June 2012.pdf - RCSA

BUSINESS MANAGEMENT ISSUES
Do you make important purchasing
decisions This one could save you!
Ever bought a house, or
even a car for that matter
Yes, well let’s think about
how you went about that
important, and costly,
purchase. You no doubt
started by thinking about
your needs, two bedrooms
or three, sedan or hatch
This is a critical step in the
buying process as it helps
you identify what is
important to you, the buyer.
It also helps narrow down
your search by removing
any of the unsuitable
options that only serve
to distract you from
your objective.
Now you narrow it down further
by thinking about the features
and benefits. A pool Yes please!
Or maybe that Bluetooth connection you
just can’t do without. Thought about price
yet Probably not, because you’re in that
blissfully ignorant stage of the process that
has you thinking more about what you want
rather than what you can afford. Human
nature shows us that while price is important,
it’s not the be all and end all.
Now you’re into the home stretch of the
buying process and you’ve got a mental
picture of what you want. If you’re like me,
that’s a shiny new Range Rover with all the
fixins’ probably retailing for $100,000 plus
but I’m not in the real world yet, so that’s OK.
Nuts and bolts time: while price is definitely
a key stage in the buying process, its weight
on your decision will very much depend on
what you are buying. A litre of milk will see
you purchase the cheapest option because
all milk is the same right If you are buying a
house or car, your buying price will be much
more flexible: $20,000 more for the right
choice is not a problem.
If you are like me, you love watching those
reality property shows, particularly the parts
of the show when Mr Smith over there
declared, “Not going to buy that for a dollar
over $800,000”. Two minutes later, old mate
Mr Smith is the proud new owner of a
$987,000 four bedroom, two bathroom
renovator in the not-so-nice part of town.
Why did he do it when the same Mr Smith
complained when the local Coles supermarket
was out of the home brand margarine Not
sure exactly, but I’m sure it has a lot to do
with human nature.
Why then do we make important buying
decisions for our business by starting at the
end, the price, and working from there
Price seems to be the key factor when
buying critical services for your business,
even though this could see you buying
something that does not fit your business
needs and potentially be completely useless
when needed most. Ever tried eating with a
plastic knife and fork Cheap to buy, looks
like a knife and fork, but completely useless.
Moving on to the title of the article, this
one could save you! I’m an insurance broker
so I can’t show you my face, but I can try
and save you from buying that plastic knife
and fork. So here it is – five questions that
could help save your business (in no
particular order):
• Identify your risks, ask yourself what it is
you are trying to insure against. Insurance
is there to help you in the worst case
scenario so that should be your starting
point. Do you have on-hired workers
If so, you will need cover that extends
to covering these workers at their host
(vicarious liability) – most policies do
not cover this as standard.
• Can’t answer the above That’s OK, that’s
what insurance brokers are there for. So
question two is, do you have the right
insurance partner for your needs There
are many to choose from but you should
be focusing on the ones who can serve
your business needs the best. Do they
understand your industry Do they have
a track record in your industry Have they
heard of the RCSA or have you seen them
at RCSA events If any of the answers are
“no”, then maybe you should look around.
• My mother used to say “If it looks too
good to be true it usually is”. Handy tip that
one, Mum. Ask yourself, if I was paying X
last year and now it’s Y this year and Y is far
cheaper than X, you should be asking why.
Now I was never a maths whizz but I know
the answer is not stick-my-head-in-thesand.
Unfortunately claims can’t be paid
against policies written on the back of a
beer coaster, those days have long gone.
• What do I want to get out of my chosen
insurance partner There are options out
there for you to consider. Some will send
you the bill when it falls due and chase
you up when you don’t pay, but don’t offer
much more. If that’s what you want, then
fine, but remember there are others that
can offer much more: personalised
service, insurer contract reviews, and
advice that goes beyond the traditional.
The choice is yours, so choose wisely.
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RCSA JOURNAL