Business Ideas Blog

Business insurance can be a complex subject, with many internal variables that need to be examined before a wise decision can be made. For this reason, anyone considering business insurance should first seek the advice of a reputable broker or agent. This article will detail a few of the many variables that business insurance may contain.

As with most insurance types, business insurance is used to protect the business and the business owner should unforeseen events happen to the business. The trick is to make sure that your business is covered for those events that are most likely to happen and to never find yourself unprotected, which might lead to the financial collapse of the business.

Business insurance can be purchased to cover virtually every aspect of the business. For example, most business owners have a policy that protects them should they lose their business property. Fire and theft insurance would be two means of doing this. Business owners may also want to protect their inventory and their equipment. As well, they most often want to have some form of protection in case an employee is injured on the job.

The types of business insurance and the levels of coverage are often determined by the type of business itself, but it can also be influenced by lenders who hold portions of the business as security against loans that may have been made to the business in the past. Lenders who have financed expensive machinery or other types of equipment will often want the business owner to have some form of insurance on the machinery. This use of insurance helps to protect the lender as well as the business owner should loss occur to the insured item.

The use of business insurance is also important as a form of protection against personal liability. Personal liability is when a business owner or owners can be held personally responsible for injuries or damages that occur on the business property or during the course of normal business operations. If a business owner is found to be personal liable for damages or injuries, the owner will have to use his or her own assets to pay for those injuries or damages. This might include the sale of a private home, automobiles, cash, savings, or any other asset that has value. There are business insurance policies that can help protect an owner against such claims.

Although business insurance is considered an expense, it is often a tax deductible expense. Anyone who is thinking of starting a new business or buying an existing business should invest the time needed to research the types of insurance they will need for that business. Again, the very best way to do this is to speak with a reputable agent or broker. Once you have a clear idea of exactly what you will need you can then begin to shop for the best prices.

At the very minimum you want to make sure that your personal liability is covered by some form of business insurance. Ignoring this may cost you everything that you have worked for and earned.

Running a home business can be an excellent advantage when tax time rolls around. However, taxes are often the farthest thing from the mind of many a harried home business owner. Implementing just a few small changes in your lifestyle can make tax time easier and more rewarding when it comes to your home business.

One of the first things you can do to help your home business in terms of taxes is to keep a record book in your vehicle. With this, you can easily record mileage for home business related trips.

Also, in order to get every deduction possible, it’s important to keep all of your electric and heating bills. Home business owners can usually take a portion of these bills as a deduction, but you will want to keep them well filed and organized so you are not hunting for them when it’s time to pay your home business taxes.

It should go without saying, but always remember that every home business owner should be keeping meticulous track of all money that comes in and out of the home business. This can be done through a computer spreadsheet or home business accounting ledger, or even your own home business system that works well for you. Along with your written record, you should have a place where all home business receipts and bills are kept. Internet usage, phone bills, etc. can all be deducted as home business expenses, so keeping them in good order will help you have your numbers ready for tax time. Also, being well organized and saving all of these papers will protect your home business in the case of an audit.

Additionally, always find a way to keep things as organized as possible. Perhaps make the end of each month a time set aside for tidying up the home business books and printing and filing spreadsheets as backup copies. With a few good organizational tools in place, tax time will not have to be dreaded.

S&OP (Sales and Operations Planning) is not a computer system that can, at a flick of a switch, resolve your business issues. S&OP is a way of life, a way to help control your business, presenting the ability to formulate objectives at suitable levels of detail to ensure inventory levels are met, production schedules can (or cannot) be achieved and most importantly sales plans can be met.

Using S&OP as a tool

Having had many years experience at running an S&OP process the key is to become disciplined in the way it is approached. You need to know what your sales people are doing, ensure they submit both forecasts and deforecasts (and have tools to track if they are doing what they should do), collect data, analyse and share the information down the supply chain to ensure demand can be met by the capacity that is available in production, or service areas. S&OP can also be used not only to drive volume estimates but it can also be a critical tool to drive revenue forecasts as well. In many cases the Operations Director is the person to drive this process forward.

S&OP Planning

Sales & Operations Planning is a key alignment process that can bring all relevant areas of the business into position to meet business objectives. The process can enable organisations to achieve business growth and at the same time, depending on the forecasting horizons, define clearly what is going to happen in the future. This can help build sufficient capacity for a growing business or just a critical, identify where lower capacity is required and thus forward plans can take a new direction in order to bring costs in line with market place decline. At manufacturing level the S&OP can help develop rough cut capacity planning which in turn can cascade further down as far as raw material procurement. The S&OP is the master tool for balancing the business and if managed correctly can be one of the most critical elements in a business tool box.

Business Operations

If you are new to the S&OP process, it can actually be started in a very simple way with the use of market intelligence, sales data, requirements data (which can be calculated of you have the sales and forecast data) all in an excel spreadsheet. If you have multiple sites, then through spreadsheets the consolidation of the data can be easily achieved by a person with intermediate knowledge of worksheets. You have to have the passion to follow the process through and have the support of the company’s management. If you do not have this then there is a chance that all the good work you put in could actually result in nothing.

Management Buy-In

When creating S&OP plans ensure there is senior management buy-in as it gives the whole process suitable credibility. Key performance measurement (otherwise know as “KPM’s” or “KPI’s”) can ensure that the execution of the S&OP meets the expectations and performance of the business e.g. you plan to meet 98% stock availability by forecasting in your S&OP and creating suitable statistical replenishment plans to hit the probability of 98%. The theory of the S&OP should be understood by all right from the CEO down to the shop floor worker; everyone is aligned to meet the company’s objectives.

Supply and Demand

It is always a balancing act in terms of demand and supply. Businesses, in order to keep unit manufacturing costs at their lowest possible levels obviously want to keep their order books as full as possible. S&OP should not only be just a spreadsheet full of numbers, the process relies on excellent communication between sales and manufacturing in order that everyone benefits. Poor forecasts can influence a businesses success; forecasts that are too high can result in under utilisation of manufacturing, one that are too low and the businesses credibility can be severely dented as sales people wont hit their commissions and more importantly customers are let down. The ultimate issue could be that if you are a public limited company, then your share holders could be asking some serious questions on how the company is being run.

Forecasting

Forecasting is probably the most key element within the S&OP process. Business intelligence, Customer Relationship Management and dialogue with sales are all elements that should be used to acquire excellent forecasting performance. If you are developing a forecasting tool at this moment in time, I would certainly recommend it has a feature that can measure demand versus forecast and if possible an output (report) which can advise you of the forecast error being given every month (or whatever your forecasting time period is that is critical to your business).

In Conclusion

If you have not already done so for your business, no matter how large or small consider introduce an S&OP process. Keep it very simple and one that can be maintained on an ongoing basis. If you have CRM or other information ensure you use it to build a forecasting profile. The process will assist in ensuring all elements of the business are in alignment and it will flag any business critical issues, even ones that may be occurring in two years time!