Newly released data from Equifax has stated that SMEs in their 4th year of operation are at highest risk of business failure.
Equifax is an information solutions company and provider of credit information and analysis in Australia and New Zealand. The company’s analysis of External Administration events in Australia in 2017 revealed that this is the most problematic time for Australian SMEs as they typically move into a growth phase at the four-year mark.
Justin Eley, Senior Product Manager, Commercial Risk at Equifax, stated that when businesses start growing, the volume and type of credit enquiries increase, and its risk of default or other adverse events rises in parallel.
“Pushing for growth or expansion in any business is a calculated risk, a large part of which is financial” – Justin Eley
Insurance For Your Growing Business
As your business grows, it is exposed to more risk. In order to ensure the continuing success of your business, you should consider your risk portfolio and identify ways to reduce the risks that your business is exposed to.
Having appropriate insurance in place is one of the most effective ways to manage your risk and ensure the continued success of your business. As your business grows, it’s important to regularly review and update your insurance program, because:
- The policies which previously covered your business may not be appropriate anymore
- You shouldn’t wait for an annual review, but rather speak to your insurance broker as your business changes in order to ensure your assets are always appropriately covered
Having insufficient cover can lead to the accumulation of high costs in the event of a claim, which can be enough to put some companies out of business. Insurance can be complicated and every business has different insurance needs, which continue to evolve with the business. As such, it’s important to have an ongoing relationship with your insurance advisor, who can help protect your business now and into the future.
Don’t hesitate to contact us for more information or advice on your business insurance or risk management strategies.