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September 1, 2015 at 1:07 am #992723RaneMember
- Total posts: 2
Hi everyone, ive been loitering the forums for the past couple of years but never really had a need to ask questions.
I first started out as a sole trader five years ago in the paper craft business, unfortunetly i just could not make any profit so two years at a loss i closed down. I do no have the funds to open a store front so was selling solely online.
I then opened a totally different type of web store selling crystals and new age products. The first year i did not make a great deal of sales only about 4k but the last financial year it jumped to 19k wow was i stoked as i had put a huge amount of hours into making this work i had also put a huge amount of hours into the paper craft business but nothing seemed to work.
So since i now have a good customer base and more customers every week, i am wanting to expand into selling my own hand made soaps ( cold process & melt and pour ) and hand poured candles.
All my products have been tested long term and short term so i know how they perform ( just incase anyone thinks im a novice jumping into this )
I am going to apply for NICNAS today as they charge by the year starting in september.
I have approached an insurance broker but was not impressed by how exxy the insurance is just over $1200 including all the fees from them and the insurance for one year,and they only gave me one quote from one company. Plus it had a $20,000 excess payable for claims. The excess to me was really high i dont have cash like that lying around or could even come up with if needed.
I am on a part disability pension and every dollar to me is precious, and yes centrelink know of my business from day one incase anyone was wandering.
Just wandering if there are any other business owners in the same field that would have some advice to share or anything that would be wise to do at this stage. Any broker/insurance recommendations.
ThanksSeptember 1, 2015 at 11:43 am #1187757AnonymousGuest
- Total posts: 11,465
Congratulations on your success with the new business so far
We have some great insurance brokers here in the forum, and I hope some of them will pop in shortly and offer you some insight.
In the meantime, welcome to Flying Solo, and thanks for joining us.
JayneSeptember 1, 2015 at 11:15 pm #1187758FreeBeerMember
- Total posts: 20
My guess is that insurance broker either wasn’t trying very hard for you, or hit a whole bunch of the wrong buttons. $20,000 excess? WTH?!
I was surprised at how affordable public liability insurance was for me, and I’m in an industry where I could easily damage something or someone if I wasn’t careful. I pay about $40 a month for $5m cover with a $500 excess for property damage and $0 excess for personal injury.
Be careful about overinvesting in the startup stage. Insurance and accreditations etc are all very important, but there’s no point in having any of it if there’s no actual business going on. If you are selling at market stalls etc, and even online, many of your competitors won’t be paying those costs or even paying tax or declaring their income to centrelink. That’s obviously naughty, but it affects your business too so you need to find a way to stay alive until you have a real business.
The best way is to find an investor or a loan to get all this stuff covered, then go at it hard. If you are growing something from a small start (which is what it sounds like) I would say you can take an educated risk and hold off on some of that administrative investment until you have some cash flow. But don’t leave it too long.September 2, 2015 at 12:16 pm #1187759alliedibMember
- Total posts: 453
Certainly sounds like you are on a winner there with some pretty nice complementary products – it seems like a good niche market to be in.
As for your insurance – unfortunately public / products liability insurance for soap making is not the easiest to come across. A lot of insurers will shy await from it purely due the perceived risk regarding irritation etc – and when you mention that you are a small operator (usually home based) they keep running….
I can’t say much about how the broker you spoke to approached it, but it seems they may have gone straight to the ‘hard to place’ market (they are the ones that throw around $20,000 excesses) without looking more towards some of the mainstream providers which can accommodate smaller risks. Previously, I did some work for our agency arm where a goats milk soapmaker needed cover – 4 of the 5 insurers on my autoquote panel declined immediately but I was able to make some sense with the 5th insurer and finally place cover for the client (from memory the premium was less than $1,000 per year and the excess was only $500).
Happy to have a chat with you about the best way of obtaining cover – feel free to PM me if you would like to get in contact.
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