The greatest risks for the self-employed and start-ups

Self-employment brings a great deal of freedom, either in how you structure your daily working life or realize your professional visions. But it also brings risks. For start-ups and sole proprietorships, entering the world of business can quickly result in problems if unexpected challenges occur.

The most common reasons for self-employed businesses to fail are: lack of liquidity, lost earnings due to accident or illness, legal or liability cases or property damage that prevent you from operating. Business owners also risk having less financial freedom in future by failing to understand their own  retirement provision . To ensure that your self-employment is not jeopardized, you should avoid these risks and protect yourself against them in good time.

1. Volatile income and liquidity bottlenecks

While employees can plan with a fixed salary at the end of every month, the income for the self-employed sometimes varies sharply. A variable order book, limited resources and market price wars can cause you financial hardship. To avoid volatile income streams that threaten the existence of your business, AXA offers various solutions to help you.

Read our blog ʺSelf-employment in Switzerland: cost overviewʺ for more information

AXA’s solution

• Liquidity planning workshops: find out what you should bear in mind for planning your finances so that you always have sufficient financial resources available. You can put your name down here via email. 
  
• Credit insurance: if your customers can’t pay their bills, credit insurance ensures that you remain liquid. 
  

2. Lost earnings due to accident or illness

If your business stops, it doesn’t earn any money. Insurance companies call thisa break in earnings or interrupted productivity. These breaks are some of the greatest risks for the self-employed. Because if customers have to wait for your delivery or if contracts and agreements are not honored, this usually becomes expensive. We know a great deal about this. As a leading insurer in Switzerland, we know what matters to the self-employed if there’s a break: the ability to start again quickly.

Read our blog ʺSelf-employed and sick: which insurance applies?ʺ for more information

AXA’s solution

• Daily sickness benefits insurance: having to cope without your best employees due to illness is challenging, but it can be twice as difficult when you factor in continued payments of salary. Daily sickness benefits insurance from AXA can help to ease the burden.  
  
• Accident insurance: whether a cycling accident on the way home or a trapped thumb at work, an accident can happen quickly to you or your employees. Accident insurance from AXA is available so that the consequential costs don’t cripple your company. 
  

3. Legal and liability cases

If third-party claims are raised against you or if there are  legal disputes , this can have major financial and time-based consequences for small businesses. Without insurance and  legal support , you are also responsible for handling these cases on your own. An individual legal protection and third-party liability insurance solution  tailored to your needs helps you solve any conflict and protects you against the consequences for your business.

AXA’s solution

• Are third-party compensation claims a risk? Mistakes happen. If your customers incur damage as a result, claims for damages can often follow and unfortunately these are very expensive. Such cases are covered by third-party liability insurance from AXA. 
  
• Legal issues? Disputes with a customer or trouble about a domain: it can happen quickly – and your start-up is involved in a legal dispute. With AXA legal protection insurance, founders benefit from five hours of free legal advice every year from AXA-ARAG lawyers and attorneys. 
  

4. Property damage

If your equipment is damaged through an  unforeseen event, this is not only expensive but time-consuming. For self-employed business owners, such interruptions quickly result in existence-threatening financial losses. We know what matters to the self-employed when it comes to protection against property damage and we support you in trying to keep your business going in the event of a claim.

AXA’s solution

•  Does stock damage cost you customers?  Is the shop window broken or the store room flooded? That’s what AXA’s property insurance is for, as it covers your losses and any loss of earnings.
•  At a standstill because of technical problems?  Has coffee ended up on your laptop or is the CNC machine faulty? Repairs are expensive and your customers are waiting. This is where engineering insurance can help, as it covers you against the cost of repairs, data recovery and loss of earnings. 
•  Have cyber attacks crippled your IT?The day-to-day work of founders is digital, but what happens if your IT infrastructure is hit by a hacker attack? This is where cyber insurance from AXA can help, as it offers support for recovering your data and compensates you for the financial consequences of the outage. 
• Do you have any questions about IT security?  Take our quick test now using the Weaknesses Scan. This analyzes your website security and identifies  security vulnerabilities. Quick and free. 
  

5. Lack of pension provision

The question of which pension solution is right for you depends principally on the legal form of your business. On that basis, the self-employed without any staff must actively take care of their own  pension provision. This applies to both  Pillars 2 and 3. However, if you have employees or if you are employed by your own company, the OPA  applies (Federal Act on Occupational Retirement, Survivors’ and Disability Pension Plans): this requires you to take out insurance in Pillar 2 as a minimum.

You will receive comprehensive support from AXA to ensure that you always have an overview of your pension options, you don’t miss any opportunities (and valuable returns) and that you benefit from the best solutions for you individually.

Read more about this in our blog ʺPensions for the self-employed: what do I really need?ʺ

AXA’s solution

• Occupational benefits insurance with Pillar 2: it is often too costly for a new company to manage its own pension fund, so AXA offers you various semi-autonomous pension solutions to meet the needs of your company and your (future) employees. 
• Private pension provision with Pillar 3: becoming self-employed can lead to worries about long-term financial security. A private Pillar 3a pension plan is a good way for the self-employed to protect their income for the future. 
• Answers to your questions: AXA has the densest network of advisors in Switzerland. We are there to answer your questions and support you as best we can in your self-employment. Arrange a consultation today. 
  

6. Lack of familiarity

Visibility is an important success factor for your self-employment. Many start-ups underestimate how much work is required to raise the profile of what they have to offer – it’s a risk. You need new customers to establish yourself on the market, and you’ll only find new customers if you’re sufficiently visible . Whether it’s through networking, online marketing, word of mouth, advertisements or viral posts on social media, you should give your new company the publicity it deserves. At the end of the day, you’re good at what you do, and everyone should know about it.

AXA’s solution

• Expand your network through the Swiss Startup Association: build up a network, expand your knowledge, secure discounts: as an AXA customer, you benefit from free basic membership of one of the leading networks for founders in Switzerland. 
  
• Your logo on your new company car - with UPTO: if new business owners take out an UPTO car subscription, UPTO will give them vehicle signage worth CHF 250 which also gets your company noticed when you’re out and about.