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The Unusual Way One CA City Helps Small Businesses Manage Risk

21. July 2015 08:05

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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…

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…

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.


Errors and Omissions Insurance | General | General Liability Insurance | Small Business | Small Business Risk Management | Tips for All Small Businesses

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