Should Your Business Have Shorter Hours in Summer?

27. July 2015 07:50

sorry we're closed

What genius thought of the 40-hour workweek? Actually, it was Henry Ford, and he did it in response to labor’s dissatisfaction with a six-day, nine-hours-a-day workweek, which makes him quite innovative for his time. Today, however, Americans work on average 260 more hours per year than British workers, 499 more hours per year than French workers, and even 137 more hours per year than Japanese workers, who are known for working long hours.

Are you contemplating offering your staff shorter work hours or a shortened workweek for the summer? According to a report by CNN, small businesses are more likely to offer a flexible workweek for a variety of reasons. Obviously, you need to make sure the new schedule works for your business model and customers, but here are some reasons you might consider it:

  1. Summer is your slowest month. If you know work slows down during the summer months, why not save money on utilities by cutting summer work hours? With energy costs constantly on the rise, you could save a bundle by just turning off the computers and lights and letting people leave early for the day.
  2. More hours does not equal more productivity. Studies show it’s actually engagement that leads to increased productivity, and employees feel more engaged when they are able to “recover” from work stress with time off. Plus, when hours are shorter, employees tend to work faster and focus more to get the work done in the hours provided.
  3. It helps with employee retention. Who wouldn’t want to work for a company that has shorter summer hours? And if your company also pays competitive rates, employee loyalty is almost guaranteed.
  4. Millennials will love it. Because Gen Y (born between 1982 and 2000) is the biggest American generation ever (83.1 million), your small business is most likely hiring a few. According to a new report from Ernst & Young’s Global Generations research, the most important factor millennial workers consider when taking and staying at a job is a flexible work schedule that enables good work-life balance.
  5. You deserve a break, too. Shorter summer hours aren’t just for your employees. If you can spare the time, take shorter summer hours yourself so you can relax, rejuvenate, and clear your head. After all, great ideas are more likely to strike when your head is not filled with the million day-to-day details of running a business. Need more convincing? Read "Why Your Business Needs You to Take a Break."

Rieva Lesonsky is CEO of GrowBiz Media, a media and custom content company focusing on small business and entrepreneurship. Email Rieva at rieva@smallbizdaily.com, follow her on Google+ and Twitter.com/Rieva, and visit her website SmallBizDaily.com to get the scoop on business trends and sign up for Rieva’s free TrendCast reports.

Best Way to Lose Small Business Revenue? Don't Go Mobile

24. July 2015 07:56

women web browsing on a tablet

We've said it before, and we'll say it again: if you haven't optimized your website for mobile, expect your traffic to plummet.

It didn't take long for the effects of Google's latest algorithm, which favors mobile-friendly sites in mobile searches, to ripple across the Internet, and those who didn't heed the warnings are already seeing drops in revenue. VentureBeat reports on the latest Adobe Digital Index Q2 findings, which reveal sites that weren't mobile-ready lost 10 percent of their mobile traffic.

That's especially bad news considering Adobe forecasts mobile web browsing will exceed desktop browsing in about 18 months, which is on par with comScore's earlier prediction that 60 percent of web traffic comes from mobile devices (e.g., smartphones or tablets).

The solution may seem easy enough: just optimize your website for mobile already! But in practice, the switch may be harder for some industries than others.

The Hardest Hit Industries in the Mobile Craze

According to the report, for retailers, mobile shopping sessions pull in half the revenue per visit that desktop shopping sessions do. To make up for lost ground, the report states retailers might need to go above and beyond the typical optimization strategies (e.g., big buttons and mobile-friendly displays). Their platform might also need to incorporate…

  • E-wallets.
  • Camera features.
  • Location-based marketing.

Marketers are having a hard time keeping up, too. For example, the VentureBeat report states a mobile search click is worth 37 percent less than a desktop search click.

But even if you work in an industry that fares better on desktop websites, you can't pretend that the mobile disruption isn't in full swing. So long as you continue to do business online, you have to get your website up to mobile standards, or you'll be left in the dust.

Going Mobile or Getting Gone

If you are one of those rare birds that doesn't have a website yet, well, get on that. You're missing out on opportunities to build your brand, engage prospective clients and customers, and appear in Google search results altogether.

Why does that matter? According to the 2012 Local Consumer Review Survey, 85 percent of consumers use the Internet to find local businesses, and that number is probably even higher today. If your target market can't find you online, chances are they won't find you at all.

But don't despair if you've been dragging your feet on creating a website. Now is a great time to finally take the plunge because most website building templates (e.g., Squarespace) already have built-in mobile optimization.

Of course, your industry will determine the other mobile add-ons that make sense for your website. As we noted above, retailers may need to use other capabilities to ensure mobile sales catch up with desktop sales. But even so, it's better to get half the revenue your ecommerce desktop site usually pulls in than to get no revenue at all because you haven't made your site mobile-ready.

For more tips on going mobile, read "The Online Sales Booster Only 14% of Small Businesses Are Using."

Another Day, Another Worker Classification Lawsuit

23. July 2015 08:04

man cleaning a counter very thoroughly

Worker classification problems have plagued the share economy lately.

First, Uber and Lyft came under legal fire for classifying their drivers as independent contractors rather than employees. California regulators already decided that one Uber driver is in fact an employee and must be compensated accordingly. Now Handy Technologies, an on-demand cleaning company, joins the fray.

According to Business Insider, Handy's employee filed a lawsuit against the company, stating that she should be classified as an employee and is entitled to minimum wages and reimbursed expenses. The report states…

  • The cleaner was often paid less than minimum wage, especially after the cost of cleaning supplies.
  • Handy said its workers make an average of $17 an hour per job, but the cleaner alleges she worked more than 30 hours one week and only made $14.

This case is one of multiple lawsuits against Handy Technologies and seeks class-action status, but the Massachusetts court will decide on that.

Regardless of the outcome, the Handy suit reinforces what the share industry has known for a while: the independent contractor model may offer more flexibility, but it's also a legal minefield that could be full of unexpected expenses.

Lesson Learned: 1099 Compliance Is Harder Than You Think

As Handy and its ilk are discovering, the 1099 business model has many complications. Namely, if you're going to use independent contractors, you have to comply with the laws on how those workers are treated. In short…

  • You can't control the manner in which they do their work.
  • Their work must be supplemental, not the primary function of your business.
  • They must be able to set their own hours and rates.

These classification rules may seem as though they leave room for interpretation, and they do. But where these tech companies keep running into trouble is the second and third point.

For example, would Uber or Handy even exist without their drivers and cleaners? Though these companies may stake their classification defense on the fact that they are tech businesses that simply connect app users to a service, it's safe to say there would be no demand for the app or service without the drivers or cleaners.

Another glitch in the 1099 defense: Uber determines the rate its drivers must accept for the ride, and Handy sets the rate for the cleaning or repair job. Again, a true 1099 worker would be able to give their own rate for the work they do.

Why Worker Classification Is Kind of a Big Deal

If you actually follow the 1099 rules, you would not have much control over the services your business offers. So why do share-based companies insist on using contractors instead of just hiring employees? You already know the answer: it saves them money.

The business doesn't have to pay for a contractor's…

  • Employment taxes.
  • Workers' Compensation Insurance benefits.
  • Overtime.
  • Unemployment insurance.
  • Healthcare insurance (which may be required for companies with 50 or more employees).

But here's where karma comes into play: businesses that misclassify workers as contractors may end up paying for all these expenses and more if they are sued. For example, if the court decides Handy's cleaners are employees, the company may be ordered to pay back taxes and overtime expenses, offer benefits, and reimburse workers for their cleaning expenses.

What's worse, the company could also be fined for not carrying Workers' Compensation Insurance, which employers are required to carry in most states. (See "State Sues Small Business over Workers' Compensation Insurance Violation" for more details.) That's in addition to all its legal expenses, and no commercial liability insurance can help cover the cost of worker classification lawsuits.

All those costs may be enough to sink even successful businesses, so be sure to consultant a lawyer before relying on contractors to fill essential roles.

A New Way for Small Businesses to Cut the Risk of Nonpayment

22. July 2015 07:49

credit report

If you're like many small-business owners or burgeoning entrepreneurs, you've undoubtedly experienced the uncertainty, frustration, and downright desperation that accompany unpaid invoices and late client payments. At first, you try to give them the benefit of the doubt – they have a lot on their plate! – so you write a polite, gently prodding email. But as the weeks drag on without a word or check from the client, you start scrambling. How are you going to pay your bills when your client won't pay theirs?

If your clients keep giving you a literal run for your money, maybe it's time to start vetting them more carefully. It's easier than you think: simply check out their business credit reports.

Manage Nonpayment Risks with Business Credit Reports

Forbes notes that business credit reports have been a staple in the corporate world for a while, but they were too pricy for small-business owners to use as a regular part of their risk management. However, thanks to technology, amassed data, and increased competition, business credit reports are affordable – some credit bureaus even offer subscription-based services so you don't have to pay for reports individually.

What can these reports tell you about prospective clients you might take on? According to Forbes, the reports show you…

  • How many days past the due date a company pays its bills, which can clue you in on what to expect.
  • The number of inquiries made about a particular company – too many could indicate financial trouble.
  • The company's financial obligations and payment history.
  • Any legal judgments, tax liens, or bankruptcies filed against the business.
  • The company's structure, including the management team, directors, and affiliate businesses.
  • The company's credit score and credit limit, which indicate its financial health.

If you have all this information at your fingertips, you won't have to guess about the business's financial behavior or solvency. You can scan the report and have a good idea about whether you'd be taking on a potential nonpaying client.

Make that Money, Honey: How to Put Business Credit Reports to Use

A business credit report may not be a sure indication of payment patterns to come, but they can help you decide which clients you want. Though you may be tempted to take any new business that comes your way – especially when you first start out – turning away risky clients allows you to focus your energy on attracting customers you want to work with. (Related reading: "Make a Better Impression on 88% of Your Potential Clients.")

Business credit reports can also help you plan for how to handle risky clients. For example, if a prospective client has a history of paying a month past the due date, you might…

  • Turn down the new customer.
  • Demand payment upfront.
  • Manage your cash flow in anticipation of the slow-paying customer.

Getting the money you're owed should be at the forefront of your risk management plan – it even outpaces (gasp!) investing in small business insurance. After all, you won't have much time or resources to dedicate to growing and protecting your business if you're always hunting down customer payments.

Plus, if you regularly do business with clients who actually pay you on time, chances are you'll develop a good relationship with them. That can help you earn repeat business and referrals – the holy grails of a thriving business.

The Unusual Way One CA City Helps Small Businesses Mange Risk

21. July 2015 08:05

do not enter sign

In an effort to preserve local character and its small business economy, Sebastopol, a small city in California, has temporarily (and maybe permanently) banned chain stores and drive-thrus, according to a report by ABC 7 News. The report states the moratorium prohibits chain stores for at least 10.5 months and applies to businesses that…

  • Have 10 or more locations.
  • Offer the same menu or products in all branches.
  • Have the same branding throughout the chain.
  • Have a drive-thru.

The report states the freeze doesn't apply to previously approved projects, banks and gas stations, motels and hotels, and businesses smaller than 5,000 square feet that occupy the city's shopping centers.

Supporters state the ban gives the city's homegrown establishments a chance to thrive. The report notes one custom boot maker said the ban is essentially a "small business insurance policy," in that it addresses the risk of big competition running out independent businesses.

It's an interesting point that makes you appreciate just how much location affects your business's ultimate success or failure. After all, where you open your doors also determines the risks you'll face.

How Location Affects Your Risks

You may have noticed that every insurance form always asks where you live and where your business is located. Geographical location plays a key role in how much risk you take on. For example…

  • Businesses in tourist-heavy areas may have more premises liability exposure, thanks to all the foot traffic.
  • Businesses in disaster-prone regions (e.g., in floodplains or along fault lines) may experience disasters that cause extensive property damage.
  • Businesses in densely populated areas have a higher risk of experiencing vandalism and theft.
  • Businesses in remote areas may face more supply-chain interruptions.

This list should make one thing abundantly clear: there's nowhere you can open up shop and be totally insulated from risks. Even in the lowest-crime area without a body of water in sight, you'll still have to interact with the public, which means someone could get injured in your shop or sue you over subpar services. (Good thing there's General Liability and Errors & Omissions Insurance for those exposures!)

And unless you're located in Sebastopol, the competition big businesses pose is something you'll have to contend with, too. However, if you're going to effectively manage risk, these are all eventualities you should weigh before finalizing your location.

Positioning Your Business for Greatness

Perhaps you don't have a lot of freedom as to where you open your business. There are other ways you can ensure you make the most out of your situation. For example, you can…

  1. Do your research. Be sure you're filling a gap in the market, rather than just replicating what's already being offered.
  2. Distinguish your business from the competition. Focus on exemplary customer service, niche expertise, or unique product offerings.
  3. Listen to your target market. Determine what it wants and adjust accordingly.
  4. Offer complementary services or products. Keeping in step with the bigger competition can help you capitalize on the area traffic those businesses attract.
  5. Create a website. Offer visitors an experience or information they can't find elsewhere.

Lastly, make sure you carry adequate small business insurance – these policies can help you stay financially stable even when disasters threaten to derail all you've built. You may not have the financial might of big-box stores, but your insurance helps keep lawsuits and property damage from knocking you out of the running.

Small Business Spotlight: Hiring Summer Help with The Voice of Your Customer

20. July 2015 07:49

VOYC logo

Crystal L. Kendrick is president of The Voice of Your Customer. Located in Cincinnati, OH, The Voice of Your Customer is a marketing firm that helps clients penetrate niche markets using survey research, focus groups, secret shopping, business training, and media campaigns.

We talked with Crystal Kendrick about how her marketing firm partners with the Cincinnati's Youth 2 Work Program to attract interns. She discusses her firm's experience working with interns and how small-business owners can benefit from additional help during the summer. The transcript below has been lightly edited for length and clarity.

So tell us a bit about yourself. What's your background?

I have more than 25 years of global domestic marketing experience, specifically targeting hard-to-reach, underserved, international, and niche populations. I have a BBA in marketing from Temple University and an MBA in business administration from Northern Kentucky University. I successfully completed minority business executive training programs at Dartmouth College and the University of Wisconsin.

When did you first start The Voice of Your Customer? Who's your typical client?

Cincinnati is home to many large, consumer-packaged goods companies and many nationally recognized marketing firms. Unfortunately, many of the larger marketing firms were not able to effectively penetrate diverse audiences. As a result, the firm was founded as a home-based business in 2007 and has experienced tremendous success in the past eight years.

The Voice of Your Customer primarily focuses on engaging diverse audiences in social campaigns and consumer buying decisions. Our clients include government agencies, nonprofit organizations, corporations, and local businesses.

When did you first decide to bring aboard interns? Why?

We engaged our first intern in 2008. As an advocate for our neighborhood and a good corporate citizen of the city, we recruited a teen from our neighborhood who worked with us for many years after her initial assignment.

How do you connect with local nonprofits in Cincinnati to hire interns?

We bring on interns through Cincinnati's Youth 2 Work Program. A consortium of city departments and local nonprofits (e.g., Easter Seals and Urban League), the program recruits, trains, and employs youth during summer through partnering businesses and organizations. Hamilton County Job and Family Services also offers a Summer Youth Employment Program.

We are very fortunate that Cincinnati and most local universities have very well advertised internship programs. Information about these programs can easily be found with a quick Google search.

Why is this program beneficial to your business and your interns?

Our summer interns help to sustain customer service levels during a very busy time of year for our small business. Toward the end of the summer, our interns also provide outreach, telesales, and administrative support to generate sales activity for the fall and winter months. Many of our summer interns continued their work with us into the school year as well. It is a win-win situation for us.

How do you manage and train inexperienced workers?

The nonprofits involved with the program provide job-readiness training, and we offer opportunities for the youth to learn various aspects of our business. Our office manager is responsible for assessing, training, and managing our interns.

Interns are young, and while they may be mature, they are definitely inexperienced and, in some instances, naive. They have never lived without Google or immediate access to everything they need. We spend quite a bit of time teaching them to use office technology effectively and emphasize patience! They learn how to act in an office environment, how to network with others, and how to manage time efficiently.

Have you seen an intern's path in school after working with your business?

Many of our interns stay with us once they return to school. We typically allow our interns to retain their supplies, Microsoft Office, and other online software subscriptions when they leave their assignment. We are thrilled to learn that their grades and engagement improve as a result of their time with The Voice of Your Customer.

How is hiring an intern different than hiring an employee?

The Voice of Your Customer works with interns who participate in programs sponsored by nonprofits, so they typically complete new hire orientations prior to their start date. They are required to complete professional development training each week. These programs make it much easier for a small business to hire and train interns.

Tips for Hiring Interns from The Voice of Your Customer

  • Work with an organization. Partner with a local youth employment project or university internship program to hire an intern or part-time help. They can help handle the paperwork, payroll, and initial training.
  • Offer credit or incentives. Can't afford to pay an intern? Attract prospective interns by offering school credit or a weekly stipend to offset costs.
  • Keep in touch. Communicate with your interns when the summer ends. You can help them network or bring them onto your staff the following summer.

Check out previous posts in our Small Business Spotlight series for more small business success stories and tips.

Could Your Business Use a Boost? Try Looking at Puppies, Says Science

17. July 2015 04:32

tiny adorable puppy so cute omg

Need an excuse to behold the unbearable cuteness of puppies? You can thank Japanese researcher Hiroshi Nittono of Hiroshima University – a couple years ago, his team discovered that looking at photos of baby animals boosts focus and productivity.

Queue the puppy picture parade – it's time to get your productivity on.

Your Brain on Cute

Nittono's study revealed that looking at pictures of puppies markedly improves your mood and work performance. But how?

His team found that after study participants viewed images of ridiculously cute animals (puppies and kittens), performance improved much more than it had after viewing grown animals (dogs and cats). When participants viewed pleasant foods, the images had little effect on their performance.

kitten and puppy

Exhibit A

Though a study from 2011 shows that short web-surfing breaks from work can boost performance because people tend to work better when they have time to refresh, the Hiroshima University researchers may be on to something else entirely. The researchers posit that the cute-work phenomenon may be connected to nurturing instincts. They figure if someone looks at a photo of a tiny animal, their nurturing instincts kick in and increase their attention and focus, which they can pour into their work.

We conducted a very informal experiment where we showed this photo to a few of our team members:

tiny serious Pomeranian so cute

Responses ranged from "fluffy, cute, love, snuggle" and "ADORABLE! SQUEE!" to "bring him inside." Spirits were lifted and workers rejoiced. One employee in particular found a renewed passion for writing about insurance after gazing upon that sweet face.

And there you have it, folks. Puppies are the key to getting more work done.

Working Better, Faster, Stronger, Cuter

This information may seem to have little practical application in the small business workplace, but keep in mind that employee happiness and productivity is pivotal to your business's overall performance. According to a joint study by the Wall Street Journal and the iOpener Institute, happier workers…

  • Help others out 33 percent more than their discontent peers.
  • Achieve their goals 31 percent more often.
  • Are 36 percent more motivated.

An added bonus? A recent study found that happy employees are healthy employees. That means your business benefits from:

  • Reduced absenteeism. The Integrated Benefits Institute found that sick days cost businesses $227 billion in lost productivity.
  • Possibly fewer Workers' Compensation Insurance claims. Employee happiness is essential to any wellness program, and wellness programs improve worker safety. One study showed that wellness contributes to safer workplaces, meaning fewer occupational injuries and subsequent Workers' Comp claims.

To boot, happy employees are also engaged employees – they tend to produce higher caliber work and take better care of your clients.

All this is to say, you really have nothing to lose here. At worst, you and your employees have spent five minutes looking at cute puppies doing cute puppy things. At best, you improve employee morale and develop your company's culture as a cool, animal-loving work environment. That's something to woof about.

Study: 80% of Employee Credit Card Fraud Happens at Businesses with <50 Workers

16. July 2015 08:15

employee running a credit card through a reader

Unthinkable – how could an employee possibly steal from your business? Someone you see and work with every day, no less. They might as well be filching from their own paychecks.

Sad to say, but a new survey from Hiscox reveals that the unthinkable is not only true, but it happens to small businesses more often than we could have guessed. Here are some shocking takeaways:

  • 81 percent of check fraud happened at organizations with 50 or fewer employees.
  • 80 percent of credit card fraud happened at businesses with 50 or fewer employees.
  • 53 percent of thefts were committed by employees with senior roles.
  • 43 percent of thefts were committed by non-management employees.
  • Retail businesses, healthcare businesses, and nonprofits were the biggest targets, suffering median losses of $606,012, $446,000, and $202,775, respectively.

Couple these findings with research from ACE Group that shows 24 percent of insider misuse data breaches stem from former employees, and it looks like you have your work cut out for you.

This isn't to say all small-business employees are thieves. Rather, it's a reminder that given the means and opportunity, you can never be sure what people will or won't do. It also reinforces the fact that investing in data security isn't a lofty goal – it has measurable, short-term benefits that keep your finances in check.

Let's review how managing security can cut down not only your data breach exposures, but also your fraud risks.

Managing Risks, Taking Names

When devising your business's security strategy, it's imperative to think about who has access to sensitive data and to limit that access as much as possible. As we note in "Treat Your Data Like a Picnic Basket to Minimize Breach Damage," segmenting access ensures you can…

  • Quickly pinpoint where the loss is coming from.
  • Minimize the amount of theft or misuse.

The Hiscox study does mention that the people you trust with this access may be the ones who ultimately exploit it. After all, employees with long tenure are the most likely to commit fraud. But the survey also notes that the creating the 'perception of detection' can be a formidable deterrent. Essentially, that means you ensure employees know that someone is watching and any schemes to pilfer the goods will be quickly thwarted.

How can you do that? Here are some tips:

  1. Create a formal fraud policy. This is key to increasing the perception of detection. Train your employees on this policy so they know you're on the lookout for suspicious activity and you have controls in place to catch it.
  2. Send bank statements directly to your home. That way, the statements can't be falsified later. Also, this gives you the chance to compare financial statements against the budget and investigate anomalies.
  3. Check payroll reports. You might want to compare cancelled checks to invoices just to be sure nothing fishy is happening.
  4. Personally sign all checks. Signature stamps can easily be swiped and misused. If you must use a stamp, keep it locked away where only you can access it.
  5. Create policies for credit purchases. This should outline how purchases are made and reported and acceptable expenditures. Be sure accounts have strict spending limits.

For more tips on how to keep your sensitive data under close guard, read "5 Business Events that Should Trigger Password Changes."

Lower General Liability Insurance Renewals for Low-Risk Businesses

15. July 2015 08:07

happy team

If you're diligent and already have a General Liability Insurance policy in place, you may be in for a pleasant surprise when it comes time to renew. According to a Business Insurance report, more underwriters are getting in on the General Liability game, which means the market is saturated (or if we want to bust out the fancy terminology, the market is "soft," which means there's more supply than demand).

If you have a relatively low-risk profile (i.e., you haven't made a ton of claims on your policy and aren't in a high-risk industry), your General Liability costs may be markedly lower when it's time to renew this year. The report states that some commercial liability renewal prices are dropping by 10 to 15 percent.

In practice, it may be wise to compare General Liability Insurance quotes – in this kind of market, you're the one holding the bargaining power.

You Better Shop Around (for General Liability Insurance)

When insurers compete for your business – which is exactly the environment a soft market creates – you can usually expect more policy options and better prices. For example, an insurer may be willing to:

  • Add coverages to your policy without breaking the bank.
  • Reduce your premiums if you have a clean claims history.
  • Give you a quote well in advance of the renewal date to try to keep your business.

You never know what options you may come across, so cast a wide net and compare quotes whenever possible. (For tips on comparing insurance quotes, read "Decoding Your Small Business Insurance Quotes.") You may be happy enough with your current General Liability Insurance policy, but it couldn't hurt to see what other insurers are offering before you renew your plan.

Specifically, you may want to look for a General Liability Insurance policy that, in addition to third-party bodily injury and property liability coverage, has…

  • Advertising injury coverage.
  • Medical expense coverage.
  • Coverage for business partners or vendors.

Read more about the unsung coverage options General Liability can offer in "6 Hidden Gems in Your Commercial General Liability Policy."

And lastly, to get the most desirable coverage at the best price, work with an independent insurance agent. They can connect you with multiple quotes from competing insurers, which means you get plenty of options without having to do all the searching yourself. Of course, our agents are happy to help.

Save Money by Preventing General Liability Claims

In order to capitalize on the market's lower General Liability renewal rates, your business needs to have good loss ratios (i.e., few claims). The easiest way to do that? Manage possible risks from the outset so you don't have to draw on your policy too frequently. Here are some ideas:

  1. Limit public access to cluttered or slick areas on your premises.
  2. Keep walkways and parking lots clear of obstacles that could cause injuries to clients and visitors.
  3. Use runoff mats at your entrances to collect tracked-in water that could cause slips.
  4. Install handrails next to steps or inclines.
  5. Create a social media policy to prevent advertising injuries.
  6. Implement strict quality control for all products you sell or customer property you handle.

For more risk management tips, read "5 Ways to Prevent General Liability Claims."

Want Bigger Clients? Beef Up Your Cyber Security

14. July 2015 08:06

man on a laptop in a field

Here's a little something that big-money clients took away from the infamous Target hack a few years ago: their security is only as strong as the weakest link. After all, Target's breach of 40 million customer credit cards was made possible once hackers got a foothold in the HVAC vendor's system, which was a surprisingly easy feat.

Advisen states the cyber crooks simply sent a malware-laden email to one of the HVAC employees who had access to Target's network for electronic billing and project management. One unsuspecting click – and boom. The hackers were in.

By now, it's common knowledge that cyber saboteurs zero in on the easiest point of entry to access their targets. Unfortunately, those easy entries are usually the small businesses and independent contractors that do business with larger (and more valuable) corporations. Advisen explains big businesses may get cold feet about partnering with small entities, given that…

  • Small businesses and contractors usually don't have robust IT security in place.
  • It takes about 240 days to notice a breach, which is a long time for data to bleed out.
  • There have already been 380 breaches in the United States this year.
  • 1,000 breached records cost about $52,000 to $87,000 in losses.

That's not to say your dreams of reeling in the big fish have floated downstream. Rather, you need to demonstrate the strength of your data security to win over corporate clients. Let's recap some ways you can do that.

1. Give employees full-blown cyber security training.

Employees are and always will be easy targets for cyber attacks. To make matters worse, email phishing attacks are on the rise, and they don't look like the messages from Nigerian princes that were once so easy to spot. These emails appear to come from managers or vendors and ask employees for login credentials or other confidential information. Wily hackers! Once the goods are surrendered, they can wreak havoc and plunder with ease.

Training your employees is the key component in your cyber security defenses. You might want to:

  • Teach them about malware links, phishing emails, and what a thief can glean from trashed hardcopy records.
  • Give them the resources they need to access your business network safely.
  • Require that they use two-factor authentication for their business email.
  • Train them on the importance of changing their passwords and updating software regularly.

For more tips, read "Want to Cut Business Losses by Three-Quarters? Try Security Training."

2. Consult with an IT professional.

If a device is used to connect to the Internet (e.g., router, smartphone, or laptop), it's a data breach liability. Good thing an InfoSec consultant can help your business identify potential risks and manage them through software and best practices.

In the age of mega hacks, it's not enough to simply run the occasional antivirus program (though antivirus software and firewalls should be staples in your digital security). Valuable clients want more guarantees than those bread-and-butter security measures. An IT professional can help you figure out which software or equipment can better protect data and give big clients the assurances they expect from their vendors or partners.

3. Invest in Cyber Liability Insurance.

Another way to demonstrate your commitment to data security? Carry Cyber Liability Insurance. Few small businesses do (only about 3 percent), even though it's the only policy designed to cover the costs associated with data breach recovery. The fact that you do have a policy can help distinguish your business from competitors and prove to clients that you understand the stakes when it comes to data breaches.

In addition to helping you position your business as a security-savvy partner, Cyber Risk Insurance can help you pay for:

  • Notifying customers about a breach.
  • Providing credit-monitoring services to affected parties.
  • Repairing your network.
  • Rebuilding your reputation through good-faith advertising and other PR measures.

Some policies may even provide coverage for business interruption costs when hackers disrupt your service.

As for the price of coverage, that depends on the size of your business, the number of customers, your web presence, and the type of data you store and collect. However, you may be able to save on your Cyber Liability coverage by adding it to your Business Owner's Policy.

Put these three tips to use, highlight your efforts in your marketing materials, and go fish.

Customer Rating 4.9 out of 5
Read Customer Reviews