Despite the myriad of options out there, insurance providers will often bundle them together for certain types of businesses. For example, a product called “shopkeeper’s insurance” may include fidelity, property, stock, and business interruption insurance. Below is a basic breakdown of some of the more common types of insurance. It is not intended to be definitive, but merely a guide to getting started. A great way to check what kinds of insurance your business may require is to take the online test at bis.gov.uk.

Public Liability

Public liability insurance is designed to protect your business against damages arising from unintentional harm, or tort, usually as a result of negligence. While public liability insurance isn’t mandatory, it’s a good idea for any business with employees, as this covers damages to members of the public caused by the company or any of its employees. This can include damages to both people and their property, and covers legal fees, expenses, costs, and hospital treatment, which the NHS charges. The premium, or upfront fee for securing the insurance policy, will depend on a number of criteria, e.g. the age of the business, its health and safety record, the amount of contact with the public, etc.

Employers’ Liability

Employers’ Liability (EL) Compulsory Insurance is designed to assist with compensation for employees who get injured while working. As the name suggests, Employers’ Liability insurance is mandatory if you have any employees. In cases where the employer’s negligence is to blame for an injury, even if the company goes into liquidation, an employee can still claim compensation. The minimum coverage for EL is £5 million, and many policies cover up to £10 million for such payments. Due to the compulsory nature of EL insurance, the Health and Safety Executive (HSE) can fine a company that has failed to cover itself up to £2,500 per day. For more information, check out the HSE’s guide.

Fidelity Guarantees

Depending on the nature of your business, fidelity guarantees can be necessary for protecting your business from theft or other losses due to employee dishonesty. Shop owners, for instance, will often take out fidelity insurance because of the availability of opportunities for employees to steal stock. On the other hand, a company whose focus is predominantly service orientated, or doesn’t have any non-stakeholding staff, is less likely to see fit to purchase fidelity guarantees.

Legal Expenses

In the event of legal action being taken against your company that is outside of the domain of employers’ liability insurance, you can take out legal expenses insurance. For example, if an employee brought charges against your company, and the case went to an employment tribunal, legal expenses insurance would cover legal costs including fees for accountants and other expert witnesses, barristers, and solicitors. Additionally, legal expenses insurance also covers opponents’ legal costs in the event that you lose the case in a civil court.

Comparing the markets

Finally, when looking for insurance, it’s always a good idea to get quotes from a number of providers to make sure you’re getting the most appropriate coverage at the best available prices. If you’ve watched any commercial television, you must be aware of the myriad websites that compare various insurance programmes and prices. Many price comparison sites are owned by insurance companies themselves, so make sure to shop around while you’re shopping around. I’ve linked to a few of these sites here, but again, this list is certainly not extensive.

Compare the Market (owned by BISL Ltd)
Go Compare (owned by gocompare.com Ltd)
Money Supermarket (owned by moneysupermarket.com Plc)
Morethan Business (owned by the RSA Group)
Construct a Quote (owned by Moorhouse Group Ltd)
SME Insurance (owned by SME Insurance Services)
Make it Cheaper (owned by Make It Cheaper Ltd)

This week’s Q&A is with David Cox, Partner at haysmacintyre Chartered Accountants and tax advisors. haysmacintyre advise small and medium sized businesses and in particular are actively involved in assisting new start-ups. David acts for a number of start-ups including Duedil.

Who are haysmacintyre, and what does your day-to-day work involve?

haysmacintyre is a medium-sized firm of accountants based in Holborn, London, with 23 partners and about 160 staff. We act for a broad range of clients from new start-ups through to £150m multinationals. My day-to-day work is pretty varied; for example my diary this week looks like this:

Yesterday: Performed financial due-diligence on an acquisition target company for one of my clients.

Today: Pitching for the audit and tax work for a prospective new client.

Wednesday: Assisting a client with their accounting following their private equity backed management buy-out.

Thursday: Assisting a client with their R&D tax relief claim and their EMI share options.

Friday: Preparation of accounts and tax return for a new property company client.

As a firm we have historically used another data provider to access information on companies and documents from Companies House. However the usability and speed of Duedil is already superior and hence it’s made it easier to find out quick information on companies. We also pay a not insignificant annual subscription to the other guys which doesn’t look like particularly good value for money compared to the free services offered by Duedil.

Today I prepared a quote for a potential new audit client and Duedil enabled me to quickly identify the group companies (via the brilliant group graph function) and the other companies that the directors are involved with. Yesterday I was off to visit a potential acquisition target and following a Duedil search, I got a quick snapshot of information that helped me guide my work. The client I’m seeing on Wednesday now has a particularly complicated group structure following the MBO and it’s useful to get information on the enlarged group. And finally I use Duedil to find out information on my own clients to enable me to prepare their accounts, etc.

I use Duedil on a daily basis to find out information on clients, prospective clients and acquisition targets. These are usually UK private companies.

I find the information on who the company directors and shareholders are the most useful. This information is available through our other data provider but it’s not particularly easy to find – Duedil is just a lot more intuitive.

The group graphs and the ability to quickly jump between connected companies. As part of financial due-diligence I want to find out about other companies that directors are involved with and may be connected in some way. Duedil allows me to easily find these companies in a quick and user-friendly manner.

Anything else?

The usability of Duedil is already superior to our other data provider and I’m sure that this will only get better. I’m looking forward to being able to download more Companies House documents and use the new features currently in development.

For more information, check out our previous post featuring an infographic on the ROI of social media.

With an eye for the next big thing, Hurwitz sees the vast potential for business growth in big data analytics. He will bring both his technical and strategic expertise to Duedil, which he hopes will develop into the premiere source of business information in the world.

Since launching in April 2011, Duedil has proven to be one of the most exciting and disruptive startups in London. Duedil is the largest database of free company financials in the world. It aggregates over 30 billion data points to bring indispensable information on every company & director in the UK & Ireland, for free.

UPDATE: The competition is now over. Thanks for participating and making this a big success, and a big congratulations to all the contest winners! All winners have now been emailed to explain the next steps.

We’re giving away a year’s free access to our Companies House document archive to the first 1,000 Duedilers to sign up 10 friends.

Winning the prize is easy. Simply click the Play button on the homepage to get started. You’ll receive a unique link to share via Twitter, Facebook, LinkedIn, email – anywhere you like. All you need is 10 friends to signup using this link and you’ve won unlimited documents for a whole year! To check your score, simply type your email into the competition signup box again. Good luck!

Why are we doing this? If there’s one thing we’ve learned from our users, it’s that nothing makes them happier than being able to access accurate information easily and painlessly. At Duedil, it started with showing financial information, and the connections between companies and directors. The next logical step is to offer our users the chance to download original scans of the documents in our vast database.

We’ve come up with a much better way of finding and downloading these documents, and to celebrate our forthcoming document downloading feature, we’d like to give away free access to these documents to 1,000 Duedilers.

All you need to do is be one of the first 1,000 Duedilers to get just 10 friends and colleagues to sign up using your unique link, and from January 15th, you’ll be able to download any document from our database directly from company profile pages, completely free of charge. That’s unlimited document downloads for an entire year, from annual accounts and mortgage declarations, to director changes, incorporation documents… the works – for an entire year, totally free. This covers documents that we have never released before, all the way back to 1995!

Using the Six Minute Strategist methodology of taking one issue and dissecting it into six points and presenting it in under six minutes, here are 36 questions for Start Up Entrepreneurs, under the main heading of “Goals and Objectives” and which are designed to help them in the planning phase of their enterprise.

The six main topics are:

• Commitment
• Business Scope
• Financial Planning
• Bricks or Clicks
• Business Structure
• Mistakes and Pitfalls

These topics are designed to stimulate thought and enterpreneurs can use these topic headings and the questions raised to think of further questions that will help you plan and organise your business.

Commitment

Entrepreneurs are risk takers and should be rewarded for taking risks. However, before you launch into your new venture, you should do some careful risk assessment. You need to make sure that you can commit to the effort that will be required to make this a success and plan for the downside scenarios if things do not work as planned. Here are some questions to ask yourself:

• Are you ready for the commitment of your time to this business which might be 90 hours a week and seven days a week?
• How are you going to sustain yourself and your family during this period?
• Are you going to quit the day job straight away, and if not, when?
• Is your partner 100% behind you?
• Will your relationship stand the strain?
• What will you do if the venture fails?

Business Scope

You need to give serious consideration to the nature and scope of your business. One of the first mistakes made is to try to turn a hobby into a business. Just because you are passionate about something does not automatically mean that the world will beat a path to your door. Consider the following:

• Is this going to be a product or a service business?
• Will it be a niche or a broad business – serving a narrow or a wide market?
• Do you intend to be local, national or global?
• Where will you source your products from?
• Is the business scalable?
• With whom will you be competing?

These issues will come up again in different forms as we continue through this self analysis.

Financial Planning

As you are starting a business, you need to make sure that you approach it from the right perspective – with a strong grip on the financial aspects. Good planning and organisation at the start will make your fund raising much easier, make day to day management far more efficient and greatly reduce the chances of a failure. Here are some things to think about:

• At what price are you going to sell your product/service?
• Where are the customers? Will they pay what you ask? What are they paying now for similar products/services from other suppliers?
• What are your gross margins (Sales less cost of sales)?
• What are your net margins going to be after all your other costs?
• What is your unique selling point? How will you differentiate yourself in the market to enable you to protect your margins?
• With growth, how can your financial returns benefit from economies of scale?

Bricks or Clicks

The influence of online marketing and social media is already having a profound influence on offline economic activity. A key area to be addressed is what is going to be the online/offline balance of your business? This can range from 100% online but is very unlikely to be 100% offline. With the impact of mobile computing, tablets and smart phones you are almost certainly going to want to be able to reach your potential customers through the internet. There is no template here. You need to address this issue when you have a clear idea of the form and structure of your business and then work out an internet strategy that is best suited to your business.

• Website – This will almost certainly involve your “home on the internet” website that you can drive all your traffic back to and which you control.
• Online Delivery – You may chose to conduct all your sales online or have e-commerce enabled to allow your customers to buy from you online as well as offline. You will need to make sure your fulfilment capabilities are properly thought through.
• Social Media – How will you use social media sites such as Facebook, Google+ and Twitter to connect with your customers and reach out to potential customers?
• Blog – Will you have a company blog to connect and interact with your customers? This can help to develop a sense of community and brand loyalty.
• Conversation not Broadcast – Do not make the mistake of talking at your audience. This is an interactive and sharing medium and you must make sure that the style and tone of your interaction fits the platform on which you are connecting.
• Social Media Policies – You will definitely need to think through how you and your employees use social media and explain this in a set of policy guidelines within your company.

Business Structure

Your business will need structure – otherwise it will not develop and probably turn into another hobby! Think through the following:

• Legal form – Will you operate as a sole trader, a partnership or a limited company? There are complex legal, financial and tax issues associated with all three and you should take the appropriate advice early.
• Management Team – Putting a good founding team together early is important, on the assumption that you are not going to do it all on your own. Track record is important here as well as the right mix of skills. Hire the right people, don’t just round up a group of chums.
• Shareholder Structure – Make sure that you control the allocation of equity carefully, reserving the bulk for the real founders which might be only you. As you bring on investors there will be dilution and you need to work out how much of the company you are likely to have after several rounds of finance.
• Building the team – You need to plan your organisation and decide who you will need to fulfill which roles and when. Think lean and mean and always watch your cost base. If in doubt, over-estimate costs, not the other way round.
• Infrastructure – Think through your physical infrastructure needs and what IT systems you will require. Set these up once and get it right, as it becomes very expensive to have to do it several times, particularly as you scale up your business.
• Information – Make sure that the information flows as the organisation grows. There needs to be clarity about roles and responsibilities as well as task and project management. On the one hand, you may find no-one taking responsibility for tasks and on the other, duplication of effort can be very expensive.

Mistakes and Pitfalls

Business plans and spreadsheets are all well and good. What counts however is execution and you will need to think through how you are going to execute on your plan. You will need to decide the order that you do things and the priorities you apply to them. However, it is still easy to make mistakes. Here are some examples:

• Don’t run out of cash – Funding is always a key issue for early stage companies. You should have a careful funding plan and make sure that you do not run out of cash. If you have to go to shareholders and you are in a tight financial spot, the resulting negotiations may make it a difficult round to close on terms favourable to management.
• Cost Management – Always over estimate costs. Cost underestimation is one of the most common mistakes. You should monitor your cash flow (http://www.duedil.com/site/short-on-cash/) daily and always know your monthly cash burn and how many months of cash you have in the bank.
• Build the Right Team – Hire slow and fire fast – make sure you bring the right people on board but if you make a mistake, correct it quickly.
• Intellectual Property – You should ensure that the company retains the absolute right to all intellectual property and if someone leaves the company they have no residual rights over anything they have helped create while at the business. If in doubt go and watch The Social Network, then Google “Winklevoss”.
• Equity Dilution – You should make sure that you have an equity pot for those who are important to the business but think through the game mechanics of funding rounds. If you work on the rule of thumb that each funding round will add 33% of new shares the pot, calculate the founders shareholdings after three rounds with different starting points.
• Focus, Focus, Focus! Keep a close eye on what you are trying to achieve. If each action is not core to the strategy ask yourself why you are doing it and is it important. It is too easy to drift away from the original goals of the business and waste effort and resources on non-core activities.

I hope this is helpful to you in planning your business!

If you find this interesting, please come and visit the Six Minute Strategist Blog. If you enjoy the content, leave a comment and/or join the mailing list. You can find my Podcast, A Conversation with the Six Minute Strategist, here – please rate the podcast and/or leave a comment.

Note: Some markers on the map below will have more than one company listed, so look out for the clickable page numbers in the pop-up information windows.

View Duedil’s TechCity Startup Map in a full screen map