Margin is probably the most crucial figure in any business. Tell me your turnover, your margin and your running costs and within seconds I can tell broadly whether your business is a triumph or a disaster.
In the past, I was obsessed with mark up. It sounds great saying product X is marked up 1,000 per cent and this one 500 per cent, but it doesn’t provide the immediate overview that margin does.
Margin is basically your gross profit as a percentage. This means you can quickly work out your gross profit on any amount of sales – which you should do every day.
How do you calculate margin? First work out your gross profit, which is selling price minus costs. Then simply divide this figure by your selling price and you’re left with your margin.
I run Karacha.com, an online shop that sells musical instruments. So, as an example, if I sell a violin for £200 that costs me £110 to buy from the manufacturer, my gross profit is £90. If you divide this by my sales price (£200), my margin is 45 per cent.
So what makes this margin number so important? Well let’s assume your margin is the same across all products and the business costs £200 to run per day, that includes a wage for yourself, rent, electricity, etc. Secondly, let’s assume your business sells £300 on Monday and £650 on Tuesday. This is where the margin comes in.
Whatever your margin figure is, stick a zero and a decimal point in front of it, so for 45 per cent it would be 0.45. Now grab your calculator and hammer in 0.45 x £300 and you should get £135.
This is your profit for the day before daily costs. Previously, I said the business costs £200 a day to run, so unfortunately you have a loss. But do the same for Tuesday 0.45 x 650 = £292.50. On Tuesday you can pay your £200 bills and have £92.50 profit left over.
By knowing what you make on a daily basis you can make the necessary adjustments to ensure you make a good profit every day.
Turnover is vanity, profit is sanity
Too many people are scared off by the calculator – and businesses suffer because of it. As long as you know your margins, you’re always just 30 seconds away from a quick and accurate assessment of your business.
You could be selling £10k a day, think you’re the absolute dogs you-know-whats, but be making no profit. Every day, multiply that sales figure by your margin and see what you’ve actually made (don’t forget to take away your costs). It’s absolutely crazy, the amount of people who do not know their margin and therefore their daily profit, but can quote their turnover for the past 12 months.
Final thoughts. High costs and low margins lead to disaster: high margins and low costs could lead to a lovely yacht in the Caribbean. Good Luck.
For many of us new to social networking and closer to being within Gen X than Gen Y, it takes considerable time to learn the rules and etiquette of social media. And to be honest, many of those rules are only just developing now. As Penny Power explains in this video, we really can learn a lot from the younger generation about being open, random and supportive on social networks, rather than broadcasting our wants and needs to friends online.
Have you taken time to learn from young people around you? They might be able to help you fast track your business.
I’ve always felt that there were two types of startup – those with too much money and those with too little. I’ll leave the topic of too much money for another day, and instead think about the more common problem of having too little money.
When you’ve got too little money, the key is not to spend a penny you don’t need to, and to make sure that every penny you do spend is effective. That’s pretty much common sense, but I think that it’s worth drilling into much more deeply.
One of the pitfalls when starting a business is mixing up the keys to business success with the stuff that has to be done as you become successful. In start up mode, all your effort needs to go into the former and virtually nothing into the latter.
A business bank account, business cards, business premises and the services of an accountant can all be vital ingredients – but not if your business isn’t yet making any sales.
Your efforts and resources should go into working out your business proposition, finding customers and delivering that proposition to them. Make sure that you keep 100% accurate records, and probably set up a limited liability company to protect you from personal bankruptcy, but otherwise focus on starting to make sales and money.
When I set up SellerDeck (formerly Actinic), providing ecommerce services for SMEs, we had two vital objectives. We were trying to sell critical technology to small companies and ISPs, and we also needed to raise funds. I renamed my house “Actinic House” which was perfectly legal and cost nothing. I also joined the Institute of Directors and met all prospective investors in the IoD offices in Pall Mall.
These are the sorts of techniques that I would describe as “guerilla” – getting to your objectives by low cost and unconventional means. You can find all sorts of ideas both online and from other successful entrepreneurs. You won’t get them from the bank manager or the accountant, these techniques tend to be anathema to them. But it’s these that will help you to succeed, not having leather bound accounts.
Negotiating an English country road can be a nerve-wrecking affair. Plagued by single-track lanes, tight bends, and sudden dips, you can never be certain of what’s in store just around the corner.
Similarly, steering your business through a volatile currency market is a real challenge. The pound’s 25% fall in value against the euro over the last year has had major impact on UK businesses. In fact independent research for Moneycorp revealed the weak pound has had an impact on 92% of businesses trading internationally.
It is a tale of two sides. For importers cost pressures have heightened, but for exporters opportunities to profit have been plentiful. So as a country reliant on imports and exports, managing your exposure is crucial, but challenging. Unexpected rate movements can eliminate all important profits.
Despite the uncertainty now and in the future, there are a number of steps any company can take to manage currency exposure and get back in the driving seat. If your business is importing or exporting, and you need to manage the dips and swerves of an unpredictable pound, there are some simple steps to effectively managing exposure. For more info to help your business click here
Or should you have any questions about the currency market, please do post your question and we will get back to you.
Mark Deans, Corporate Dealing Manager, Moneycorp
Starting up a business is always going to be tough and like many things in life, there’s probably never going to be a perfect time to take the leap and launch your idea. For many entrepreneurs, one of the key concerns is acquiring funding to turn your dream into a reality. Doug Richard says that one of the best ways to fund your start up is to seek investment from one of the three Fs – Friends, Family and Fools.
Many people are reluctant to enter into business with friends. What has your experience been? Would you advocate mixing business and friendship?
All start-ups must consider how they pinpoint the ‘relevancy’ between what their business offers and what there website does. Follow the R-E-L-E-V-A-N-T marketing approach and soon you will find your online activities gathering pace.
Relate to your site visitors needs
Spend time understanding how users find your site, what they do when they’re there and how they exit. Building a picture of your typical user will allow you to quickly identify their needs, what information they're looking to acquire and how you may persuade them to interact with you and your business. Knowing the pitfalls encountered on your website enables you to react and adapt to maximise your online ROI.
Engage your visitors
Don’t be afraid to ask. Use your website as a communication tool – not simply as a corporate brochure. Giving your customers what they want – relevant and topical information – will build confidence in your offering. Think of it as a conversational piece: the first question they ask is through their initial Google search, so make sure your page(s) respond to that question.
Learn from your visitors
Know how visitors interact on your website and communicate with them directly. Make sure this critical information is leveraged in your business' best interests. Communicate internally. As an example, if the same question is being asked repeatedly online, see how this can be adapted to your own offline sales techniques. Understanding what your customers' current requirements are from their search requests can have massive impact upon your business.
Excite your visitors
Once you give the end user what they’re looking for, whether product or service offering, catch them there and then. Don’t be afraid to offer them further free information in return for their email address, which will allow you to communicate directly. They're sat there thinking – “GREAT! Finally found what I was looking for” – but we know that potentially a competitor’s website is just a click away. Retain your visitors’ interest by giving them what they want and by offering a little bit more.
Value your visitors’ time
First and foremost – give your customers what they’re looking for. Structure your website so they can find exactly what they’re looking for. Not only does a well constructed website get a general thumbs up from the end user, it's also a great search engine optimisation tool.
Anticipate your visitors’ needs
By using specific trigger terms within search (eg "buy", "shop for", "info" or "help") you can quickly understand your visitors’ needs and wants. If you're a retailer, structure your website to offer both an easy route for product information and an even easier route to buy that product. Certain high value products may require a customer to go away and think about the potential transaction. Anticipate this by offering a link to your site RSS feed, a telephone number or a simple email enquiry.
Nurture your visitors' trust
If the information you provide upon first glance ticks visitors' “Yes, this is what I'm looking for” box, then capture their attention and nurture the relationship. Remember, whatever your industry, the visitor may or may not know of your business and it offering. If your offline sales process is complex, don't simply throw your visitors into a website with "BUY NOW" buttons flashing and scripted content that can be found on any of your competitors’ pages.
Test your message
Sceptical about which approach works best with which visitor? Use free offerings such as Google Website Optimiser, which allows you to offer different pages to individual visitors. This A/B approach allows you to quickly identify which messaging works best and provides you with the necessary focus for future marketing activity.
On social networks, it’s tempting to try and grow your network rapidly by accepting any friend requests that come your way and building a network of strangers. As Louis Gray explains, when thinking about business networking; revenue is only going to come from a small selection of your online community. For that reason, building a network of highly engaged people with whom you have a genuine connection can prove to be a great way to unlock business opportunities.
It’s easy to judge someone’s social media “usefulness” on their number of friends or followers, or assume that low numbers equates to a small and relatively useless network. But it might be sensible to start slowly and focus on quality. What do you think?
There was much to be inspired by at the 2009 National everywoman Conference last Wednesday, but the thing that jolted most of us into unprecedented awe was an animated speech from Allegra McEvedy MBE, founder of healthy fast-food restaurant chain Leon.
McEvedy, instantly deriding the term ‘celebrity chef’, launched into a condensed story of her life, endearing us with her account of a somewhat rebellious and directionless youth marred by the death of her mother, which she spoke of frankly and without self-pity. This was followed by some time gaining experience in the restaurant industry, a stint in the United States, and some botched attempts at setting up a successful business, before finally finding success, fame and, most importantly, happiness, in the much-lauded Leon.
What we like about Allegra is her ‘real-ness’, despite the professional success, despite the MBE, and despite the Observer Food Monthly Award that she was afforded just months after opening Leon. She is warm, funny, full of life, and doesn’t seem to see herself as anything special. To most of the delegates, though, keen to make a success of their own businesses, she is pretty darn special and has an awful lot to teach them.
McEvedy reminds us that it is fine to be human and to make mistakes, in both our personal and professional lives, and that our achievements will be better for it. Openly and with humour, she puts forward the view that a successful entrepreneur is someone who has trialled and erred, and picked herself or himself back up again when things have truly hit rock bottom. Although no longer strictly an entrepreneur herself — McEvedy gave up her role in early 2009 to focus on writing and media work — she was keen to pass on her pearls of wisdom to the entrepreneurs in front of her.
Leaving the stage to a tumultuous round of applause, McEvedy left us with these top business tips to consider:
Do you agree with these tips? What would your top tips for start-ups be?
The software industry has long been monopolised by one provider. As Bob Young explains in this video, traditional software only gives you a certain amount of room to move whereas open source software is a completely different model.
There are two reasons this video may be relevant to your start up business. First, thinking about the software you need to make your business operate smoothly, is it worth considering the open source route for any of your key applications? Second, what can your start up business learn from the closed vs open source software model?
How confident are you in the strength of your brand? Do you find yourself nervously checking your competitors' websites to see what they're up to, only to find your heart sinking at their latest marketing campaign?
If you have a strong brand, if you've differentiated yourself from your competitors powerfully, then you won't be doing this. You'll still probably have a healthy awareness of what other businesses operating in your market are up to: but you won't be lying awake at night worrying about it.
Successful businesses start by defining what makes them unique. They look at what their clients want, what they themselves are good at and what they know they can deliver. And they operate in a niche. They don't get overly worried about what their competitors are up to because they know that to their target clients, their offering is irresistible.
But how about you? Which camp does your business fall into? Do you have a strong brand and a clearly defined niche or are you still looking over your shoulder at your competitors? Either way you'll probably find my Brand Profitably article helpful. You can download it for free on our website. Enjoy!
Fiona Humberstone, Guildford printing.com www.guildfordprinting.com
Such a big part of growing a successful business is ensuring that you’re always thinking of new ideas or making improvements to your current business. But as many small business owners know, coming up with a great idea is easier said than done. If you’re someone who struggles with creativity or can’t easily prompt a brain wave, watch this show to get ideas from a brand which is growing rapidly and improving constantly.
A popular method of tracking and recording ideas is to write them down – or to “always have a notebook with you”. Tell us, when (and where) do your best ideas come to you?
I’m stuck in a Premier Inn in Oxfordshire for the third day… Three more to go… M&S biscuits from the Simply Food outlet at the BP garage are starting to take their toll and having to abstain from the internet is leaving me itchy. Why? Because Premier Inn thinks £12 per day is a fair price for internet access. I disagree. Why am I buying expensive M&S biscuits? Because I’m bored and they’re nice.
The hotel is primarily used by business people. The room rate, at about £60 a night, is fair and everything else is fine (apart from housekeeping popping in while I was in bed). But their internet access is extremely overpriced.
In the end I had to cave in. I don’t mind buying the M&S biscuits, because they’re a treat, but being forced to pay that much for internet for one day left me feeling a little bit cheated. I won’t be doing it again.
It got me thinking: how small businesses pitch their prices is crucial. A lot of small start-ups set their prices too high and never get off the ground as a result, while a scarily large amount of others believe their only way to compete is on price and from day one their margins are so low they get trapped and never make a profit.
Over the past few years in the various businesses I’ve had experience of both. So how do you know what price is right? Test, test and test again. Just because the price seems right to you on your calculator at home doesn’t mean your customers will agree.
Cheap isn’t always the answer
At the minute, other owners I know are constantly telling me how their businesses are struggling, as they regale tales of half-price sales and the like. For me, the most important figure in any business is its gross margin. Sales mean bigger turnover yet smaller margin, so as a rule I’m not a terribly big fan of sales.
But it got me thinking, although we’re doing perfectly fine during the recession with some sort of sale – could we do better?
Not wanting to slash prices on Karacha.com, my online music instrument shop, I decided to carry out a little experiment. I sent out some of our sale products under a different name at sale prices. I wanted to see if people would buy solely on price.
Every week or so I adjusted the price to see what effect it had. At first, the weeks went by with no difference and no real sales, but then I hit a particular price at which people went nuts for one product and we sold a lot. Slight problem: the price we reached was horrendously low, no profit and no point. Sale Over? Not quite.
At the same time I was doing exactly the same experiment with another product, but things turned out differently. I thought we might have excess stock of a particular item, so I sold some at £20 off, but unlike the first experiment where £20 made no difference, sales of this second product went from one or two per day to 10-20. Quick as you like this offer has been applied across all of Karacha and it looks like every bit of excess will be sold by Christmas at a tidy profit.
This shows that what’s right for one product might not be right for all and it’s worth giving your customers options and seeing how they react.
My advice when starting out is test, test and test some more, but always go for slightly higher prices, because next week, month or year you can discount if necessary. Having to increase prices can lose you customers.
If your business genuinely brings something new to the table, build good margins into your prices, have the confidence in yourself and your products, if you do, then your customers will.
My first blog post on setting up a business at home proved popular - I thought I would follow it up with some tips on the regulatory side to working from home.
I'm always looking for new topics to blog about so if you have any suggestions - do get in touch or leave a comment below.
I lost count of the number of times my parents told me this rather irritating expression when I was small. However, recently I have met two women entrepreneurs who demonstrate just how true this old saying is. Both have used their skills in and love of cooking to create successful businesses.
Escaping from an unhappy marriage, Lely arrived here from the Far East with a tiny baby. How was she to earn a living? For the initial few years, she set up a stall in a market, baby in tow, selling culinary products from her native Thailand. Gradually the business flourished. She rented a small shop, and started producing Thai food. The combination of her excellent cuisine and her warm personality, no doubt seasoned with a hefty dose of determination, ensured a steady growth in clientele. First one restaurant, then another opened, and now Lely has a thriving chain, despite the recession, serving excellent oriental dishes.
Redundancy of her husband, who had been the main breadwinner, was the reason for Sue’s business start-up. She had been a nursery school teacher, but realising that the family needed more money than this would produce, she decided to combine her love of cooking with her teaching skills. Sue transformed her garage at home into a large kitchen, where she could accommodate a small class of students. Cleverly she marketed herself not to the bored housewife wanting to know the finer points of an asparagus souffle, but to those who might not have any cooking nous, or indeed any domestic skills at all. She now has a steady stream of students, such as kids leaving school or uni, or kitchen-incompetent guys, and provides practical, useful guidance at all levels. She also makes it fun. Now there’s a challenge!
If you're in the process of formulating a new brand for your business, you should take a peek at this show. See how they did it (with huge success) at Innocent Drinks.
Definitely food for thought. Liquid food perhaps?
So you're starting a business? There's plenty to think about, and you'll be spinning lots of plates all at once. But one thing you should really have lined up is a smart social strategy. What does that mean? Hear what Louis Gray had to say on a recent trip to London...
If you operate a limited company and work at home, why not rent a room to your business?
Then you can offset the rental against your business profits and reduce your overall tax bill.
So how does this work?
Well there are just a couple of things you need to do to put this in place.
You would need to put a rental agreement in place between you, the home owner and your limited company.
Your accountant should have a standard agreement available for you to use. So this will not be an onerous task.
Calculate the rent
The rent that you charge should be equal to the amount that the room in the house costs you.
That means that the income received is equal to the costs and there is no personal profit on the rent. So you do not have to pay any income tax on the rent received, although the income and costs will need to be shown on your self assessment tax return – just a couple more boxes to complete.
Let’s take an example to show how this works.
Sam runs her business from home. She works in one of the bedrooms. The bedroom is used exclusively for business during the week but serves as a guest room at the weekends.
Her house has a total of six rooms.
Sam has added up her mortgage interest, council tax, utilities, insurance and broadband costs and they amount to £12,000 for the year.
She calculates the rental charge as follows:
Cost per room = £12,000 divided by six rooms = £2,000.
She uses the office five out of seven days, so charges 5/7th of the room cost to the business.
The rental charge is £1,428 for the year.
Sam is paid this rental from the business.
The business records this as a cost in the company accounts, which reduces its tax bill.
Sam enters the figures onto her self assessment tax return but has no further tax to pay on the amount received from the company.
The rent charged will be based upon your own circumstances. For example if you rent your property you can use the rent paid instead of the mortgage interest in the calculation. So you will need to do your own specific calculation.
Have a chat to your accountant about how to get this in place. They should be able to help you with the figures and the rental agreement to ensure that you are claiming this tax deduction for your business.
Elaine Clark, www.cheapaccounting.co.uk
"I keep six honest serving men - They taught me all I know, Their names are what and why and when -- And how and where and who."
Six Honest Serving Men, Rudyard Kipling, 1903
As you and I know the secret to successful selling is to ask the right questions.
If we do this skilfully, we become seen as a problem solver and the dynamic or ‘power base’ shifts from a seller/buyer relationship into that of two equal partners. You are then not selling…you are simply helping the customer to buy.
In order to sell effectively we need to know what will make the customer buy from us. In order to do this we need to ask them….and listen wholly and exclusively to what they say!
A highly effective type of question is known as an ‘open question’. These are often prefaced by either ‘who?’, ‘what?’, ‘when?’, ‘why?’ ‘where?’ or ‘how?’.
These are all questions that will encourage the customer to talk about their current situation and needs. If we are listening attentively (and many sales people I work with do not!) then we are able to gather the right level of information and are able to tailor our ultimate presentation to show how we can meet their specific and stated requirements.
Here is a list of some of the possible questions:
‘Who’ questions • Who will be using the product? • Who will need to be trained to use the product? • Who will sign off the order?
‘What’ questions • What problem are you looking to solve? • What impact does this problem currently have? • What do you look for when you are buying new widgets? • What else?
‘When’ questions • When are you looking to introduce the new widget? • When would you need delivery? • When would you want the training programme to start?
‘Why’ questions • Why do you say that? • Why is that an issue for you? • Why do you need to change the process now? • Why do you think that?
‘Where’ questions • Where will the widgets make the biggest impact? • Where will you need the delivery to go to? • Where do you get your widgets from currently?
‘How’ questions • How can I help you solve that problem? • How quickly will you need the widgets? • How would that work in practice? • How will this change the way you currently work?
A word of caution here…in order to maintain rapport it is important to use open questions naturally and conversationally otherwise it could feel to the customer that they are being bombarded.
Likewise, if we can link our next question to the last customer answer we are more likely to demonstrate that we have actively listened to them, show understanding, and ultimately be more successful in matching the benefits of our proposal to what the customer is looking for.
This linking of questions takes time and lots of practice but is superbly effective.
It's not easy raising finance for any business right now, least of all a start up. Which is why it's worth taking a few moments to find out how Simon Woodroffe managed to finance Yo Sushi, when the banks were turning him down.
Has anyone else out there been creative with early stage funding for their business? Please share your story.
Penny Power, founder of Ecademy.com, explains why anyone starting up a new business should be active on social networks.
1. Think of a business name. If you need them, make sure that a suitable domain name is available (for emails and website). If you are struggling to find a name, think about using your own name – credibility is essential and your willingness to use your name will reassure potential customers. Alternatively, stick with the simplest explanation of your business that you can find. “My Bookkeeping Online” is a good example of this.
2. Set up a bank account – OK – I know I said easy but I may have stretched the truth slightly! I’m afraid not much is easy when it comes to banks. ALWAYS have a separate bank account, even for very small businesses. Using your existing personal bank should make things slightly easier.
3. Buy a wireless router and a laptop. It gives you the flexibility to work anywhere inside/ outside the house.
4. Hosting your email. Have a look at Google Apps. It is only £35 a year, and it enables you to use your business email address using the Google platform – I use it and I love it – it’s cheap, and of course, accessible from anywhere.
5. Commission a website – look for a company that will build it and “optimise” it for you at the same time. By optimise, I mean give it the best chance of appearing in the free searches in Google when someone searches for a product/service you sell.
6. Install a separate telephone line – or have a separate mobile. You cannot afford to be competing for a telephone line! You may also want to look at Skype – it’s incredibly cheap and the quality is pretty good now.
7. Consider getting a smart phone, particularly if you are out and about a lot. It is a great way of staying in touch with your email.
8. Use your personal car for business trips and reclaim 40p per mile. There is no value these days in having a company car, unless you need a commercial vehicle.
9. Think about your neighbours – if what you are doing is likely to disrupt them in anyway, speak to them about it early, and make arrangements to keep them happy.
10. Running a business from home can be disruptive for other members of the household. So, try and set things up so that home life and business life to function side by side. Both my wife and I regularly work from home, sometimes long into the evening. An example of one of our “rules” is that business calls are always made/taken outside the room we relax in – and it works very well.
Look out for my next blog post on setting up a business at home - regulatory.
If you're starting a business, or you've already started one, this is four minutes worth investing. The video below features some of this country's most successful entrepreneurs. Their words of wisdom could save you a lot of time and money - or even your business!
If you have an idea for a business and want to progress it, you are probably thinking in earnest about your business plan. If you are looking for outside finance, you are no doubt keen that the business plan will be a great marketing tool for your idea to banks or other investors.
Years ago, when private equity was still called venture capital, I was involved in funding start-ups. I would look through countless business plans, trying to sort the ‘possible’ from the ‘dream-on’ varieties, with a view to investing in the best. Some plans were back-of-the-envelope affairs, with enthusiasm but no financial viability analysis; some described in depth inventive products, but showed no realism with regard to cost of production; others assumed world domination in a few months.
But what really put me off was the business plan that plainly had been written by someone other than the people who were going to make the idea happen. However slick the document, with every possible detail carefully analysed in beautiful spreadsheets, if the words do not reflect the essence of the entrepreneur – his enthusiasm, her conviction the idea will succeed, their commitment to the project – then the proposal will lack that essential ingredient that is the reason for making an investment. The basis of our decisions was mimicry of estate agents’ ‘location, location, location’ replacing the key word with ‘management’. Yes, of course we wanted to see that the projections made sense, and that the amount of investment required was adequate and would be wisely spent; that there was indeed a market for the product or service, and that it would be sold appropriately. But the key was always: is this the right person to make the proposed business succeed?
So if you do use professionals to help compile your business plan, make sure that the final result is imbued with your DNA, and that it convinces the reader why you are the one to turn the plan into the success you describe.
When selling it's often very easy to forget that a feature is what a product is… an intrinsic characteristic of the product or service.
Examples of features are:
All very interesting (or perhaps not!) but of no real concern to the buyer who really wants to know what the product will do for him/her.
In other words, the benefits.
For example: “This promotion will increase your sales (feature) which means that you will get increased turnover and profit” (benefit)
Or…. “The new display unit is compact and eye catching (feature) which means that you will get more impulse sales at the till points (benefit), therefore increasing your profits” (benefit)
Never forget… the product features are important but they are unlikely to clinch the sale without making the link in the customer’s mind to the specific benefit they will derive from the product.
That is what the customer is really interested in!
Any type of vehicle can be used to deliver cargo, freight or precious items. Most commonly you will see small vans, although once upon a time it was lots of motorcycles.
What happens if someone causes you to have an accident? Or you hit another vehicle? How will your business operate if your main tool for work is out of action?
When starting a courier business, insurance can seem like a big expenditure. People know exactly what they are getting when they buy a van, but insurance can be a bit fuzzier. For example, do you really need insurance at all to be a courier? After all it's only delivering stuff.
The answer to that question is a resounding yes, it's essential for a courier business to have insurance. What type of insurance is down to the business owner. Insurance for couriers comes in several types:
Goods in Transit Insurance covers the potential damage of goods on the vehicle whilst in transit. Goods in Transit doesn't cover all goods, so check what your policy covers.
Light Haulage Insurance offers similar cover to courier insurance and goods in transit but for a limited amount of drops per day, often 3.
Hire and Reward Insurance covers you for the carrying of other parties' goods.
At the very least you need hire and reward insurance. It may not give you as much 'cover' as the other options but to be without insurance is a situation that may cost you business. Customers are reluctant to let their goods be transported and delivered without insurance no matter how safe you think you are!
It's quite common for glass, fine arts, ceramic, antiques and second hand goods to be uninsured under the 'goods in transit' or courier insurance policies.
These need to be specified as add ons to your policy when you talk to your broker. Make sure you find out what is excluded and whether it is financially beneficial to have these added on before you buy your insurance policy.
If you decide to trade without insurance, stop for a moment and think... How will you pay if your clients goods are damaged in an accident? How will you continue with your business?
Sarah Arrow is co author of the Complete Courier guide which is an essential guide for self employed couriers looking to start their own courier business. It can be downloaded from http://www.thecouriershop.co.uk.