Safeguarding Your Foundations: Valuable Lessons for Small Businesses
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JEREMY MAGGS: It’s no secret that South Africa’s small and medium-sized enterprises (SMEs) are under constant pressure—from power outages, delayed payments, theft, civil unrest, and escalating costs. In what’s been termed the trust economy, reputation holds as much weight as revenue. Customers and suppliers prioritize reliability, and a single disruption can jeopardize years of hard-earned goodwill.
So, how can SMEs safeguard their achievements? Additionally, what part do brokers and insurance play in ensuring these businesses uphold their commitments? I’m currently speaking with Schaun Van Den Berg, the executive for alternative channel solutions at Old Mutual Insure.
Schaun, welcome! I’m keen to explore this notion of the trust economy. Could you elaborate on that and, more importantly, what it signifies for small businesses?
SCHAUN VAN DEN BERG: Thank you, Jeremy. Think of trust as a valuable currency in the industry.
If you’re a broker, your brand and reputation rely on every single decision you make.
If you let a client down during a claim process or as a result of a catastrophic event, that reputational harm impacts both you and the SME.
When a client is disappointed, it breaks the trust between them, the consumer, and the SME, irrespective of the reasons behind a failure to deliver.
Clients are less concerned with the reasons behind a delayed delivery; they simply perceive that you failed them during a critical moment.
That encapsulates the trust economy: lose your reputation, and you jeopardize your business.
JEREMY MAGGS: What you’re suggesting indicates that trust has become a form of business capital, comparable to cash reserves or assets.
SCHAUN VAN DEN BERG: Absolutely. Nowadays, lacking trust means you have nothing to bargain with.
People seek referrals, browse online reviews, and consult friends when considering an SME.
A strong reputation generally translates into repeat business and more clients. Conversely, without it, your business is prone to failure.
JEREMY MAGGS: Schaun, let’s discuss the connection between trust and the insurance sector. How can an uninsured event affect not only a balance sheet but also, as you mentioned, a reputation?
SCHAUN VAN DEN BERG: As I touched on earlier, simple incidents like a delivery vehicle being involved in an accident can disrupt the supply chain for critical goods. Failing to deliver your products on time due to unforeseen incidents can create a domino effect that ultimately impacts the consumer.
As a consumer-facing business, your reputation hinges on timely deliveries and quality products. A single failure can severely damage your business.
JEREMY MAGGS: One challenge in your sector is that many small businesses perceive insurance as a necessary evil. To maintain and build trust, you need to shift this perception. How do you go about doing that?
SCHAUN VAN DEN BERG: Education is key. Every business should regard insurance as a partner—not just a grudge expense.
You should collaborate with someone who understands your business and can identify critical assets and processes that could cause significant disruptions if something goes wrong.
You won’t be able to operate effectively without such support.
When incidents occur—just like needing a lawyer for legal issues or an accountant for financial queries—you’ll require solid insurance coverage and expert guidance at that time.
Approach it as a partnership. Begin with a broker who can adapt to your growing business needs and identify critical concerns. You don’t need to insure everything, but focusing on essential aspects can save you in the long run.
JEREMY MAGGS: It’s vital for brokers to customize coverage based on the everyday realities of SMEs, recognizing that these circumstances frequently evolve.
SCHAUN VAN DEN BERG: Exactly. As SMEs experience growth phases or contractions, insurance brokers possess valuable data from years of experience.
They can pinpoint where critical risks lie and offer insightful guidance. Moreover, risk management plays a crucial role in insurance.
It doesn’t mean transferring all risk to the insurer; rather, there are essential risk management strategies that can help mitigate potential catastrophes.
Brokers are trained to identify these risks and assist in navigating them effectively.
JEREMY MAGGS: As a final question, your main message is ‘Protect what built you.’ If you could offer SMEs one key piece of advice on maintaining trust in their growth journey, what would it be?
SCHAUN VAN DEN BERG: I would emphasize three key points.
First, ensure you partner with a broker who understands SMEs, takes the time to learn about your business, and can tailor solutions to your needs.
Second, collaborate with reputable insurance companies known for their reliability, low rejection rates, and excellent service, so when issues arise, you have robust support to help you recover.
Finally, choose a company open to technological advancements. As the world continues to evolve, ensure you leverage technology to enhance your service and help mitigate risks; these innovations can ultimately empower SMEs to operate more efficiently.
JEREMY MAGGS: That’s insightful advice. Thank you, Schaun Van Den Berg, for sharing your expertise as the executive for alternative channel solutions at Old Mutual Insure.
Brought to you by Old Mutual Insure.
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