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Starting A Business

BPP Insurance: What It Is, Who Needs It

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Business personal property insurance, or BPP insurance, can pay out to help you repair or replace items your business owns, including machinery, furniture and inventory. This coverage is part of business property insurance policies.

Most businesses need property insurance as part of their small-business insurance coverage. But if you carry inventory, use specialized equipment or have invested in furnishing your space, make sure your property insurance policy includes BPP insurance with a large enough limit to cover all those items.

What does BPP insurance cover?

BPP insurance covers repairing or replacing business personal property when damaged by a covered cause of loss.

Business personal property can include:

  • Inventory.

  • Furniture.

  • Machinery and equipment.

  • Improvements you’ve made to a leased space as a tenant.

  • The property you’ve leased from another party that you’re required to insure.

Your business personal property may or may not be insured, depending on what caused it to be damaged or destroyed. All business property insurance policies — which also protect business personal property — provide coverage in case of:

  • Lightning.

  • Explosion.

  • Windstorm or hail.

  • Aircraft or vehicles.

  • Vandalism.

  • Riot or civil commotion.

  • Sprinkler leakage.

  • Sinkhole collapse.

  • Volcanic activity.

  • Fungus, wet rot, dry rot and bacteria, with some limitations.

Some, but not all, business property insurance policies cover losses due to:

  • Falling objects.

  • The weight of snow, ice or sleet.

  • Water damage.

Some causes of loss, like floods and earthquakes, are usually excluded from business property insurance policies. Read your policy closely to make sure you understand what’s covered and what’s excluded.

How do you get BPP insurance?

To get BPP insurance, you’ll need to purchase business property insurance and make sure there’s an entry for business personal property on the policy.

It might feel counterintuitive to buy business property insurance if you don’t own a building. But business property insurance can include coverage for three different types of property, including buildings themselves as well as the things inside:

  • Business personal property.

  • Buildings and structures.

  • Personal property of others that the business is temporarily holding.

Nerdy tip: Business property insurance can also include business interruption insurance, which helps make up for revenue your business loses while fixing property damage. If you’d have to stop operations while repairing or replacing your business personal property, ensure your property insurance policy includes this protection.

You can buy business property insurance on its own or as part of a business owner’s policy. A BOP combines business property insurance with general liability insurance, which can protect your business against lawsuits if someone is injured or their belongings are damaged by your operations.

In general, if you need BPP insurance, you should consider purchasing a BOP. It’ll provide the property insurance you need and help protect you if a customer or another third party accuses your business of causing them harm, which is one of the most common risks business owners face.

What’s the best fit for your business?

Answer a few questions and we’ll match you with an insurance partner who can help you secure quotes.

How much BPP coverage do you need?

For business property insurance policies, you typically need a policy limit of at least 80% or 90% of the value of the covered property. This is spelled out in what’s called the “coinsurance provision,” which you can find in your policy declarations.

If you choose an insurance limit lower than the percentage specified by the coinsurance provision, your insurance company may not fully cover your loss.

For instance, say your inventory would cost $30,000 to replace and you set your BPP insurance limit at $15,000:

If your inventory was destroyed, your insurance policy would only pay out your limit — $15,000 — and you’d have to pay out of pocket to recover the rest.

If your inventory was only partially destroyed, the insurance company might limit your recovery amount based on how well you complied with the coinsurance provision. For instance, say your coinsurance provision required a limit of 80% of the value of your property, or $24,000. If you only had a $15,000 limit, the insurance company could limit your recovery to 62.5% of the lost value since you complied with only 62.5% of the coinsurance provision.

How much does BPP insurance cost?

Commercial property insurance, which includes BPP insurance, costs $63 per month for the median customer, according to insurance marketplace Insureon.

That said, the cost of BPP insurance depends on how much property you’re insuring. In general, the higher your coverage limit, the more expensive your BPP insurance will be.

Get business property insurance quotes from several insurance providers to determine how much BPP insurance will cost for your business.

If you need coverage quickly:

  • Next allows users to get a quote and purchase a policy online. Users can also download an electronic certificate of insurance and receive a claims advocate they can call or text in the event of a claim.

  • Thimble is another online insurance seller that offers fast coverage, though its customer support is more limited than Next’s. Note that Thimble calls BPP insurance “business contents insurance.” 

If you need several coverage types:

If you want hands-on help:

What’s the best fit for your business?

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Finance & Accounting

4 tips to find the funding that fits your business

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The facts are clear: Startups are finding funding increasingly difficult to secure, and even unicorns appear cornered, with many lacking both capital and a clear exit.

But equity rounds aren’t the only way for a company to raise money — alternative and other non-dilutive financing options are often overlooked. Taking on debt might be the right solution when you’re focused on growth and can see clear ROI from the capital you deploy.

Not all capital providers are equal, so seeking financing isn’t just about securing capital. It’s a matter of finding the right source of funding that matches both your business and your roadmap.

Here are four things you should consider:

Does this match my needs?

It’s easy to take for granted, but securing financing begins with a business plan. Don’t seek funding until you have a clear plan for how you’ll use it. For example, do you need capital to fund growth or for your day-to-day operations? The answer should influence not only the amount of capital you seek, but the type of funding partner you look for as well.

Start with a concrete plan and make sure it aligns with the structure of your financing:

  • Match repayment terms to your expected use of the debt.
  • Balance working capital needs with growth capital needs.

It’s understandable to hope for a one-and-done financing process that sets the next round far down the line, but that may be costlier than you realize in the long run.

Your term of repayment must be long enough so you can deploy the capital and see the returns. If it’s not, you may end up making loan payments with the principal.

Say, for example, you secure funding to enter a new market. You plan to expand your sales team to support the move and develop the cash flow necessary to pay back the loan. The problem here is, the new hire will take months to ramp up.

If there’s not enough delta between when you start ramping up and when you begin repayments, you’ll be paying back the loan before your new salesperson can bring in revenue to allow you to see ROI on the amount you borrowed.

Another issue to keep in mind: If you’re financing operations instead of growth, working capital requirements may reduce the amount you can deploy.

Let’s say you finance your ad spending and plan to deploy $200,000 over the next four months. But payments on the MCA loan you secured to fund that spending will eat into your revenue, and the loan will be further limited by a minimum cash covenant of $100,000. The result? You secured $200,000 in financing but can only deploy half of it.

With $100,000 of your financing kept in a cash account, only half the loan will be used to drive operations, which means you’re not likely to meet your growth target. What’s worse, as you’re only able to deploy half of the loan, your cost of capital is effectively double what you’d planned for.

Is this the right amount for me at this time?

The second consideration is balancing how much capital you need to act on your near-term goals against what you can reasonably expect to secure. If the funding amount you can get is not enough to move the needle, it might not be worth the effort required.

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Starting A Business

What to keep in mind when updating your business plan

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Why, when and how

Did you know updating your business plan should be a part of your regular business practices? If not, don’t worry — a lot of people skip this step. But it could benefit you to make this effort.

Read on to learn why updating your business plan is so important, how to tackle this task, how often you should make updates, and key things to keep in mind.

Let’s get to it!

Why should you update your business plan?

Black and white photo of man looking at laptop screen
Image source <a href=httpsunsplashcomphotosLks7vei eAg target= blank rel=noopener nofollow external data wpel link=external>Unsplash<a>

Outside of updating your business plan as a standard course of doing business (which we’ll discuss in detail shortly), there are a few noteworthy situations that warrant a full business plan overhaul:

You need to raise funds

If you need capital to make tech upgrades, grow your team, or expand operations, you’ll likely need to raise funds. Before you can reach out to new investors, however, your business plan must be up-to-date and reflect your company’s current financial situation, including operating costs, cash flow, business goals, and income projections.

Related: 10 small business funding options

You want to refinance

Similar to potential fundraising moves, refinancing your business loans requires an updated business plan because it outlines operating costs, your company’s challenges, and forecasted revenue. No lender will entertain refinancing or even new loans without an updated business plan and financials.

You want to launch a new product

Big business moves necessitate an updated business plan and launching a new product or service qualifies. A new product means new potential revenue, so updating your business plan to reflect that fresh revenue stream is critical. Be sure to include everything you would’ve when writing your business plan the first time around — like costs, vendors, time frames, target demographic/segmentation, and financial projections.

You want to expand your company

Company expansion can take many forms. Perhaps you’d like to open up a second location in another city. Maybe you want to purchase more warehouse space for your products. Large technological upgrades are considered expansions, too. No matter what type of growth you have in mind for your business, updating your business plan to reflect this intention to grow is a key step before reaching out to investors and potential lenders.

You’ve changed your supply chain

Supply chain issues have become an acute problem since 2020. However, there has always been a need to update business plans to reflect changes in the supply chain and/or a change in the vendors you decide to use. Any time you make changes to your vendor list, put updating your business plan on your schedule.

Related: How to overcome supply chain challenges in 2022

You have new competitors

If a new major competitor enters your industry, it’s likely to affect how you do business. Whether that means your share of the industry “pie,” so to speak, decreases, or it means a new brand changes the expectations for your industry and you need to now follow suit — a  business plan update is in the cards to reflect these changes.

When and how often should you update your business plan?

As you can likely see by now, updating your business plan is an essential part of having a business plan in the first place.

It’s a dynamic document that needs to be updated to meet where your business is at right now.

Though you don’t need to update your business plan to reflect every little change, making regular updates is a solid business practice.

If your company is chugging along with no major changes, giving your business plan the once-over at least once a year should be sufficient for updating financial data and projections. However, if your company undergoes a major shift, you’ll want to update your business model when you expect that change to occur.

How to update your business plan

Close-up of person looking at charts next to smartphoneClose-up of person looking at charts next to smartphone
Image source <a href=httpsunsplashcomphotosjrh5lAq mIs target= blank rel=noopener nofollow external data wpel link=external>Unsplash<a>

Now that you have a sense of how often you should update your business plan and why you need to do so in the first place, let’s turn our attention to the real meat of this article: how to update your business plan. Here are six key things to keep in mind when updating this most important document.

1. Make updating your business plan part of your regular review process

One of the biggest obstacles to updating a business plan is scheduling the time to do it. Business owners are busy people, and it’s all too tempting to leave these sorts of tasks until tomorrow. However, you can get around this by simply incorporating a business model review into other processes you already complete.

If your company does quarterly financial reviews, add in a business plan review during this time. You’ll already be taking time away from day-to-day business operations to complete the financial review, so you might as well spend a couple of extra hours updating your business plan.

You could even schedule it for when you do your taxes or prep documents to send to your accountant. Add the business plan update to your to-do list for those days.

2. Include your team in the process

If you have any kind of team for your business, you must include them in this process. They are likely involved with the day-to-day functions of operating your business and can provide key insights into what the future of your company looks like. For example:

  • Ask the marketing team for reports on trends they’ve noticed over the past six months or so.
  • Ask sales about any demographic shifts they’re noticing in the customer base.

Those who are doing work within your industry daily are going to feel the subtle shifts within the market before anybody else. And they might have insights into what projections look like — things that you might not come up with on your own.

Leveraging your team means getting a more complete picture of what your company has accomplished, how it’s currently positioned, and where it will go from here.

Pro tip: You can manage these tasks directly in Microsoft 365 as well. Sharing documents is a snap and you can collaborate on your business plan in real-time.

3. Note regulatory changes

When updating your business strategy, take some time to research any regulatory changes that have taken place in your industry. New rules, regulations and laws are passed all the time and many can have a direct impact on how you do business.

For instance, payment processors now must report your earnings to the IRS. This change could affect how you report income and change your relationship with contractors. The implementation of sales tax on internet sales made in the state where your business is located is another example from the past that had a profound effect on companies doing business online.

Such changes can impact your financial reporting and/or make your business more competitive, and less competitive, and otherwise change your approach to how you do business.

4. Note vendor/supply chain changes

Another factor to take into consideration when updating your business plan is any vendor or supply chain issues or changes that have occurred since your last plan update. If a vendor suddenly changed their billing system or adjusted their fees, you might need to account for this in your business plan as it could cut into your profit margin projections.

Or, if the supply chain has made it so you need to use multiple vendors to meet your company’s needs without experiencing disruptions, your business plan should make note of this change — and even indicate that supply chain issues are an ongoing problem.

To be honest, nearly every company has experienced some issue with the supply chain since 2020, so if you haven’t updated your business plan since then, now is probably the time.

5. Keep broader economics in mind

The overall state of the economy can directly affect your company’s performance. And while economic downturns can leave some industries untouched, it’s rather rare. But even if your company is lucky and hasn’t been affected by broader economic fluctuations as of yet, keep updating your business plan on your radar.

The economy as a whole can impact your vendors, shipping, packing, contractors and other services related to how you do business. It can also affect staffing and the accessibility of talent. So even if your company hasn’t experienced negative effects, acknowledge the general state of the economy in your business plan and include contingency plans should issues arise.

6. Follow demographic changes

We’re currently in the midst of huge demographic changes in the United States and all over the world, which will have a direct impact on how you do business and what the future might bring to your company.

As of 2022, the median income among the middle class is going down, the income of the very wealthy continues to go up, and the median age of workers is going up, too. People are having babies later in life and at lower rates than in the previous generation.

All of these factors can directly impact your revenue potential as well as who your target demographic or ideal customer even is. And this means you need to update your business plan to account for these shifts. Continue to revisit demographic data and projections a couple of times per year to ensure your internal projections still apply and to see if your processes need updating and track your actual results. If so, a business plan update is in order, too.

What to do next

If you haven’t even so much as glanced at your business plan in a bit, now’s the time to dust off the document and give it a once-over. Times are changing — seemingly faster than ever before — so it would behoove you to set aside some time to update your business plan sooner rather than later.



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Business Ideas

Build your own brand (and stop reselling!)

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Take control of your own branding

I used to think that every “brand” was supported by its own factory and an army of in-house employees. I was wrong. Branding your own product doesn’t mean you need to design and manufacture it yourself.

Rolls of frabric with prototype clothing in background

Of course, most brands partner with factories, freelancers and agencies for extra support. But many others use white label designs straight from a factory. Here’s how it works:

  1. You find a manufacturer with a product design you like
  2. Add your brand name on it
  3. Sell it as your own

Sometimes there’s simply no need to design a product from scratch. There are plenty of well-designed products out there that just need a brand to sell them.

Where can you source white label products?

You can use sites like Alibaba and AliExpress to find pre-designed products ready for your brand name. No need to invest in product development, which can take months (or sometimes years) before a final sample is ready for production.

This Reddit post shows you how to use Alibaba or AliExpress to build your own brand step-by-step with just $1,000, a little imagination and a healthy amount of drive and ambition.

White labeling gives you so much freedom compared to reselling other brands’ products.

It can be the stepping-stone you need to put your brand on the map — even if you do end up reselling in the future or invest in R&D for products down the line.

1. Building your own brand means having control

When you buy stock from other brands to resell on your website, you’re not in control. They are able to dictate things like:

  • Singular keyboard buttons on blue background that spell CTRLSingular keyboard buttons on blue background that spell CTRLThe price you pay
  • Whether you can discount it and for how much
  • How you can and can’t market it

When you start your own brand, you have control. If you source directly from a factory, you can afford to drop prices to undercut competitors, while still making large margins. The tough design decisions have already been made, but you still get to make the product yours by customizing its look and adding your branding.

Where the brand goes in the future is up to you — it’s your adventure!

2. It reduces competition

Selling other brands’ products seems like an easy way to get rich. But often, you end up competing against other companies selling the exact same products. It’s not easy.

When starting your own brand, you’re the only one selling the products with your name on them, so you can build your own reputation.

For example, if I sell Beats headphones, I have to compete against all the big names already selling them. Those bigger companies can undercut me because they buy the headphones in bulk, which means they can sell them at a cheaper price.

So without competitive pricing, I could be crowded out of the market altogether. There’s just no way for a one-person company to achieve meaningful success by selling Beats headphones.

Black headphones laying on white desk

Black headphones laying on white desk

That said, if I launch my own brand of headphones called Nick’s Brilliant Headphones, I’ll still be competing against other companies making headphones. However, I’ll be the only person in the world selling Nick’s Brilliant Headphones.

With proper branding, some good reviews and the ability to maintain a good reputation, I could be on my way to the top.

3. It’s a stepping-stone to success

Perhaps you’ve heard of the popular saying, “Mighty oaks grow from little acorns.” The understanding of this quote means that sometimes something grand can stem from a small venture.

It doesn’t matter if you start out selling water bottles you bought on Alibaba, then rebrand them in your living room. After all, Jeff Bezos started Amazon out of his home.

The biggest brands have humble beginnings. There’s no telling how far you’ll take your brand once you get off the ground.

You could be importing en-masse from factories this year, developing your own products the next and building your own factory in five to ten years. As your brand reaches more people, it’ll gain recognition and loyalty. You’ll be able to take the brand wherever you want from there.

Importing products and adding your brand name to them may seem primitive, but it’s the first step to success and ownership over your future.

4. You can become the distributor

Today, you might approach Beats by Dre to resell their products. But instead, imagine if people approached you to sell your product?

You still get a cut of every sale, but you also get the following perks:

  • Increased brand exposure
  • Added benefit of a new revenue stream
  • No burden of selling to customers all by yourself

You can go from begging other brands to let you work with them to the person whose products everyone else wants to stock.

I know several companies whose products are stocked in brick-and-mortar stores — and they all tell me it adds cushy extra income. There are always people who prefer to shop in a store or buy important last minute purchases in-person so they don’t have to wait for delivery.

5. Increase profits by cutting out the middlemen

If you resell products from an existing brand, you pay a wholesale fee to them. This helps cover their margin, plus the cost of the product, but may leave you with a lower profit.

Scissors next to orange thread and measuring tape

Scissors next to orange thread and measuring tape

If you start your own brand and sell it online, you only pay the manufacturing costs and any import and shipping fees.

That wholesale fee you would’ve paid another brand is money in your pocket.

You can then afford to undercut other sellers of similar products, while still maintaining a great margin.

It’s time to build your own brand

There are many merits to selling other people’s products. But the advantages speak for themselves when you have:

  • Time
  • Determination
  • Personal drive to start and build your own brand

And with white labeling, it’s easy to get started with a small investment.

Save the time and effort of marketing someone else’s products and promote your own instead. It could be the start to your brand becoming a household name.

Have thoughts on building a brand? Share them in the comments!

Image by: Mediamodifier on Unsplash



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