Traditional wisdom teaches small businesses to partner with people whose services complement their own. If you’re a wedding planner, partner with a caterer. If you’re a landscaper, partner with a house painter, etc.

But to truly stay ahead of the competition, small-business owners need to think outside the box by initiating partnerships that dramatically increase the value that they offer their current and prospective clients.

Below is a guide to implementing three counterintuitive strategies that will expand your business reach and let you tap into new market segments through business partnerships.

Reach a New Audience Through Business Partnerships

Strategy #1: Go Where Future Clients Are Already Fans

In 2009, Chicago-based insurance company Aon signed on as the new sponsor of England’s celebrated Manchester United soccer team. Commentators questioned the connection.  Aon is strictly a business-to-business company, and the most visible part of a Manchester United sponsorship would be the addition of the company’s name to team jerseys.

But Aon stood by its decision. After all, millions of soccer fans wear those jerseys and the sponsorship would effectively turn them into what the company’s chief executive called “walking billboards.” Even better, Manchester United boasted a large fan base in Asia, one area where Aon was looking to grow at the time it secured sponsorship rights. This partnership allowed Aon to flood its future target market with its name, thus building brand recognition.

How to Make This Strategy Work For Your Small Business

Looking to expand into a new market? Join forces with a business that’s already serving that market, and you’ve got a friendly introduction to the people you want to serve.

One effective way to do this is to sponsor an event (such as a trade show, lecture series, workshop or conference) where a lot of your potential clients will be in attendance. These potential clients will be open to engaging with you because, in that context, you are not trying to sell to them. You can have an honest conversation and learn where their pain points are, which is information you can use to tailor your services to them down the road.

Strategy #2: Find a Partner Who Embodies Your Company Values

Last month, Insureon, the online business insurance agency of which I’m CEO, launched a partnership with Women’s MMA Bantamweight Champion Ronda Rousey. As with Aon, some people questioned the connection between a professional fighter and a company that sells small business insurance.

But to us, it’s clear. Like the small business owners we serve, Ronda Rousey works hard every day, often by herself, to be the best that she can. Though Ronda has only recently gained major media attention for her success in the ring, she has been toiling at her sport for years.  She often faced significant setbacks, including injuries and naysaying from league insiders who claim women have no place in professional MMA.

As a product of sheer determination, commitment and talent, Ronda has overcome these setbacks and is changing the face of her sport in the same way that America’s small business owners are transforming the face of the U.S. economy.

The partnership with Ronda has helped reinforce our commitment to supporting hard-working business owners in their grueling and often lonely journeys.

How to Make This Strategy Work For Your Small Business

Find a values-based partner to boost brand recognition by sponsoring a local little league team, charity event or community group. Associating your business name with people and events that reflect your values helps you build your image among potential customers and establish yourself as a valuable part of the community.

Strategy #3 Share Your Rewards Program

In 2012, Chase Bank and Southwest Airlines announced a partnership that let Chase cardholders transfer their points into Rapid Rewards airline miles with Southwest. The partnership came on the heels of a similarly structured Chase-United partnership the year before.

Why did this joint venture make sense for both companies? Because Chase and Southwest saw that their respective products (credit cards and flights) have massive target audiences and that their products and services are, in some ways, indistinguishable from what their competitors offer. In that context, increasing the value of a product or service is essential to maintaining customer loyalty and winning new customers.

Chase and Southwest did exactly that, and by doing so made it that much more appealing for potential customers to use their products.

How to Make This Strategy Work For Your Small Business

Just because you’re not a major corporate player doesn’t mean you can’t offer a major rewards program. Make this strategy work for you by setting up a system where clients can work toward a discount or freebie (you’ve seen this dozens of times as punch cards at ice cream shops), then increase its effectiveness by letting clients get credit for purchases made with your partner.

You’ll both benefit from increased loyalty and customer satisfaction.

How do you reach new audiences? Have you ever launched business partnerships to reach a new target audience or customer base?

Manchester United Photo via Blackberry

The post 3 Counterintuitive Ways to Reach a New Audience Through Partnerships appeared first on Small Business Trends.

As a small business owner, it’s essential to take advantage of these economic indicators to expand your operations and keep your business growing. And study after study shows that, by simply increasing employee engagement, business owners can improve nearly every area of their performance.

Why?

Because engaged employees have been found to lead directly and indirectly to:

• Decreased turnover rates.
• Higher operating income.
• Higher productivity.
• Fewer missed days.
• Increased customer loyalty.

In a recovering economy, these factors can make the difference between ho-hum growth and pedal-to-the-metal expansion. So how can you build employee engagement without hiring a top-dollar consultant or sitting through a weekend retreat?

Start with eliminating the physical barriers in your workplace.

How to Build Employee Engagement

Open-Plan Offices: Employee Engagement Machines

Studies of open office spaces show that they are effective at increasing employee engagement. I see this research confirmed on a daily basis thanks to the open-plan office I work in.

The benefits of an open office space include:

The Ability to Share Great Ideas With Each Other

I’d love to take credit for all the great ideas in the office, but the truth is that many fresh ideas come from my team members.

Thanks to our open office plan, they can (and do) flag me down, point out a process or procedure that’s inefficient or not working and suggest a solution. Within a matter of minutes, we’re talking through improvements and making changes.

As CEO, it’s my job to recognize when one of my team members is being brilliant and then funnel resources to that person so he or she can make great things happen. This agility empowers everyone in my office to take ownership of what they do and initiate improvements when necessary – and that benefits the entire company.

Everyone Talks to Everyone

This builds friendships among the team, which boosts employee engagement. Members of my team have independently launched a basketball league, after hours get-togethers and office birthday celebrations.  All of which make the office a pleasant place to be.  When you spend the majority of your waking hours somewhere, you want it to be pleasant.

A side benefit is that everyone knows what’s going on in various departments, which prevents anyone from feeling as if they’re working in a silo. When everyone has an idea of how their work contributes to the greater good, it boosts internal motivation and productivity.

Accountability for the Work

No walls in the office means no slinking off to a cubicle to play solitaire or fritter away time on social media. When I can stroll by and ask for an update at any moment, my team knows they need to be ready to show me something good.

But this goes both ways: I’m also on the hook for being productive.

My team hears me talking to their colleagues, asking about the latest developments and offering feedback. We’re all constantly accountable for our work, which means we’re constantly pushed to produce the best work we can.

Successes Can Be Rewarded in Real Time

When one of our producers makes a sale, they ring a bell and folks in the office offer a word of encouragement. During our weekly office meetings, we acknowledge the work each department has done to move us forward. And I’m never shy about announcing to the entire team a particularly deft maneuver I notice someone making.

The promise of rewards for good work keeps my team motivated and makes them feel valued when they deliver.

If You Can’t Show the Door the Door

So how can you improve employee engagement if switching to a more open office layout isn’t a possibility?

Go out of your way to show your team that they matter to you and to your business. Ask for their opinions about the work they do (and actually take what they say into consideration). Use face-to-face conversations instead of email when possible and hold your team accountable for what they do.

Reward them when they do it well.

As you improve the engagement of your staff, you can expect to see improvements in nearly every business indicator you track – no matter what happens in the larger economy.

Open Office Photo via Shutterstock

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As a small business owner, you collect customer data every day. And if you’re using the Internet, that data – along with all of your company’s sensitive information – is vulnerable to attacks.

Without the proper safeguards in place, your business could suffer a data breach that exposes sensitive information, disrupts your operations and opens the door to an expensive lawsuit.

Why Cyber Security Matters to Small Business

The majority of data breaches happen to small and mid-sized business. Surprised? Consider these chilling stats:

• About 40% of all cyber attacks are aimed at small businesses, but because smaller firms have fewer resources to devote to cyber security…
• More than 72% of successful data breaches happen in smaller companies.
• About 71% of small business owners admit to lacking confidence in their current cyber security measures.
• As many as 65% of businesses go without cyber insurance – even though many of them cite data breaches as their number one concern.

Even more troubling? The average cost of a data breach for a small to mid-sized business is a staggering $5 million.

Why Cyber Security Matters to YOUR Small Business

When a small business suffers a data breach, the fallout can be tremendous. A single breach can trigger a variety of financial damages, including:

• Lawsuits (and the attendant legal costs) from clients whose data and security were compromised. These alone can reach into the tens of thousands of dollars and beyond.
• Site repair costs to address security issues that allowed the breach to happen.
• Public relations and / or advertising costs to restore the company’s image among current and potential clients.
• Lost confidence and lost future business from current and potential clients whose confidence is shaken by the data breach.

Unfortunately, most small business owners believe that a data breach won’t happen to them, either because they have adequate protection in place or because their information isn’t worth stealing. In reality, hackers often see small businesses as prime targets because the data they store is typically less diligently protected than the data held by large corporations.

How Data Breaches Happen

In small businesses, data breaches can happen in a number of ways. Common scenarios include:

• Your employee opens an email that contains a damaging virus, which spreads itself to everyone on the employee’s contact list, including clients. The virus hurts your business’s computer system, as well as your clients.
• A virus compromises your company website, forcing you to redo the site and institute new security policies – which, of course, requires that you hire someone familiar with the relevant technology.
• A hacker finds a way into your system and outright steals data from your files.
• An employee who works from his tablet loses the device, which isn’t password protected, putting sensitive data at large. You now have to handle the data crisis as well as the fact that your employee’s productivity will likely plummet.
• A former employee who left on bad terms accesses your system and wreaks havoc internally thanks to unchanged passwords.

Any of these scenarios could cause your clients financial loss, open your business to lawsuits, force you to shut down operations while you address the problem and damage your reputation with current and prospective clients. The associated costs could quickly spiral out of control.

Luckily, you’re not completely powerless against the data breach risks your business faces.

Tips to Manage Your Cyber Security Risks

The good news is that there are several strategies you can implement to keep your risk of data breaches low. These include:

1. Using strong passwords. More than half of data breaches are caused by weak (aka “guessable”) passwords. Make yours strong and change them regularly.
2. Implementing virus protection, firewalls and encryption techniques. These all make your network less vulnerable to attacks.
3. Limiting information disclosure. Only give access to sensitive data to team members who absolutely need it.
4. Investing in cyber liability insurance. Depending on your needs, you may be able to purchase this type of coverage as an add-on to your general liability policy. If your business has bigger data security needs, you can purchase a stand-alone cyber liability policy. Either way, the coverage will pay for the legal and recuperative costs associated with a data breach that affects your company.

The takeaway? The Internet, data and all its accompanying risks are not going away any time soon. Do your business, your clients and your bottom line a favor by preparing for the risks you face before they cause serious damage.

Virus Photo via Shutterstock

The post The Smallest Businesses Face the Biggest Cyber Risks appeared first on Small Business Trends.

This means that small business owners are often skeptical of new products and services (decidedly a good thing). But it also means small business owners have a heightened need to mitigate the many risks they juggle. The right business insurance can provide excellent protection, but small business owners should understand the truth behind these insurance myths before deciding on their coverage.

1. You Don’t Need Errors & Omissions Insurance if You Only Provide Advice

As a subject matter expert, you can be held liable for any negative impact that your advice causes a business. In fact, even if your work simply fails to live up to the expectations you set, a client could bring a lawsuit against you.

E&O policies provide funding for the legal services required to defend yourself against claims of negligence, even if those claims are frivolous. This is essential, since the legal defense costs (including lawyer’s fees) are often the most expensive part of an E&O lawsuit – they can easily range into tens of thousands of dollars.

For example, consider a marketing consultant who tells a client he can help them increase marketing ROI in a six week time frame. Even if the consultant does everything right, the client could be engaging in practices that decrease ROI, and by the end of the contract, could have a lower ROI than they did prior to hiring the consultant. Without a carefully worded contract and proper Errors and Omissions Insurance, the consultant could be at risk of a lawsuit for failure to perform his services.

2. You Don’t Need Workers’ Compensation Insurance if You Are the Only Employee of Your Company

Some states (New York, Nevada, and Utah) require all businesses to carry workers’ compensation insurance. Translation: even if you’re a sole proprietor, you could still be required to carry workers’ comp, depending on where you live.

In other parts of the country, your coverage needs will depend on how many employees you have, how those employees are classified, and what kind of work you do. For example, some states do not require business owners to carry workers’ comp insurance for contract (1099) workers, but do require coverage for full and part time employees (W2). An insurance agent can clarify the laws for your industry where you live.

3. You Don’t Need Business Coverage Because You Work at Home

Actually, most homeowner’s insurance policies don’t cover business-related damages that occur in a home office. Too many home based small business owners find this out only after they go to file a claim.

Even if your homeowner’s insurance protects some of your business property, chances are good that that coverage won’t be in effect when you are traveling for work, whether that means running to a client lunch or flying across the country for a conference.

A simple general liability insurance policy or business owner’s policy can offer home based business owners the protection they need for both basic business property (such as laptops) and certain types of injuries clients can suffer (such as slander), whether the incidents occur at home or on the road.

4. You Don’t Need Business Auto Insurance Because You Drive Your Personal Car

Many personal auto insurance policies exclude coverage for commercial (a.k.a. business) use. That means if you get into an accident while running to Staples or the airport for your business, you might run into difficulties with your insurance provider.

The insurance needs for your car will depend on how it is primarily used. In other words, if you use it most often for business purposes (but sometimes for personal uses), it will likely require commercial coverage. If you use it most often for personal purposes (with the occasional business errand thrown in), it will likely require only personal coverage.

An insurance agent can explain this to you in more detail.

5. You Don’t Need Property Insurance Because You Work at Your Client’s Location and Use Your Client’s Equipment

Your property insurance needs will depend on the terms and conditions outlined in your client contracts. Some clients provide coverage for physical damages for work done at their locations, and some do not.

For example, imagine a contractor who repairs a client’s dishwasher but leaves the hose loose after finishing. Say the hose causes a flood at the client’s house; even if the client has flood insurance, the contractor’s insurance would most likely be responsible for covering the damages.

This is because insurance companies provide coverage based on who is responsible for a device or piece of equipment: if you are in charge or in control of the equipment, your insurance is likely responsible for covering any related damages.

6. Your Personal “Umbrella” Policy Will Cover Everything

Personal umbrella insurance will not cover everything. In fact, umbrella policies come with explicit limitations and exclusions. Read over your contract to determine what is and is not covered.

7. You Need Insurance for Each Client Contract

In many cases, your business insurance will be sufficient for multiple client contracts. There are some exceptions, though. fidelity bonds, for example, may need to be renewed for each new client, and contracts that involve high or complex risks may require supplemental insurance.

While it’s a good idea to verify that your insurance policies cover you for each new contract you secure, there’s a good chance you won’t need a new policy for every new client. Most policies define the services covered very broadly.

More likely, your insurance needs will change when you add new services, move the business’ location, or change the number of employees who work for you.

8. You Don’t Need Insurance Because You No Longer Have the Client You Purchased it For

Insurance protects you as a business owner. While not every client you work with will demand that you have coverage, carrying insurance regardless of your client’s demands puts you in a better risk-management position.

More important, though, canceling and restarting coverage as you need it may trigger red flags at insurance companies and can make it difficult for you to get coverage in the future when you need it.

9. If You Get Sued, You Can Simply Shut Down the Business

Closing your business will not necessarily protect you from a lawsuit. Courts tend not to care whether or not a business is currently operational. In a worst-case scenario, you could be required to cover settlements or judgments from your personal assets.

10. You Don’t Need Business Insurance Because Your Contract Protects You

Contracts are put in place to outline the specific terms of a project and delineate whether or not lawsuits are available. In the event that you breach your contract somehow (for example, by missing a deadline or failing to perform on a key deliverable), the terms of the contract could be voided, opening you up to a lawsuit.

As a small business owner, the health and future of the business is among your primary concerns. While insurance protects against an uncertain future, it gives you the peace of mind you need to plan and manage your business.

Insurance Myth Photo via Shutterstock

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