No matter how careful you are in running your business, accidents happen. And no matter how big or small your business, you’ll have to plan for these and other risks if you want your business to thrive. One way to do this is with insurance.

Imagine this: Your custom-made cabinetry business is thriving. You have a handful of talented employees and a stack of orders. Then, the unthinkable happens. You or one of your employees is severely injured using the equipment. Or a fire damages all of the cabinets you’ve spent the last few months building. Or a customer calls to tell you that the new cabinets you installed yesterday just fell and crashed onto her kitchen floor.

Protect your business from physical destruction

Your business is situated somewhere–an office park, a warehouse, a barn. And just like your home, this structure (and all of its contents) is susceptible to damage from many causes. Property and casualty insurance provides coverage for losses due to the physical damage or destruction of your business. With the right policy, neither fire nor exploded boiler can put you out of business. Everything from your office building to your cabinets to your water cooler can be covered.

You can buy various types of insurance protection separately, or you can purchase one package that covers many potential hazards. Among the forms of coverage you can purchase are:

• Building and equipment insurance: This protects you if your facility or equipment is damaged or destroyed
• Valuable papers insurance: This protects you if the documentation supporting your accounts receivable or other valuable business records is lost or destroyed
• Crime insurance: This protects your business in case of theft
• Business interruption insurance: This protects you by replacing some or all of your operating cash flow if your business is unable to maintain its normal operations for a period of time due to a covered event

Keep your business afloat if you or a key employee dies or becomes disabled

If you were to die prematurely or become permanently disabled and could no longer work, would your business survive financially? It’s easy to believe that such a tragedy won’t befall you. But remember, accidents happen not only on the job but also at home, and illness can strike anyone. Though the death or disability of an owner may be a minor issue for large businesses, small businesses may find themselves in a bind. And if you’re a sole proprietor, you’re personally responsible for all of the debts of your business, so everything you own could be repossessed if you’re unable to pay your bills.

To survive a money crunch, your business can purchase life insurance and disability insurance to cover you, with the business named as the beneficiary. Upon a triggering event (death or disability), the policy will pay your business a certain amount of money, which it can use to cover its normal operating expenses like rent, utilities, employee salaries, advertising, and maintenance costs.

Your business can also purchase life insurance and disability insurance on a key employee–someone who is key to the success of your business (i.e., this employee brings in substantial accounts or has specialized knowledge or talent). Again, on the triggering event, your business would receive a sum of money to compensate for the lost income generated by the employee, or for the cost of replacing the employee.

Note: These types of policies are different from workers’ compensation insurance, which all states require businesses to have. Workers’ compensation insurance provides compensation to your employees if they’re injured at work or get sick from job-related causes. Once an employee opts to receive benefits under such a policy, he or she is usually prohibited from suing your business for the same injuries.

Protect your business assets if someone threatens or sues your business

If your cabinet installation goes awry and your best customer (or so you thought) calls screaming at you on the phone, what will you do? With a liability insurance policy, the insurance company will pay (up to policy limits) third parties who claim they were injured or their property damaged by your product or service. If a lawsuit is threatened or filed, the insurance company will hire and pay (again, up to policy limits) a lawyer to defend you.

You can purchase general business liability insurance separately or as part of a commercial package policy, which combines this coverage with other types of coverages, such as property and casualty insurance. Certain small businesses, including retail outfits, can buy a business owners policy, which includes a general liability insurance line. If your business needs broader coverage or higher liability limits than these policies offer, you can purchase supplemental liability insurance with a commercial umbrella policy.

An important point: If you provide professional services (e.g., doctor, lawyer, accountant), a general liability policy doesn’t cover you for losses incurred by third parties arising from your professional acts. In this case, you may need to buy professional liability insurance such as malpractice insurance, which protects you against liability for injury done to others due to your misconduct or lack of skill; or errors and omissions insurance, which protects you against liability for things that you did improperly or failed to do.

Attract and keep employees with insurance-related employee benefits

Nowadays, insurance is a crucial component of most employee benefit packages. In fact, the types of insurance that you offer (and pay for) might be a key factor in a person’s decision to accept a job with you or an employee’s desire to work for your business long term. Insurance helps employees feel secure, and this security can translate into loyalty and strong job performance. Here is a list of group plans that you might decide to offer as part of your employee benefits package:

• Health insurance
• Dental and vision insurance
• Life insurance
• Disability insurance
• Long-term care insurance

In each case, the employee receives all of the benefits under the policy.

As someone who has been called a serial entrepreneur, I’ve had more than my fair share of experience starting new enterprises, turning around underperforming enterprises or re-vamping operations.

During that time, I’ve learned a thing or two about some critical factors you absolutely need to know before you jump into the proverbial entrepreneurial waters.

In the majority of cases, start-up success or failure is all about knowing the both the how and the why of taking action, and always being clear about which steps to take next.

To help this process, here are 10 essential things you need to know about running a successful business. Use it as a checklist to make sure your thinking and your business plan are on the right track, or if you need to get more information, strategic education or clarity for yourself on your overall vision, your market, or your product or service.

1. Offer what people want to buy, not just what you want to sell.

   Too often, people jump into a business built around a product or service they think will be successful, rather than one that is already proven to have a market.

   What do I mean?

   Instead of creating and selling a new sports shoe with the latest trendy design and materials, you’d be much better off from a business perspective to focus on shoe category generally (a proven category because which people buy shoes every day) and then focus more specifically on the niche of high performance sports shoes, (which you may even sell in a section of a shoe retail outlet). Better to have a small slice of a large category than a large slice of no market at all.

2. Get cash flowing ASAP.

   Cash flow is the lifeblood of business, and is absolutely essential to feed bottom-line profits. So you need to find ways to jump start cash flow immediately.

   How do you do that? In a professional services business, you can ask for deposits on work up-front, with balances due on delivery.

   You can do the same in retail, especially on high-ticket or specialty item and position it as an added value and a way to insure delivery by a specific date.

   You can also add value to generic items by creating private labels, and develop continuity programs where customers pay an up-front monthly fee to insure delivery or availability of items they will buy on a repeat basis. Of course, the key is to make sure there is little or no gap between when you pay for labor, stock inventory and when you actually get paid. Ideally, you’ll find ways to get money up front, and your cash gap will never be an issue.

3. Always find new ways to keep costs low.

   All the cash flow in the world is worthless if it’s not positive cash flow, which means you have to bring in more cash than you pay out.

   To do this, you need to keep your costs and expenses low. We’ve touched on this before, especially in terms of outfitting a startup. The main idea is to never pay retail , and look for used or gently used items to furnish your office or your retail space.

   Paying vendors up front also gives you leverage for negotiating better prices. Especially in this economic environment, where credit is at a premium, vendors are more willing than ever to find creative ways to finance transactions, and that is a trend will likely continue over time.

   So do some extra work and research now to discover how owners and vendors are finding ways to work out deals, and you just may hit on whole new ways of doing business.

4. When planning, always overestimate expenses and underestimate revenues.

   I was trained as an accountant, so the numbers side of business is part of my entrepreneurial DNA, and was also a big part of my early business education.

   That said, I’ve never seen a startup business where expenses were at least 30 percent more than initially planned or anticipated, and revenues are at least that much less.

   Being conservative in your numbers doesn’t mean you are willing to accept those numbers, it just means you are arming yourself with information you can work with and work over. It means you can gauge the kinds of efforts and activities you will need to put into sales and marketing.

5. Focus on sales and marketing manically.

   In business, nothing happens until a sale is made. From the jump, you’ll need to find a good way to get leads, convert leads into sales, and make sure you keep getting repeat sales from your customers.

   The way to do this is to find or create a marketing and sales funnel system that you can work, test, measure; one that anyone in your company can utilize.

   Too many entrepreneurs focus on getting their brand right before they start to generate leads. That is exactly the wrong way to go about business. Leads are always more important than your brand, so don’t waste money getting your brand right at the expense of spending that same money to buy new customers.

   Soon, you’ll discover you can build your brand from the ground up, versus spending years and hundred of thousands of dollars building it from the top down. Don’t presume you’ll even survive that long, because without leads, you won’t!

6. Find ways to exponentially increase profits.

   In business, there are five drivers that impact profits. If you can master them while keeping your costs in check, you will run a successful business.

   It’s as simple as getting more leads, converting more leads into customers, increasing the number of times those customers buy from you, increasing the average price point of your sales and increasing your profit margins.

   Do any one of those, while also keeping costs down, you will see more profits. Do all of them and you will see your business really take off.

7. Test and measure everything.

   You can’t change what you don’t measure, and you can’t tell if a program or strategy is working if you are not faithfully testing, measuring and tracking your results.

   Another way to look at this is to think in terms of doctors. Most like to get baseline stats of your heart rate, blood pressure and breathing before they delve into identifying symptoms or recommending corrective courses of action.

   The same is true in your business. Why keep literally throwing money away on an ad campaign that costs thousands of dollars but doesn’t bring any people through the door?

8. Accept that learning more equals earning more.

   If you’ve never run a million dollar business, you don’t know how to start a business–simple as that.

   But you can learn to run one, even if it is your million dollar business you are building from the ground up.

   However, you need to accept right now that learning always comes before “earning” (except in the dictionary). You’ll need to be committed to learning as much as you can about sales and marketing and operations if you want to have a truly success business.

   Once you do that, however, the sky is the limit. Knowing and applying those simple fundamentals in a highly leveraged way is one of the reasons many top executives and entrepreneurs earn so much.

   Identify those areas and you then can decide to learn it yourself or hire an expert and learn as much as you can from that person–because you never know when you can run across a distinction in thinking or a strategy that can really take you and your business to a new level of success.

9. Don’t discount, add value.

   Whenever you discount, you are taking money directly out of your pocket and directly from your bottom-line profit. So don’t do it. Instead, create added value propositions all the way up and down your product or service line.

   Whatever the industry is, look to hold your price points, increase your margins with the low-cost or no-cost extras and any kind of freemium offerings.

   In the end, those little things won’t cost you a lot, but will build up tremendous goodwill and word-of-mouth with your customers and customer base.

10. Get a coach.

    Even if you don’t get a business coach at first to help you and guide you in your planning and operation, get someone who is objective and outside of your business you can rely on for nitty gritty business advice and to hold you accountable to getting results.

    Too often, we think we have all the answers and are the only people who can really get things done. The reality is that another set of eyes can work wonders for how you operate both on and in your business. An outsider can also make sure you are getting the numbers you need both on the top line and the bottom line to survive.

I hope this initial checklist will be valuable in helping you clarify your thinking and helping you prioritize some activities in your planning and start up mode.

I like to say there are no mysteries in business or in life, there’s just information you don’t know yet.

So prepare as well as you can, knowing you will need to make changes and corrections. But armed with the right strategies up front, you can cut the time it will take you successfully get to your ultimate destination–wherever it is that may be for you and your business.

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