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How to Protect and Nurture Your Startup Business

startup

Running a startup business means taking risks. Whether you’re assembling a new team of new employees for the first time, balancing your finances, or investing your own cash to keep the company up and running, you have to roll with the punches in your first few years of existence.

This article takes you through the process of protecting and nurturing what you’ve got, enabling you to build your business up from the strongest-possible foundations. In doing so, you’ll be able to leap on into the next phase of your startup’s growth.

Get the Basics in Place

When talking about startup growth and sustainability, it’s impossible not to focus first on the basics. You need to be getting the business fundamentals absolutely spot-on in order to move onto bigger and better things – and it’s these small yet important details that can sometimes go unnoticed to the point of outright neglect. Neglecting these can mean the difference between thriving as a new business, and having to close the doors forever.

The basics include such processes as:

  • Maintaining rental and utility bill payments to your office space
  • Ensuring your staff are contracted and happy in their roles
  • Checking regularly on your finances to ensure you’re ticking over at the right rate
  • Investing incrementally in different areas of your business
  • Making plans for the future, including contingency plans for when the going gets tough

With these basics in place, you’ll be best-placed to build your business into a force to be reckoned with in the future.

Make Sound Financial Plans

Possibly the most crucial phase of your startup’s growth is the point at which you invest your profits, not your own cash or funding capital, into your business. But to get to this stage, you need to both plan out your finances, and make sure that you’re monitoring your ins and outs astutely.

There are, additionally, some important financial steps that successful businesses take in order to protect what they’ve built, including business liability insurance. Business liability insurance from Next Insurance will help you push back with the amount of cash necessary should you encounter bad luck on your business path ahead. This is deeply important for your financial planning and caution in the future.

Steady Growth

Startup leaders and serial entrepreneurs will tell you that the most challenging phase of their businesses’ development is the point at which the company stalls, stagnates, and stops seeming to grow. It’s at this point that the business might shrink or collapse – and all that you’ve spent so much time building will fall away.

In order to prevent this feeling of stagnation (and the risks associated with it), ensure that you’re always planning your next phase of growth months in advance. If you’re doing this proactive work, you’ll be nurturing your business into something sustainable, profitable and constantly growing and evolving throughout the years.

These tips will help you plan your startup’s journey from a fledgling business to successful enterprise while guarding the assets you possess.

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Insurance

Life Insurance Jargon Buster

meeting

Researching life insurance is fraught with terminology you need to understand before you consider any type of policy.

In this article life insurance providers Reassured have demystified many of the key terms you’ll come across and we encourage you to reference this glossary as often as you need to so you’re fully informed before choosing this type of finance product.

Life insurance

Life insurance is a type of policy that pays out a cash lump sum to loved ones if the policyholder passes away during the term of the policy.

The policyholder will pay the insurer a monthly premium throughout the term to secure cover.

Level term life insurance

This type of life insurance policy will pay a fixed cash lump sum to loved ones if the policyholder passes away during a specified term length.

Decreasing term

This type of life insurance policy will pay a cash lump sum to loved ones when the policyholder passes away during a specified term length, however the value of the sum assured (pay out sum) will decrease during the term.

Whole of life

A whole of life insurance policy provides protection for the whole of your life and guarantees to pay out a cash lump sum to loved ones when the policyholder passes away.

Over 50s life insurance

An over 50 life insurance policy, also known as an over 50s plan, that guarantees acceptance for people aged over 50 (and younger than 85) and offers a guaranteed pay out to your loved ones when you pass away.

This type of policy does not require applicants to disclose any medical information to the insurer.

Family income benefit

This type of policy provides your loved ones with a regular, fixed, tax free income for a set period of time after you pass away.

Joint life insurance

Also known as life insurance for couples, joint life insurance is when a term or whole of life policy is taken out for two people that covers them simultaneously.

The pay out is made upon the first death and the policy ends.

Critical illness cover

Critical illness cover (sometimes referred to as critical illness insurance) provides a tax-free lump sum pay out if you are diagnosed with a specified life-changing (but not terminal) illness, covered by your policy.

At Reassured, this can be taken out as an add on to a life insurance policy or as a standalone product.

Terminal illness cover

This type of cover usually comes as standard with any life insurance policy, at no additional cost.

It allows you to make an early claim on your policy if you’re diagnosed with a terminal illness and predicted to pass away within 12 months.

Impaired life insurance

An impaired risk applicant is identified by an insurer as a high-risk applicant who is more likely to make a claim on their life insurance policy.

Those who may be considered impaired may have pre-existing medical conditions, a dangerous job or hobby or have a particular lifestyle choice affecting their health, such as a smoker.

Funeral plan

A prepaid funeral plan allows you to pay for and arrange your own funeral in advance, so your loved ones don’t have to.

You pay either by lump sum or by monthly payments to a funeral plan provider. You are able to secure the cost of a funeral today, avoiding the rising cost of funerals.

Life insurance policy

A policy is a legal contract between a policy holder and an insurance provider in which states the terms, conditions and details of the agreement.

Policy holder

The written name of the person in which the life insurance policy protects.

Sum assured

The guaranteed pay out amount from an insurance policy. The sum assured (or cover amount) is calculated at the beginning of the policy.

Premiums

A sum paid monthly by the policyholder to remain covered by the life insurance policy.

Guaranteed premiums

A guaranteed premium remains fixed throughout the life insurance policy, (or until you pass away in the case of whole of life)

Reviewable premiums

A reviewable premium is reviewed by the insurer at regular intervals and the rate can be increased.

Underwriting

The underwriter of a life insurance provider will calculate the cost of life insurance premiums by using statistical analysis and mathematical equations based on the information the applicant provides.

Non-Disclosure

This means failing to provide the insurance company with all the correct information regarding your personal circumstances upon application.

If you do not make a full disclosure, then you may not be covered and your life insurance policy may not pay out.

Guaranteed acceptance

When an applicant is guaranteed acceptance for a life insurance policy or a funeral plan, then they will not need to provide any medical information to secure this type cover.

Life assurance

Life assurance is a type of policy that pays out a cash lump sum to loved ones when you pass away, (not if). An example being an over 50s plan.

The policyholder will pay the insurer a monthly premium throughout the policy for the cover to be effective.

Guaranteed Insurability Option

Also known as a special events clause or policy increase option, a guaranteed insurability option is when the details of a life insurance policy are changed by the policy holder due to a change in their personal circumstances.

FCA

Reassured, amongst many other life insurance providers, are regulated by the Financial Conduct Authority.

The FCA was created by Parliament to regulate the conduct of financial services in the UK. The FCA ‘aim to make financial markets work well so that consumers get a fair deal’.

Waiting period (qualifying period)

An over 50s plan, or over 50s insurance, have a waiting period or qualifying period (typically 12 or 24 months) from the start date of the policy.

During this period of time, if the policy holder dies of natural causes then a pay out will not be issued. If the policy holder dies as a result of an accident, then their death will be covered by the policy.

Trust

A life insurance policy can be written in trust by the policy holder so that they have more control over how the proceeds are spent.

Upon their death, the trust is handed over to the trustee who takes care of the claim and manages the pay-out (on behalf of the beneficiaries) as per their wishes.

Beneficiaries

The beneficiary (or beneficiaries) of a life insurance policy written in trust is the individual who benefits from the pay out from the policy (and is nominated by the settlor).

Settlor

The policy holder (owner) of the life insurance policy that is written in trust.

Estate

Any financial asset owned by the policy holder that passes away, such as their property.

Trustee

The trusted individual (nominated by the settlor) who manages the policy once the policy holder passes away, including distributing the funds as per their wishes (on behalf of the beneficiaries)

Probate

Probate is the legal process of which confirms that your executors are in the position to administer your estate to your beneficiaries.

Probate does not need to be granted if a life insurance policy is written in trust (as it is not considered as part of the estate).

Inheritance tax

“Inheritance tax is a tax on the estate (the property, money and possessions) of someone who’s died”.

For an individual in the UK after your estate exceeds £325,000 you are taxed at 40%! Although this threshold may seem a lot, it includes you property, savings, possessions and proceeds from your life insurance.

Visit https://www.gov.uk/inheritance-tax for more information.

Will

A will is written by someone before they pass away to determine what should happen to their estate after their death.

Sources:
https://www.reassured.co.uk/
https://www.moneyadviceservice.org.uk
https://www.gov.uk/inheritance-tax

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Insurance

What Is the Purpose of Key Person Life Insurance?

people negotiating

As the owner of a business who is currently strategically planning, or thinking about beginning with this process, then you can be considering getting key-person life insurance, which is even known as the key-man type of insurance.

This insurance ensures coverage to the most vital person in the company. This policy works similar to that of life insurance as it protects your family financially after your demise. The key person life insurance policy as compared to life insurance of the personal type mainly protects your business.

What is a key person life insurance?

If the owner or any other significant employee of a particular company dies, the key-person life insurance will bring a death benefit to the business. If the reputation and the financial status of your company are closely associated with the name of a particular person, his skill set or reputation, you need to have critical person insurance to make sure that your company is not financially affected if he passes away.

This type of insurance is also useful for partnerships. When one of the two dies, the second person can buy shares of the one who has passed away. This insurance lets the business continue to run smoothly when the executive is looking for a replacement to take over or is implementing other strategies.

How does the key-person life insurance work?

The company ensures life insurance policy for its vital employees will pay for the premiums and will act in the position of a beneficiary for all these policies. It receives a payoff if the key person passes away which can be utilized to pay for various expenses, like getting a replacement, paying off debts and investors, or paying a pittance to the workers if the company dissolves.

What kind of person is the key person insurance for?

Looking closely at the structure of your business and your co-workers may help you decide if you need key person insurance. You may consider someone else apart from you as the key person in the company. If you’re the sole proprietor, you don’t require this insurance.

How much coverage should you purchase?

The coverage your business needs depends on factors like what effect would the death of the person has on your company financially. If you are the sole proprietor, you need to calculate how much coverage your descendants would need financially.

What are the insurance policy exclusions?

Before investing in the policy, read carefully what all it covers. You need to keep in mind that your claim can be rejected if you meet any exclusion. The most common exclusions include fraud of any kind, intentional dishonesty, or suicide within the contestability period, that is, if the person commits suicide within two years after the life insurance policy has been taken.

What is the purpose of key person insurance?

To make sure that your company is continued even after your demise and is not forced to be closed, you need a key person life insurance. Additionally, this insurance helps in sustaining your family after you pass away.

How to apply for key person insurance?

As this insurance is customizable, you need to check the coverage limits and read all the terms carefully. By increasing your premium a little, you can get an increase within your coverage too. Settling for the cheapest policy isn’t a wise thing to do. Renewing the policy later may end you up with paying more as the person will be older.

You need to keep in mind that your coverage limits alter as your business grows. You need to increase the value of the key person accordingly. If you don’t grow and change your policies accordingly, your family will not receive as much money as they might need.

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Insurance

Why Your Taxi Business Should Consider Going Green

London

The state of the environment is a much talked-about topic across all industries and markets, including the taxi and transportation industries. Unfortunately, cars and other vehicles are one of the primary villains regarding carbon emissions. However, taxi companies provide a valuable and vital service for so many people on daily basis, not to mention pumping money into local economies as well.

Adapting the way your run your taxi business now can have a huge impact on your success as rules, regulations, and public awareness err on the side of environmental caution.

Here, we’ll take a look at how your business can go green and the steps you can take to provide a safer environment, both financially and in terms of the world around you.

What Does Going Green Actually Mean for You?

‘Going green’ is a bit of a buzzword at the moment, with all sorts of industries capitalising on their consumers desire to be more ‘woke’ to the issues that are affecting us and the generation coming next. This is no different for taxis. Car companies have put billions into developing both hybrid and electronic vehicles that emit less carbon into the atmosphere, helping reduce the footprint they make.

Unfortunately, due to the nature of the business, taxis are obviously on the road all day and all night. Figures from a report published by the Low Carbon Vehicle Partnership and Energy Saving Trust show that private hire taxi vehicles contribute negatively to air quality, and as a result the health of the public and the drivers themselves. In central London in 2013, for example, up to 18% of nitrogen oxide emissions come from taxis. The report also states that air pollution is still the number one environmental cause of preventable illness and dead in the UK – a shocking statistic.

So, what does this mean for you? You’ve likely spent years building up a taxi fleet and might be reluctant to scrap all your diesel vehicles for costly new hybrid or electric cars.

The government’s The Road to Zero strategy is aimed at setting targets for the reduction or diesel and petrol car sales in the UK, starting with at least a 50% reduction by 2030 and an all out ban by 2040. This, as well as the potential for new emission regulations, means that futureproofing your business today will pay off in the long-term.

How Do You Start Your Path to a Greener Business?

If you are a taxi fleet owner in London, you will already have seen that new regulations came into force on the 1st January 2018. All newly-registered taxis have to be capable of zero-emission with any CO2 emissions emitted being below 50g/km.

Deciding to either adapt your taxi business for new green measures or set up a new taxi business with an eco-friendly fleet is the first step. Once you’ve made that choice, you need to start thinking of all the environmental risks your business presents and how you can mitigate them.

Obviously, you must start with the vehicles themselves. There are schemes in place to help alleviate the financial costs of going green, such as Transport for London’s £5000 grant for taxi drivers who delicense their current vehicle to buy a new hybrid or electronic one.

There are many acronyms out there pertaining eco-friendly vehicles, so let’s dive in and define them:

  • ULEV: Ultra-Low Emission Vehicle
    This is a car that produces less than 75g of carbon monoxide per kilometre and can drive for ten miles without emitting any carbon monoxide at all
  • EV: Electric Vehicle
    This refers to fully-electric cars that are powered by battery which is charged using charge points (including all Tesla cars, the Nissan Leaf, and the Kia Soul EV, among others)
  • Hybrids
    These are cars that have smaller batteries than EVs that are charged through coasting and braking, meaning they have far shorter electric ranges
  • PHEV: Plug-In Hybrid
    These are closer to ULEVs than standard hybrids because they have larger batteries and can use electric power for longer due to being charged at chargepoints
  • FCEV: Fuel Cell Electric Vehicle
    These cars use hydrogen and oxygen to create an electric current. They don’t release any emission from the exhaust pipe because they are simply powered by heat and water. These are much less widely-used than the other types of we’ve mentioned because charging points are scarce.

With so much to choose from, all offering very different eco-friendly elements and at varying prices, it can be hard to even know where to start when it comes to upgrading your fleet.

One of the main things you will likely consider as a business owner is the cost. Luckily, because there is so much attention being placed on this category in recent years, the government has set up a multitude of schemes and grants to help taxi business owners conform to the new regulations put in place.

Alongside the £5000 grant mentioned above, there are several other schemes to consider, including:

  • OLEV funding for taxi charging: funding for local authorities to set up a charging structure for ultra-low emission taxis
  • Plug-in taxi grant: a grant for eligible plug-in vehicles that is deducted from the retail price when taxi companies by new vehicles
  • EV Homecharge Scheme (EVHS): a grant for up to 75% of the cost of installing a chargepoint for the registered primary user of an electric vehicle
  • VED rates/Fuel duty: all taxis that are entitled to the plug-in taxi grant are exempt from vehicle excise duty if the vehicle is over £40,000. Similarly, electric and hydrogen vehicles will not have to pay fuel duty

What About Insurance for Eco-Friendly Taxis?

Insuring your eco-friendly fleet might be a bit more expensive than a petrol or diesel fleet. This is for a number of reasons, but the main issue is that these low emission vehicles present a slightly higher risk than other cars.

This is not through any driver fault; it is simply because they are usually more expensive which means they will cost more to repair in the event of an accident. Most taxi insurance brokers will, however, try their best to find a competitive quote for comprehensive cover. Having said this, as these types of taxi becomes more prevalent on UK roads, places that can repair them will themselves become more ubiquitous, which will bring prices down considerably.

Taxi insurance brokers can also help offer some advice on how to mitigate these costs with some tips and tricks to reduce the cost of your premium. You could employ telematics in your taxis, which is black box technology that tracks the way your drivers use their vehicles. The safer they drive, the less they will pay because the broker sees they present less of a risk on average.

The best option for taxi insurance is to shop around. It might be tempting to get the bare legal minimum of motor insurance, which is third party only (TPO), however this will not adequately protect you from the costs that can accrue in the event of a claim. Look around and make comparisons where you can, this will help you in the long-term.

Summary

There are many options out there for making your taxi company greener and therefore better for the world around you. Preparation and research are key to making a relatively simple transition. With so much help available from the government and local authorities, not to mention the number of regulations quickly being put in place, you can afford to work out a greener way of running your business, without losing out on valuable revenue.

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