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disability-insurance for-business-ownersSmall business has long been touted as the undisputed source for new job creation. Therefore, small businesses have always been on the radar of growth-seeking financial professionals. However, it’s a broad category, which can make for challenging prospecting.

A closer look at characteristics of the small businesses responsible for generating new jobs yields surprising insights. Startups, high-growth startups to be specific, generate close to 50 percent of new jobs created by small business. Narrow your small business prospecting by concentrating on those that are more likely to be successful in the long-run.

What is a high-growth startup? How are they identified? High-growth startups (HGS) add more jobs to the economy and earn higher revenues than other startups. On average, the top HGSs add 88 new jobs annually compared to 2–3 for the typical small business. Revenues are at least $100,000 and increase by 20 percent year over year initially. The range of industries is broad and not limited to tech firms. Health care, food and beverage, retail, and government services are examples of industries spawning high-growth startups. They can be found throughout the country, not limited to Silicon Valley. In fact, Salt Lake City has one of the highest concentration of high-growth startups as does Indianapolis and Buffalo. Regionally, the south, from Texas to Delaware has the largest number of HGS company founders.

The typical employee population of these firms is highly educated, with at least a four-year degree, eventually earning upwards of $100,000. For the prospecting advisor, the employee base may represent attractive future clients.

Finding these firms in your area may be easier than expected. Many of the most successful startups are alumnae of small business accelerators. Accelerators are quite different from angel investors and small business incubators. The focus is on accelerating the learning curve for founders with strong mentorship relationships within the local business community, establishing a class or cohort of entrepreneurs, education, and sometimes securing funding. Education is a strong component, encompassing financials, employee development, marketing, and insurance needs for business owners and employees. The advisor who forms a relationship with a small business accelerator gains early access to business owners in the community as well as networking opportunities with others involved in the success of the startup.

A recent posting from the Council for Disability Awareness cited startups, their owners and employees, as particularly in need of disability insurance. Startups often have limited employee benefit packages, usually offering only health insurance. Offering a guaranteed standard issue disability plan to the owner and employees provides essential coverage without increasing benefit expenses. When three or more enroll in an individual disability insurance plan many carriers offer premium discounts and, if not a guaranteed program, underwriting requirements are often relaxed.

DIS is a trusted resource for advisors exploring new markets. In fact, several recent articles introduced other new markets, like pilots and athletes. Call your DIS representative for information about carriers with expertise in the startup market. Also, download our business owners income protection checklist.

Click here for more information about DI for business owners.