General Management | Business Guides | NatWest International

General business management

Our guide to managing your business

Business insurance

Insurance increases your business overheads but is absolutely essential - indeed, some insurance is compulsory (such as employers' liability and motor), but it makes sense to cover yourself against other contingencies (such as theft or fire). It is very tempting to reduce the costs to the bare minimum by under-insuring, but this can be a mistake since should the worst happen, your business could be left without vital resources.

What insurance cover must my business have?

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.

What other types of insurance cover are available to protect my business?

- 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).

How do I choose an insurance broker?

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.

What fees should I expect to pay?

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.

Hints and tips

  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.
Computer systems

There is hardly a business around today that does not have at least one desktop personal computer (PC). The trusty PC is now the tool for holding and managing databases of customers, spreadsheets of financial figures and lots of other important business information.

What computer hardware should I buy for my business?

A business will normally need a PC for each employee if they are office-based, depending on the nature of their work. The technology contained in these computers is constantly being upgraded, so buy as recent a model as you can afford - its age will, to a large extent, determine how long it will be useful for.

Computers nowadays normally have built-in modems, which you will need if you want to connect to the Internet. This will allow you to send e-mail and visit websites - a vital function of computers today. If your business is a heavy user of the Internet, then cable access can be cost-effective.

Four or five users could share a printer; this can be done by linking the users' computers with a network cable. To make regular copies of important business information, you will also need a storage device like a CD writer.

What types of software applications are available to help me run my business?

Computer software used in a business usually includes the following kinds of application:

- Word processors - mainly for writing letters and documents
- Spreadsheets 
- mainly for calculating financial figures or statistics
- Databases 
- mainly for storing and managing large numbers of records.

Specialist packages are also available for certain business functions, such as accounting programs that allow you to manage all financial functions on computer.

Do I need to network my business computers?

A computer network makes the sharing of information much easier. A network is often essential if office staff need to access a single source of data at the same time.

What is remote networking?

Remote networking is a way of getting access to information on your office computers when you are away from the premises. This requires you to dial in through a telephone line from a computer at another location. The arrangement requires your office computers to be well protected against unauthorised access.

How do I make sense of all the jargon?

As a layperson, it is difficult to keep up with computer jargon. But generally you will only need to know what affects you, and here you will find that working with the technology will familiarise you quite quickly.

There are also plenty of ‘jargon-busting' lists of computer-related definitions available to the public - see HelpWithPC' as an example.

Hints and tips

  1. Equipment reviews in magazines can be helpful, if a bit technical. Occasionally they produce beginners' sections or supplements aimed at small business or home office users.
  2. PCs can have a range of energy saving features, some more effective than others. Check manufacturers' claims if environmental concerns are important to the business.
  3. Portable computers (or laptops) can now be as capable as desktop models, but always cost more for similar specifications.
Email and the internet

Electronic communication helps us do business faster and with many more people than ever before. The challenge is to understand this exciting technology and find the best ways to make it work for your business.

What are the benefits of using the Internet in my business?

- Communication is usually quicker and cheaper using email in comparison to using the post, phone or fax.

- Access to information on the World Wide Web is a time-saving research option.

- Your home page on the Internet can provide information about you to prospective customers, though you will need to see this as part of a marketing strategy rather than a substitute for it.

- Using e-commerce technology, you can sell your products over the Internet.

How do I set up the systems necessary to access email and the Internet?

You will need an external modem if your computer does not already have one built in. Almost every computer comes with a modem already installed.

There are three main options in connecting to the Internet:

- A dial-up connection 
- you will need a standard telephone line to plug into your external modem or directly into your PC if the modem is built in.

- An ISDN or ADSL connection 
- which uses a different type of modem, and requires an ISDN or ADSL telephone line.

- A cable connection 
(which provides a permanent, high-speed connection) - you will normally need a USB port or a network port on your computer.

Finally, you need an account with an Internet Service Provider (ISP), who will act as your 'host' on the Internet by collecting and delivering your emails and letting you browse the World Wide Web.

How do I choose an Internet Service Provider?

Your choice of Internet Service Provider (ISP) will depend mainly on how much data you expect to send and receive, and what features you require. There are a number of aspects to consider.

- Type of access required 
- some ISPs can provide only dial-up connections though most now offer ISDN/ADSL options. A true broadband connection will be expensive but is a realistic option if you start your business in an incubator or managed workspace.

- Pricing
 - some ISPs charge an initial join-up fee, and charging options include a flat monthly rate and paying per dial-in.

- Reliability
 - make sure that the ISP has a good service record.

- Compatibility 
- many ISPs only offer access in Microsoft Windows format.

- Technical support 
- if you are new to the Internet, use an ISP that you can phone with any questions.

There are also free services available, which are useful if you need to keep costs low. But these ISPs may not always be reliable and might not, for instance, allow you to retrieve email when you are out of the office.

Are there any legal issues of which I need to be aware?

- PC and Internet magazines regularly compare and review the services provided by major Internet Service Providers.

- If you have staff that will be using the system make sure you draw up an Internet and email policy.

- The growth of computer viruses makes it essential that all Internet users protect their systems with good quality virus-checking software that is regularly updated.

- If you advertise your e-mail address for use by customers and suppliers, e-mails should be checked frequently as Internet users expect a speedy response.

How can I monitor how my staff are using email and Internet resources?

There are computer programs available to track the way that staff use their computers, and to check that they are not used excessively for personal use. As a first step, however, work out a business policy on the use of email and Internet resources. This is best done in consultation with staff, to ensure that the policy is understood and implemented so that the resources are used effectively. It is good practice to allow staff some freedom for personal use of the Internet and email, but this should neither be excessive, nor interfere with their work, and should not include circulating large attachments.

Hints and tips

  1. PC and Internet magazines regularly compare and review the services provided by major Internet Service Providers.
  2. If you have staff that will be using the system make sure you draw up an Internet and email policy.
  3. The growth of computer viruses makes it essential that all Internet users protect their systems with good quality virus-checking software that is regularly updated.
  4. If you advertise your e-mail address for use by customers and suppliers, e-mails should be checked frequently as Internet users expect a speedy response.
Securing premises

Crime needs to be managed like any other business risk. Theft of equipment or data from premises may leave the business unable to trade for an extended time, and a business with limited resources might not survive this period of little or no income.

What do I need to consider when securing premises?

Safe premises are vital to protecting all your business assets - equipment, stock, staff and information. Here are the important things to do:

- Control visitor access
- Check that door, window frames and locks are strong - and that staff lock up securely
- Consider an alarm - almost always essential in obtaining contents insurance
- Keep as little cash on the premises as possible
- Build a safe securely into the wall for on-site valuables
- Strictly control your staff's access to keys to the premises
- Keep back-up copies of business data in a fireproof environment
- Keep the grounds of the premises well lit after dark
- Consider closed-circuit television as a deterrent.

Do I have obligations to my employees with regard to security?

You are legally required to comply with the following:

- Fire safety regulations require that people on your premises must have unobstructed exit routes in the event of a fire. Make sure that your security systems do not get in the way of this important requirement.

- Staff should know how to raise the alarm in case of fire, and be made aware of fire exits and mustering points.

Hints and tips

  1. Consider business interruption insurance in case a theft of certain equipment or information prevents your business from operating. This insurance covers the shortfall in net profit, as well as any fixed costs (rent, wages or interest on a loan).
  2. Ask your insurance company to recommend security mechanisms that will reduce your monthly insurance premium.
  3. The growth of computer viruses makes it essential that all Internet users protect their systems with good quality virus-checking software that is regularly updated.
  4. Keep a regularly updated copy of business records in a safe place off the premises.
Using consultants

Managing the varied demands of a small business, you often feel that you are required to be a master of all trades. It is not possible, though, to be an expert in every aspect of your business.

What can a consultant help me with?

- 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.

What are the advantages of using consultants?

- 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.

What should I expect to pay a consultant?

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.

What should I include in a brief to a consultant?

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.

How can I protect my business interests, and keep things confidential?

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.

Hints and tips

  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
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