No company wants to close its doors after only a few years. However, without the right preparations, business owners will find it more difficult to remain open. As technology continues to evolve, and natural disasters and other unforeseen events remain a possibility, having a comprehensive insurance policy is a necessity for small and medium-sized businesses.
A recent contribution piece in Forbes examined the data, and said that a major reason smaller businesses fail is that owners are slow to adapt to change. Most company heads will stick to their core ideology and try to conserve cash by waiting for "more proof" to see if technological innovations are actually necessary investments.
According to data from the Census Bureau's Business Dynamics Statistics, smaller businesses are less likely than their larger counterparts to find success and stay profitable over the years. Specifically, the five-year survival rate for a retail-based business is 41.1 percent, while construction is just 36.4 percent.
The Forbes piece added small companies cannot afford to keep ignoring areas like digital marketing and the increase in mobile device popularity - such as bring-your-own-device (BYOD) trends.
"[Small businesses] can seize new innovations faster, and leverage them before larger competitors," the article explained. "But as long as they cling to old practices and processes, and beliefs about historical markets, they will continue to fail: smashed under the heel of slower moving, bureaucratic large companies that have larger resources when they do finally take action."
Regardless of the industry, business owners must make sure that they have accounted for every possibility - positive and negative. Working with commercial insurance specialists can help company heads find the best policy for their organization's daily operations.