What sort of risk management practices do you use for your handyman business? If the answer is little to none, you’re in luck.
Risk management is something that every business -- from a one-man operation to the biggest corporations -- can benefit from.
If you know how to combine basic risk management principles with some affordable handyman insurance, you have a blueprint that may lead your handyman business towards growth and increased profits.
Here’s what you need to know.
Protecting Your Handyman Business: Risk Management 101
If you offer handyman services, you’re a business owner. And there’s a chance you may be a sole proprietor of your business, which means your personal assets are vulnerable to any debts or obligations that arise from your handyman business.
In other words: managing your handyman business risks can protect your personal assets, such as your savings and even your home.
Risk management is the practice of identifying potential risks you may face while running your handyman business, analyzing them, and taking the necessary steps to minimize their impact.
Risk Management Steps to Protect Your Handyman Business
- Identify Risks
- Measure Risks
- Control Risks
- Transfer Risks
Identifying the Risks You Face as a Handyman
The first step in risk management is determining what risks you specifically face while operating your handyman business.
Let’s say you’re involved in an auto accident while driving your work vehicle on your way to a job. Your business name is very prominently displayed on the sides and back windows of your truck, which had all of your tools and equipment needed to complete the day’s work.
Not only could an auto accident cause damage to your own vehicle, damage to someone else’s vehicle, and lead to the possibility of injuries and medical bills… it could also destroy the tools of the trade you’ve spent years acquiring.
An auto accident can happen to anyone at any time, but you face some other risks while you operate your business, as well.
Let’s say you are inside a client’s home repairing drywall, and you have to move a large piece of furniture to complete the repair. After the work is done, the client complains that you’ve damaged their antique serving table and scratched their imported hardwood floors in the process. Third-party property damage is a risk you face every time you walk into someone else’s home to do a job.
Accidents, property damage, injuries, lost equipment… identifying your risks is the first step in managing them.
Measuring and Controlling Risks
The next steps in risk management include measuring and controlling your handyman business risks.
Measuring a risk: Determining what the likelihood is of a risk occurring, and what the potential results would be if it happened.
Let’s look at the above-mentioned auto accident scenario again. According to the National Highway Traffic Administration, an auto accident happens every minute on the road. As many as 20-50 million accidents every year. And the cost of repairing or replacing your vehicle, a third-party vehicle, paying medical bills, and replacing damaged property could run in the tens of thousands of dollars. So this risk measures as very likely to happen, and very costly.
Controlling a risk: Taking steps to reduce the likelihood of a risk occurring.
So how do you control the risk of an auto accident from happening? You take measures such as fastening your seatbelt, removing distractions, and driving safely.
If you want to control a risk of damaging customer property, you may do things such as removing your work boots inside someone’s home, using care when moving furniture, and applying drop clothes before painting.
Transferring Risks with Handyman Insurance
No matter how many precautions you take to control a risk, there’s a good chance you won’t ever be able to completely eliminate the possibility of an unexpected accident or event occurring. Some risks simply can’t be controlled.
These risks should be transferred to insurance coverage that will act as a protective safety net for your business.
No matter how safely you drive, you can never eliminate the chance of an auto accident. If you have commercial auto insurance, however, you can transfer that risk to your insurance policy.
No matter how cautious you are when performing your work, there will always be the risk of a third-party injury or property damage occurring. If you have general liability coverage, you can transfer that risk away from your handyman business.
How does Risk Management and Handyman Insurance Lead to Business Growth?
Now that you’ve got the basics of risk management down, it’s time to get to the big payoff.
Lower Insurance Rates
Certain risk management techniques could lead to lower rates, or a “credit” on your insurance policies. Your attention to risk management can literally put more cash back into your pocket in the form of savings on your insurance rates.
And the longer you go with continued coverage (no lapses!) and no incidents, the more you may be able to save on your insurance rates.
Increased Cash Flow
The biggest payoff to implementing risk management and adequate insurance coverage for your handyman business is keeping your hard-earned cash where it belongs - in your bank account.
Instead of paying out-of-pocket for unexpected incidents and accidents, you can use your cash to grow your business.
- Invest in digital advertising
- Build a website
- Hire an employee
- Purchase new tools and equipment
One final perk to implementing risk management and handyman insurance: getting more business. When you advertise your insurance coverage, or tell potential clients the safety measures you use as part of your risk management practices when performing work inside their home, you are going to stand apart from the competition. Potential clients will appreciate your professionalism, and your business will continue to grow.