Doing Diversification Right: Considerations for you and your business
At least once a day our staff take calls from clients looking to either start a new business venture or diversify their income. In this article, we explore the considerations that you as an individual or business face when diversifying and things to consider when planning your activity.
As a business or individual wanting to start diversification, there are many considerations. While the last few months have shown that things can be done quickly and delivered efficiently, they also need to be reviewed regularly and have supporting material & processes behind them.
We’ll take the example of a landowner wanting to open their fields up to the local community. One such example we’ve seen a number of enquiries for is a dog walking field. As an outline guide:
- Have you considered how access would be controlled?
- What additional fencing would you put in place to secure the field?
- Would you charge users and, if so, how would this be billed?
- What risk assessments have you completed to show it’s a safe activity.
These are just a sample of the questions that we as brokers would be asked by insurers. Using a business plan or risk assessment to provide answers to any questions, can make any proposed diversifications more attractive to an insurer and can often unlock the best possible rates for your new ventures.
Another example is a business IT support firm offering to facilitate home PC building, testing and support. While this would seem a simple exercise, questions to consider would be:
- Have you considered the additional risks involved in doing home testing?
- What additional amount of stock would you need to carry to fulfil orders
- What security is on that stock?
- Do you offer guarantees as part of your work?
In our final example, we’ll look at a retail firm that is taking internet orders. For this, typically insurers would ask:
- What security is on your website to prevent fraud or theft of customer data?
- Are servers based here or abroad?
- Do you do regular backups?
- Where are your products sourced from?
As you can see, theres a wide range of questions that insurers can ask.