the report is to help small business owners understand the importance of risk management in running their business and how to identify and manage the risks, known and unknown, around them. By managing risk, they are more prepared for situations that can negatively affect their business and their financial goals
The full, complementary report can be found at
