Business as usual?
Most business owners tend to plan for slow trading periods however consider a total collapse or disruption to their business as less likely to happen and as a result, fail to plan for this.
"Whether its floods, fire, theft, a power cut or just the booking system going down, business disruption can be extremely costly and salons need to have a business continuity plan in place”, advises Heidi Morton, Senior Salon Insurance expert for Coversure Insurance Services.
The Chartered Management Institute estimated weather disruption alone can cost the average UK business £52,000, with staff illness, failing IT systems and disruption to telecommunications the next most common business continuity issues.
Coversure Insurance Services recommends that you devise a Business Continuity plan as an essential part of your salon’s business plan by considering the following steps:
Step 1 - The five Ps
Your business can be broken down into five “Ps”:
- People – Key staff, expertise and training
- Processes – IT, systems and communications
- Premises – Buildings and equipment
- Providers – Suppliers and contractors
- Profile – Reputation and statutory and legal considerations
Paying particular attention to the assets and processes that are critical to the running of your business, consider how your business will respond and continue to operate following an incident in any of the five P areas and devise a plan on how you will return to “business as usual” in the quickest possible time.
Step 2 – Presentation
Your Business Continuity plan should set out a managed process and provide a framework to allow you to provide continuity of service to your clients. It should be clearly presented and easily understood, avoiding internal abbreviations and jargon.
Step 3 – Storage
The plan should be stored somewhere people can easily find it, and you should also keep a copy off site. It is a good idea to create back-ups of any saved material on external devices. This will ensure all data is up-to-date and can be accessed following an unexpected incident, though it is also important to ensure such external devices are safe and secure.
Step 4 - Business Interruption insurance
Most business owners take out property insurance to cover their buildings, stock and equipment, yet fail to protect themselves against the potentially crippling impact of the business being temporarily out of action.
The difference between Business Interruption insurance and Property insurance is that property insurance will only cover the physical damage to a business following a disaster, while business interruption insurance will provide additional cover, for example covering the profit that would have been made if there had been no interruption. It will also cover additional costs such as having to relocate temporarily, hiring replacement equipment or even advertising that it is still “business as usual”. Another advantage is the protection it offers for indirect disruption. For example, if a salon is in a shopping centre and customers can’t access it because of a fire at another part of the centre.
It is therefore advisable to take out Business Interruption insurance on top of your basic property insurance. If you are insured through Coversure’s SalonSure, business interruption is included as standard within your insurance policy.
As with all insurance, it is worth seeking advice from a broker to find the best policy that matches your needs. Coversure Insurance Services are NHF’s recommended insurance provider. We offer professional and friendly advice and competitive premiums with a 20% discount for all NHF members.
Heidi Morton, Administration Manager, Coversure Insurance