Every business owner strives to reduce expenses as much as possible, as a firm's profit is simply the amount of money left over after expenses are added up and the total is subtracted from the company's income. This is true in all kinds of economic conditions, and applies to every category of business. However, it's even more important for the owners of small businesses, especially in difficult economic times. If a small business owner wants his company to survive and prosper, he must reduce his expenses wherever he can. One area every small business owner should consider for cost reduction is insurance. Too many people simply pay their insurance bill every month without stopping to consider if there's any way to lower their premium.
The good news is that there are actually many ways to lower the cost of small business insurance. Of course, coverage will vary from company to company, and firms in high risk industries, or high crime areas, will naturally pay more than firms which don't face the same hazards, but generally speaking, almost every business person could be paying less than their current premium for insurance. How? Well, there are four ways to substantially reduce the cost of small business insurance. Let's look at them.
First, the business owner can improve safety in the workplace. This might mean hiring a professional inspector to conduct a safety audit, but the expense is well worth it if it leads to reduced insurance premiums. The average person doesn't have the expertise to spot many hidden or less well known safety hazards; calling in a professional who does have these skills can pay off substantially. A person should get a safety audit done, make all recommended changes, and then notify the insurance agent of the changes and ask for a reduced premium.
Second, the owner can greatly enhance security in the workplace. Technology is constantly improving, and something that was on the cutting edge just a few years ago may now be obsolete. Locks and alarms are two areas where it really pays to have the very latest in technology. Installing a closed circuit television system, or replacing an outdated one, can also lead to lower insurance costs. If the area surrounding the business has a high crime rate, moving to a different location could also mean big savings on insurance.
Third, the owner can agree to a higher deductible. This can result in a drastic drop in monthly or quarterly premiums. Every business owner must decide how high of a deductible is safe and prudent, but it should be kept in mind that the higher the deductible is, the lower the premium will be. Fourth, a business owner should shop around. Many of them have been with the same insurance agent or company for years, or even decades, and don't compare costs out of a sense of loyalty, or mere complacency. This is understandable, but it's not cost effective. A person should talk to their agent about lowering their premiums, especially after making the changes recommended above, and if the agent can't lower their costs, then they should start getting quotes from several other companies. If a small business owner takes all four of these steps, a substantially lower insurance premium will be the reward.