Bad things happen. It’s a fact of life. But with a little preparation, businesses can mitigate some of the impact.

There are some estimates that 80 per cent of businesses with no business continuity plan fold in the aftermath of a major disaster. And while this could be something along the lines of a national emergency such as a terrorist attack or health epidemic, it could just as easily be something closer to home, for example the incapacity of a key member of the business. Or it could be something as simple – yet damaging – as a strike leaving you out of contact with your customers.

Putting a plan in place can not only help you arrange procedures for dealing with emergencies; it also provides a step-by-step guide for individuals to follow when they may be finding it difficult to make decisions – giving them a route to follow will help them work through the crisis.

“By developing a simple plan, a business continuity plan, you can protect your business to ensure that no matter what disaster strikes you are prepared and “Business as usual” is the only thing your customers and suppliers see,” says Colin Ive from SME Continuity.

Your first step, according to the Contingency Planning and Disaster Recovery Guide, is to prepare a list of all the potentially serious events that could happen. This doesn’t necessarily mean listing all the disasters that could befall you, but looking at the issues that would affect your business. So instead of listing swine flu, ebola or any other illness, the list would include something along the lines of staff shortages or key person unavailability.

For each potential issue, you need to come up with a process to follow – the key people involved, any suppliers that need to be contacted, a list of contractors who may be able to support you and, vitally, any insurance policies you can claim on.

While business insurance won’t be able to completely prevent any effects of a disaster, it can help to mitigate any costs you may incur. Key Man Insurance can provide a cash injection into a business in the event of the untimely death or incapacity of a specified member of staff. The funds can be used to offset any loss of revenue caused by that person’s absence, or to recruit or train a new person in that position.
If your business is hit hard, and has to stop trading for a short period, Business Interruption insurance can help to tide you over. It’s a short term solution for a few weeks and is there specifically for if you have to stop trading due to factors outside your control – it doesn’t cover a downturn in trading conditions.

If the emergency is a bit closer to home, public liability insurance and employers’ liability insurance will protect you from claims for issues that arise on your premises. We live in a culture of litigation and if an injury or damage could be found to be your responsibility, then expect a hefty bill.

Tens of thousands of people decide every year to go it along. And while the risks are high, the rewards can be enormous. Working for yourself, earning your own money and controlling your work means much more than simply working for the man.

But there are no guarantees of success. A significant number of new ventures never reach their second birthday, and failure can affect your personal finances significantly.

So you need to do some homework before you risk your money. Here, we give you ten top tips to get on the right track from the start.

1. Focus on your product

Whatever your business, you need to make sure you really know what you’re doing. Who else is in the market? If there’s plenty of competition, what are you doing to make your business stand out? If you’ve found a niche – either a product that doesn’t exist, or a service not available locally – think about why nobody else is doing it. There may be a good reason for it not being available.

2. What kind of company are you?

“Deciding on what type of company you set up as is key,” says a spokesperson for the Federation of Small Businesses. “It affects the kind of finance you get to work with, the roles and responsibilities of the owners and your tax status.” For start-ups, there are effectively three main options – a sole trader, a limited partnership or a limited company. Each has its own benefits and disadvantages, and it’s well-worth doing some research on each to see what is best for you.

3. Which bank?

Despite the current economic turmoil, banks are still keen for business from start-ups, and many offer a range of incentives. While the benefits of free banking for a year or cheap initial overdrafts may seem vital, it’s more important to look at the long-term value, so compare the fees and charges once your deal period ends before you take the plunge.

4. Other financial services

No matter which bank you end up with, you don’t have to take all the products you need with it. If you need a small business insurance quote or a loan rate, compare the prices of the whole market to get the best deal.

5. Check your liabilities

As a business owner, you have responsibilities to your customers, your employees and your suppliers. If you fail in those responsibilities, you could be held liable for any injuries or damage that result. Make sure you have liability insurance in place to cover yourself against any claims.

6. Take advice

You can’t be an instant expert in all areas of running your business, so don’t be afraid to ask for help. Professional groups, such as your bank, will be able to give you information and advice on some areas, but it never hurts to canvas friends and family for their tips.

7. Don’t ignore the paperwork

There are legal implications for businesses that don’t keep up with their administration, but a disorganised approach to your paperwork means that you will miss opportunities and fail to spot any potential obstacles ahead.

8. Know the law

All businesses are subject to certain laws, and there will also be rules and regulations specific to what you do. Make sure you keep within the rules – the penalties can be huge and your reputation may never recover.

9. Get the marketing right

Understand where your potential customers are and build up a strategy to attract them – they’re unlikely to come to you. “The best strategies are usually the simplest, so when setting your marketing strategy make it achievable and ensure it fits within your budget,” says Julia Payne, co-founder of The Edge Business Club.

10 Don’t give up!

There will be obstacles and you’ll have good and bad days, but building up a new business is always going to be hard work and the biggest successes tend to come from the businesspeople who try the hardest.

Forty percent of businesses are failing to conduct fire risk assessments in accordance with legislation implemented three years ago, warns Aviva Risk Management Solutions (ARMS).

Based on this unsatisfactory level of compliance with the Regulatory Reform (Fire Safety) Order 2005, Fire and Rescue Services have issued businesses with 34,500 informal notifications, 3,200 enforcement notices, 442 prohibition notices and 84 alterations notices.

And fire authorities prosecuted 43 per cent more organisations last year for failing to comply with any part of the order.

Andrew Couch, health and safety consultant for ARMS, said: “Though fire service audits increased 20 per cent last year and the number of enforcement notices has fallen, satisfactory compliance rates have remained virtually unchanged in the past two years³.

“As the figures show, this is not going unnoticed by the authorities and is leading to enforcement action. And an increased level of audit activity focusing more on higher risk premises such as care homes, hotels and hospitals will bring more and more firms under the spotlight.”

Successful prosecutions can lead to significant fines. Last November, the high street fashion chain, New Look was fined £400,000 for fire safety breaches at a London branch*.

To help small businesses comply with legislation, ARMS has launched a service in which its risk assessors will conduct fire assessments on a firm’s behalf, producing formal documentation, identifying fire risks and providing evidence that the requirements of the RRO have been fulfilled.

If shortfalls are identified, risk assessors will advise businesses on how fire risks can be improved. This will include details of relevant preferred supplier solutions at competitive prices.

Couch continues: “Often businesses tell us that they either don’t have the time, don’t know where to begin when it comes to fire safety, or they need additional support and advice from someone who knows what they are talking about.

“But failing in the basic responsibilities of completing fire risk assessments means that firms are not only breaking the law but also not managing the hazards on their premises.

“The use of risk assessors to conduct health and safety consultations is a cost effective way to bring in the necessary expertise to ensure fire safety. It can be a useful business strategy until businesses are in a position to appoint their own suitably qualified employee to conduct fire assessments.”

The risk assessment will include a fire safety policy, which identifies fire risks such as combustible or flammable materials and incorporates procedures for evacuation, as well as making recommendations to improve fire risks.

Research commissioned by AXA Insurance in association with the British Chambers of Commerce (BCC) reveals that over half a million people are uninsured in their workplace and only a third of businesses (34 per cent) understand their legal requirement to cover employees through employers’ liability insurance.

Alongside this, a worrying number of businesses are looking to reduce or cut out insurance cover altogether as the recession bites. In the last year, around 15 per cent have considered cutting back on their insurance while five per cent have already cut back their level of insurance cover. When it comes to making cuts to save money, reducing the level of insurance cover is almost as likely to be a target as the company’s tea and coffee (with 35 per cent and 39 per cent respectively).

However, AXA warns this is a dangerous false economy as 13 per cent of businesses have less than £1,000 disposable cash and 48 per cent have less than £10,000. This means that without proper insurance, companies would be left extremely vulnerable in the event of a claim – which around one in nine businesses are likely to make each year. Average claims costs for the three most common claims are around £49k for business interruption, £36k for fire and £3.5k for theft.

(Mis)understanding insurance

The research carried out among hundreds of British businesses across all sectors shows that ignorance is rife. Aside from nearly two thirds not understanding their legal obligations in relation to employers’ liability cover, only 11 per cent of employers understand that if a company van or other vehicle is made available to employees then the employer is legally obliged to insure it. Only 37 per cent understand completely what premises insurance is for while this figure drops to 26 per cent for equipment and contents and 30 per cent for public liability.

Business Interruption (BI) cover, which will pay out if you are unable to operate as normal or have to close your business due to an insurable event, was misunderstood with nearly a third (31 per cent) having no or little understanding and 15 per cent wrongly thinking that it is legally compulsory. 14 per cent wrongly think that BI is available if employees can’t get to work because of severe weather, and only 24 per cent realised that BI could cover you if you had to close your business because of a power cut . Seven per cent also wrongly believed that they’d be covered if they had to shut their business because employees got swine flu and six per cent if business was lost because of the recession.

Less than half of employers have read their insurance documentation (49 per cent) and only 23 per cent keep it in a secure filing system either on or off site. Four per cent of employers admitted to not having a clue on what they are actually covered for.

Employee viewpoint

Despite the fact that employers have gaps in their understanding, 89 per cent of employees were aware of insurance covering them for accidents at work, although over a third (36 per cent) had never been given any information about their employer’s insurance programme. AXA advocates that employers continue to prominently display their Employers’ Liability Certificate as well as making this available electronically.

Four per cent wrongly believed they’d be covered for discriminatory behaviour from colleagues and three per cent for accidents on the way to and from work.

Doug Barnett, head of customer risk management at AXA says: “These statistics should be a wake up call to all businesses and the insurance industry alike. With the economy as precariously positioned as it is at the moment, the last thing needed is more businesses needlessly going to the wall because they are not properly insured.

“We have taken the findings of this research very seriously and have produced materials that can be used by AXA to help get our message across to business owners and management that insurance is an absolutely vital component of any successful business.”

Businesses are putting employees’ lives at risk and could be contravening health and safety legislation, says Norwich Union Risk Services (NURS), soon to be Aviva Risk Management Solutions.

According to the Health and Safety Executive, over 136,000 injuries to employees were reported in 2007/2008.

Research conducted by NURS reveals that nearly 40 per cent of businesses are not getting competent advice on their health and safety risks.

Simon Cook, lead health and safety consultant for NURS says that to prevent life changing accidents at work, it’s imperative that an appointed competent person conducts adequate health and safety risk assessments.

“The Management of Health and Safety at Work Regulations require companies to have at least one competent person qualified to advise on health and safety matters. This is even more important during these difficult economic times as the impact of a serious accident could be unbearable for many businesses.

“Often businesses tell us that they either don’t have the time or resources, don’t know where to begin when it comes to health and safety, or they need additional support and advice from someone who knows what they are talking about.

“Failing in the basic responsibilities of completing risk assessments means that firms are not aware of the hazards present on their premises and are not therefore managing them effectively. For example, we see businesses failing to segregate vehicles and pedestrians on their premises, or not putting housekeeping measures in place to ensure that slip and trip hazards are minimised.”

“NURS has launched a Competent Person Support service, which offers businesses specific approaches and tailored solutions to assist with meeting important health and safety requirements.

“The use of external health and safety consultants is one cost effective way to bring in the necessary expertise in practical health and safety management. It can be a useful business strategy until businesses are in a position to appoint their own suitably qualified staff.”

There are three levels of NURS’ Competent Person Support services available:

Level one

Ideal for small businesses and involves NURS consultants making an initial appraisal of a business’s health and safety needs. Consultants will provide their expertise to complete risk assessments, develop health and safety policies and procedures and safe systems of work for an organisation. Businesses get practical on-site mentoring, help and advice. The mentoring approach can help businesses continue to manage risks themselves, should they wish to, with the assistance of NURS’ small business self help and resource tool.

Level two

Suited to larger businesses, this involves a Safety “Health-check” Audit, where a consultant will produce a detailed report outlining a company’s current legal compliance status and the suitability of existing health and safety management arrangements, along with a tailored action plan. Consultants can then assist the business implement the plan by developing health and safety management systems, completing risk assessments and safe systems of work, carrying out workplace safety inspections, conducting accident investigations, chairing health and safety meetings, auditing safety procedures and providing on-site health and safety training to staff. Businesses can be confident that they have access to support from health and safety experts who will guide them towards significantly improved standards of health and safety compliance.

Level three

Aimed at UK National or multinational organisations, consultants utilise a suite of specialist tools including behavioural safety programmes, specialist education and training programmes and in-depth auditing tools, to bring about noticeable changes in the health and safety culture of a bu