Business Planning - Indicative Insurance Costs

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Years ago, when you wanted to start a business it was normally a combination of savings (yours)

, loans (friends and family) and lastly bank finance that helped you to get going. We all know that whilst you might have the best business idea ever, you need some investment to get going. There are very few businesses that you can start, and earn a living from, without at least a few thousand pounds. Most businesses will need significantly more than this.

In 2010, things are slightly different when looking for your business start up funding. Sources of finance have changed and business owners do tend to look to the UK banks for seed finance to get going in the first instance. The worldwide recession has put a stop to the likes of RBS and Bank of Scotland throwing good money at bad businesses. Nowadays, you will need to put together an extremely robust business plan to even get an appointment with a bank employee to discuss a loan of any sort.

But what does the business plan do? In essence, it puts down your ideas and aspirations for your new venture into cold, hard numbers. What do you think you will bring in (turnover or fees) and what do you think you will pay out (business expenditure) and what will be left? That is all that it is about, however detailed the plan is, all it is really asking is will you make any money. Of course, many businesses plan to make a loss in the first few years as the costs of the initial investment take their toll. This is why most business plans are either three or five years.

As part of this planning process, you will usually receive a template either on-line or in the form of a paper copy to complete. The template will include a list of all the possible costs that your business could, and usually will, face. We can guarantee, for any new business start up, that there will be costs in the plan for things you have not only not thought of, but probably not heard of.
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One of these costs that you will be aware of is your business insurance. Banks will not lend money unless they know that the assets that you will be buying, with their loan, are suitably insured.

You will be faced with a problem though because, you cannot simply look for a quote because the business does not exist. The bank may try to flog their own cover to you, but beware as this will be from an extremely limited market so they are not giving you a choice.

You must speak to a business insurance broker and explain that you are looking for indicative costs for a business plan. Some brokers may say they cannot give you a quote, which means they cannot be bothered. Others, who are more enlightened realise that all the help they give you now may reap dividends when you insure through them when your business starts up. Although the broker is only giving you an indicative cost, this will be enough for your business plan. The one thing you can be certain of in a business plan is that the plan versus actual will be different, all you are trying to do is get a good idea of what the business will or will not make.

by: Jack Brown

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