Setting up a specialty business can be somewhat of a tricky venture. That is not to say setting up any business is risk-free, but those venturing into sectors that are deemed higher risk or need more specific care and attention to operate correctly can pose newer and more complex hurdles to overcome.
But what is classed as a specialty business? Typically, this title is given to new or emerging industries, those that cater to a specific section of the population. It could be gambling sites, a CBD company, medical cannabis dispensaries, or an industry where fraud is high and chargebacks are a huge cause for concern.
If you’re going to venture into these types of sectors, it is important that you understand exactly what will be required of you and what you can expect from standard business offerings and partnerships.
Specific Insurance
Insurance is vital for every single business you set up, and while some, like employee liability insurance, are legally mandated, others are optional but highly recommended. The thing with specialty businesses is that the most general policies won’t or don’t cover the level of risk presented. This means you need to get yourself a tailored quote to ensure you cover all your bases and you have the right level of cover for what you do.
If you own a gun range, for example, then you need to ensure your policy covers you for the risks of this industry; if you own a skydiving company, general insurance won’t cover you for taking people to the skies to jump out of a plane. In these cases, you might need specific insurance for potential accidents or injuries. These nuances to what you need can result in you needing to be more careful as to who you obtain the necessary insurance from.
Payment Providers
If you’re accepting online payments or payments in person via credit or debit cards, you need a payment provider who understands the type of work you do. This provider can assist you in growing and implementing solutions that will help you, not hinder you.
The main issue with payments for specialty businesses is that most providers can hike up fees due to higher risks of chargebacks. A chargeback is a transaction reversal meant to serve as a form of consumer protection from fraudulent activity committed by both merchants and individuals. For example, if a customer disputes a charge on their credit card, the bank may reverse the transaction, resulting in a chargeback for the merchant. This can be a significant financial risk for specialty businesses, as can the risk associated with what you do. If you or your business has bad credit, too, this can be an extra barrier to getting competitive rates for your merchant services.
Choosing a merchant account for specialty businesses is not just about processing payments. It’s about finding a partner who understands your unique needs and is committed to your growth. With the right provider, you can operate without the fear of excessive fees or penalties, allowing you to focus on your business with confidence.
Narrow Customer Bases
It would be remiss not to consider the marketing potential of what you do and your audience base. Because, in reality, you won’t appeal to everyone, and there might only be a certain subsection of people who want or can afford what you do. A great example is a pet-friendly plane that offers pet owners the chance to travel in the cabin with their pets amongst other pet owners. However, due to the smaller size of the aircraft and the cost of the flights, there is only a small section of pet owners with disposable income and a proclivity to travel who will use these services. So, marketing for this type of business needs to be mindful of this section of the population.
You need to be aware of your maximum potential and limitations on your audience size so you can understand your options.
Strict Regulations
It’s safe to say that the more left-field your business is, the more out there you consider what you do to be, the more rules and regulations you need to adhere to. From additional health and safety measures, see the above skydiving example, higher training and compliance costs and adherence, purchasing supplies, tools, paying for certifications and memberships, etc., it can be costly and time-consuming to get to the point where you are confident you have all of your bases covered, you know what is legally and morally required of you in your sector, and you can easily offer what you need and meet standards expected.
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