Layoffs and Innovation Drive Small Business Startups
New research from small business insurer Hiscox finds that:
- 15% of startups launched as a result of layoffs and,
- 80% of new small businesses were created based on improvements to existing ideas
JUNE 21, 2011 – NEW YORK – With unemployment rates now at 9.1 percent in the U.S.1, new research by specialist insurer Hiscox has found that 15 percent of small businesses were established following a layoff. It also found the majority of startups are not original ideas, but are based on new approaches to existing businesses.
Key findings included:
- Being your own boss and living the dream: Half of small business owners cited either being their own boss or living their dream as the reason for taking the risk and starting their own business, with 29 percent wanting to be their own boss and 21 percent wanting to live their dream.
- Not new, just better executed: Eighty percent of small business owners and operators surveyed said that their business idea was not new, but an improvement on existing offerings. Over half (51 percent) reported that offering a higher quality of service or product than their competition was their key differentiator - rather than lower prices. A further 20 percent differentiate themselves by investing time in meeting face-to-face with clients. However, for startups there was a low investment in R&D (6 percent) and even less in marketing (3 percent).
- Million dollar idea: Nearly a quarter (24 percent) believed they had a 'million dollar' idea when founding their business. After taking the leap, more than two-thirds (69 percent) now feel confident or very confident that their business is indeed the 'million dollar' idea.
“Whether it’s due to a layoff, or to pursue a life’s passion, entrepreneurs are starting businesses to take control of their own destiny. Also, they don’t need to invent the next new hot idea, but need to put in hard work and provide higher quality service than the competition to succeed,” said Kevin Kerridge, small business insurance expert from Hiscox. It is important that small business owners use proper planning to protect their million dollar idea and reduce their risks while they grow their businesses.
“Starting up can be scary, but if you work harder than the competition, understand your risks and keep believing in your idea, you can succeed.”
Designed specifically for the small business and home-office market, Hiscox small business professional liability insurance coverage (errors and omissions insurance) is customized for a range of knowledge-based professions including IT, management consulting, business consulting and marketing. Hiscox offers professional liability insurance quotes direct and online in real-time along with other liability insurance products such as general liability insurance. Hiscox’s licensed insurance advisors are solely focused on helping small businesses with their insurance needs.
Hiscox profiles the life of startup entrepreneurs in the critically acclaimed Leap Year web series, running through August 8 on www.leapyear-hiscox.tv. Hiscox’s online offering is backed by experienced, licensed advisors based at the Hiscox Small Business Insurance Customer Service Center in Virginia Beach, VA.
Learn more about Hiscox Small Business Insurance, or speak with a Hiscox licensed advisor at (888) 202-3007 (Monday through Friday, 8:00 AM – 10:00 PM EST). Hiscox is also now on Twitter, Facebook and LinkedIn.
Notes to Editors
Hiscox commissioned research with Opinium Research among 304 owners, partners and senior decision makers from US companies with 1 to 249 employees between the 18th of May and the 1st of June 2011.
1Source: United States Department of Labor, Bureau of Statistics.
About Hiscox in the U.S.
Hiscox, the international specialist insurer, is headquartered in Bermuda and listed on the London Stock Exchange (LSE:HSX). There are three main underwriting parts of the Group – Hiscox London Market, Hiscox UK and Europe and Hiscox International. Hiscox International includes operations in Bermuda, Guernsey and the USA. Hiscox ASM Ltd, Hiscox Underwriting Ltd and Hiscox Syndicates Ltd are authorized and regulated by the UK Financial Services Authority. The ability of syndicates at Lloyd’s to do business in the USA and its territories is restricted as they are not US-based insurers.
Hiscox Inc., a Delaware corporation headquartered in New York, d/b/a Hiscox Insurance Agency in CA, is a licensed insurance intermediary for admitted and surplus lines business. Hiscox Inc. underwrites on behalf of, and places business with, Hiscox Insurance Company Inc., other domestic insurers, and syndicates at Lloyd’s (www.lloyds.com). Hiscox Insurance Company Inc. is a Chicago, IL domiciled insurer which is admitted or licensed to do business in all 50 states and the District of Columbia.
Inquiries as to insurance, products or services, other than those offered by Hiscox Small Business Insurance, should be directed to an insurance agent or broker licensed to conduct business in the relevant U.S. state. For further information about an insurer’s ability to do business in the USA and US territories please contact a licensed agent or broker for advice.
This communication provides general information on Hiscox’s products and services only and, except with regard to Hiscox Small Business Insurance, is not intended to be, and does not constitute, a solicitation of business by syndicates at Lloyd’s from or in respect of the USA or U.S. territories. The information contained herein is not a part of an insurance policy, and may not be used to modify any insurance policy that might be issued. In the event the actual policy forms are inconsistent with any information provided herein, the language of the policy forms shall govern.
About Hiscox Small Business Insurance
Hiscox is the first company in the U.S. to offer insurance coverage for professional services businesses with 10 employees or less direct, online, and in real-time. We provide professional liability, general liability and business owners insurance, underwritten by Hiscox Insurance Company Inc. We also offer workers' compensation insurance provided by EMPLOYERS®. Hiscox Insurance Company Inc. is rated ‘A’ (Excellent) by A.M. Best Company.
About Employers Holdings, Inc.
Employers Holdings, Inc. (NYSE: EIG) is a holding company with subsidiaries that are specialty providers of workers' compensation insurance and services focused on select small businesses engaged in low-to-medium hazard industries. The company, through its subsidiaries, operates coast to coast. Insurance is offered by Employers Insurance Company of Nevada, Employers Compensation Insurance Company, Employers Preferred Insurance Company, and Employers Assurance Company, all rated A- (Excellent) by A.M. Best Company. Not all insurers do business in all jurisdictions. Additional information can be found at: http://www.employers.com.
EMPLOYERS® and America's small business insurance specialist® are registered trademarks of Employers Insurance Company of Nevada. Workers’ compensation Insurance is offered through Employers Compensation Insurance Company, Employers Insurance Company of Nevada, Employers Preferred Insurance Company, and Employers Assurance Company. Not all insurers do business in all jurisdictions.
Coverages are subject to underwriting and may not be available in all states. As of December 31, 2010, Hiscox Insurance Company Inc. had admitted assets of $63,021,985 and policyholders surplus of $52,782,927. Total liabilities were $10,239,058 (inclusive of $4,731,628 in reserves) and paid up capital stock was $4,200,000.
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About Hiscox small business insurance
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