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Small Business Saturday: Are You Stocked, Set And Ready?

According to the National Retail Federation (NRF), holiday sales are expected to increase by 4.1 percent in 2012. While this could translate into higher profits for Main Street business owners, it also increases the importance of preparing for increased foot traffic, higher inventory levels, and more seasonal workers.

Travelers (NYSE: TRV), one of the nation’s largest insurers of small businesses, is helping small business owners across America prepare for this important time of year in an effort to ensure they are stocked, set and ready for the holiday season, in particular for Small Business Saturday® on November 24, between Black Friday and Cyber Monday.

“Small businesses comprise 27.5 million of the businesses 1 in the U.S. and employ about half of U.S. workers 2,” said Marc Schmittlein, President and CEO of Travelers Small Commercial Accounts. “Entrepreneurs are the backbone of our economy and it is important that we help them manage risk, prevent business interruption and prepare for high levels of business activity ahead of Small Business Saturday and the holiday season. Taking these steps to prepare now is critical to their success in a few weeks and beyond.”

In the final weeks leading up to the holiday rush, Travelers is urging business owners to take the following steps to get ready:

1. Ensure Proper Amount of Inventory Is on the ShelvesTo ensure that proper inventory is on store shelves, business owners need to consider all parts of the supply chain, including the geographic area from which their products are being distributed. For example, if a core product shipped from another country is lost, delayed or has limited quantities available, the bottom line can be drastically impacted. Business owners should get to know their suppliers to better understand where their inventory comes from, how to make special arrangements to fulfill peak inventory needs, and create a contingency plan if the supply chain is interrupted.

2. Protect the Products and Insure to ValueWhile it is critical that business owners know their inventory levels throughout the year, it is even more critical during peak times, such as Small Business Saturday and the holidays, when more stock is needed to meet sales demands. Business owners should insure their inventory based on peak levels, not on a standard or average. Doing so helps to ensure that merchandise is protected and insured to full value during the most important sales period of the year.

3. Protect the People Who Sell the ProductsAccording to the NRF, retailers will hire an estimated 585,000 to 625,000 seasonal employees during the 2012 holiday season. While hiring seasonal workers is necessary to help manage inventory and handle increased business, doing so presents potential unique risks and liabilities. In order to limit exposure, business owners should take the time necessary to understand the insurance needs that come with new employees and to on-board and train seasonal workers to help avoid on-the-job accidents.

4. Decorate WiselyDuring Small Business Saturday, many businesses will likely be decorated for the holiday season. Festive window displays and cozy interiors help bring in business, but without the proper handling or positioning, those decorations may pose safety risks to employees and customers. One of the easiest ways business owners can protect their operations from damage is by making wise decoration choices and placing them away from open flames and heat sources, such as light bulbs and heaters.

5. Build BackupsDuring the peak season, small business owners are focused on running their businesses, but what if something unexpected happens? According to a recent Travelers survey of small business owners, more than half do not have a documented plan to manage through an unexpected event, such as weather or theft. At a minimum, a backup plan should include: secondary suppliers; special delivery and discount options for customers; and a supply chain management plan.

6. Help Prevent Cyber RisksCyber risk insurance coverage is important for small business owners, particularly as many businesses are building up sales and storage functions digitally. Business owners should consult with their local independent insurance agent and risk advisor when considering the following questions to be sure they’re protected both in store and online:
  • Does your business have an online sales component? If so, are you protected against the increasing threat of cyber risks?
  • Is sensitive customer information stored on site? If so, there’s a chance it can be compromised and it needs to be protected by keeping it in a secure location.
  • Do you have adequate protection if your site or online sales tools are comprised?

Travelers also recommends speaking with an independent insurance agent and risk management professional to help stay protected with a comprehensive insurance and risk management program.

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