Managing your business

This will depend on the work that your business does and the specific dangers and risks involved. 

Employers' liability insurance (insuring against any injuries to employees) is compulsory for all businesses that employ staff other than the owner's family. If the business runs its own motor vehicles, you must also have motor insurance. If you, or your staff, use your own vehicles for business activities, you should check that the insurance of the individual users provides cover for business purposes.

The other important kinds of insurance to consider are:

• Public liability insurance - against injury to the public caused by the business.
• Product liability insurance - against injury caused by your product (this insurance is taken in conjunction with public liability insurance).
• Building and contents insurance - if you own premises.

• Key person insurance - against the prolonged absence or loss of an important member of the business.
• Professional indemnity insurance - for professionals whose advice or service might make them liable for legal claims.
• Business interruption insurance - against the risk of having to stop trading for any length of time.
• Credit insurance - against the risk of not getting paid by customers (this is expensive and will not be available until you have a decent trading history).
• Fidelity insurance - against losses due to fraud or dishonesty by employees.
• Legal expenses insurance - against unexpected legal costs (this is often provided as part of a total insurance package).

Insurance brokers are private consultants who will assess the major risks to your business and recommend suitable insurance products. To choose a broker, start with recommendations from colleagues in business or from your accountant. You can also talk to professional broking associations such as the Association of British Insurers or the British Insurance Brokers' Association, which will be able to give names of brokers in your area.

Meet with three or four brokers and compare the services they offer, their knowledge of your industry sector and their costs.

Generally, you will not have to pay a fee for a broker's services. They earn a commission from the insurance companies whose policies they sell. Some brokers do charge fees to their clients, however, so clarify this when you meet a broker for the first time.

1. Shop around before you decide on an insurance product, as prices will vary surprisingly.
2. Ensure that your insurance is in place before you start trading.
3. The Association of British Insurers (ABI) produces advice specifically for smaller businesses.

• Human resources - especially hiring and firing people, and seeking recognition as an Investor in People.
• Business management - especially getting proper systems in place or troubleshooting tricky management problems.
• Business advice - especially when setting up a business for the first time.
• Health and safety - especially in a new business that may have to comply with regulations.
• Public relations - especially when your business needs a marketing boost.
• Quality issues - especially if you decide to introduce recognised standards such as ISO 9000.
• Environmental issues - especially when your business wants to put itself on an environmentally friendly footing for the future.

• You can call on consultants when you need them, but you are not taking on any long-term costs as you would do when employing someone.
• An outsider's perspective is often crucial for spotting problems or opportunities.
• A consultant is ideally an expert in their field. They will have seen your business's need or problem before, and can offer you the benefit of that experience without you having to learn it the hard way.
• The focused expertise of a consultant is particularly useful when your business has to comply with current legislation affecting your sector. Their experience in this will save you a great deal of time, and eliminate the risk of you making a costly legal mistake.

Consultants are required to respect the confidentiality of their client's business and not to divulge any information about your business to a third party. To be quite sure that the consultant will abide by this, include a clause about confidentiality in the contract.

This will vary both between and within kinds of consultants. A management consultant's fees, for example, will start at about £300 per day, but could be as high as £1,000 per day or more.

A written brief should contain business information, budget details, business aims and objectives, resource details, time constraints, special conditions, problem details and reporting methods. This should prevent confusion and make the overall process more effective. Most importantly, the brief provides the means to assess the work when it has been done.

1. Be prepared to listen attentively to the consultant's comments and be willing to admit you may have made mistakes. Never employ a consultant to ratify something that you have already decided.
2. Try to absorb as much as possible of the consultant's expertise; treat the process as a learning experience.
3. The Institute of Management Consultancy is a good starting point.