Is business insurance a good economic barometer for UK plc?

If you go back just 10 or 15 years, it was not easy to get hold of detail or information on the economic state of the UK. If you were a financial journalist or worked in the Treasury, you would have access to this information. But the average person in the street, particularly those that are in business, had to rely on what was drip fed through on the news channels and in the broadsheets.

Nowadays though, everything is different, information overload is an often used phrase. The reason it is used a lost is because it is quite simply true. The more you look the more information you find and the more information you find, the further and deeper you may want to delve. Then, three days later, you have more information on the economic good, or ill, health of the country than you could ever deal with.

So, if you are thinking of starting a business or expanding your current one, how can you get some sort of handle on whether you will actually have any customers coming through your doors. Equally, if not more importantly, you may also want to know if these customers are going to buy your products and pay for them within the credit terms.

For this sort of information, you cannot always rely on the official statistics. This is not to say that they are inaccurate or not to be trusted. The problem with them is that they are always out of date. Even the quarterly economic growth figures have to be re-assessed and reviewed constantly because they are always two to three months out of date.

Whilst we are not suggesting that you phone up your local business insurance broker and ask them whether you really should start that business you have always dreamed of, you should take heed and advice from as many quarters as possible.

There is absolutely nothing wrong in speaking to local financial services people to see how the land lies in your area to start, for example, a family dining restaurant. You can speak to an insurance broker, a bank business manager, a commercial estate agent and a solicitor. They should not charge you for you bending their ear for 10 minutes, because it could prove invaluable. What happens if the bank manager says that there is a similar proposition for which they have just provided funding for? This would hopefully stop you in your tracks and make you re-think what you want to do.

A few years ago, the local town in which I live (UK population of 60,000) was devoid of a premier takeaway outlet. It had the usual fish and chips and fast foods, but it did not have a decent pizza takeaway. So, I duly went down the process of looking at franchising a national brand name and the investment was, at that time, £70,000. I spent a few weeks looking into this, quite seriously, and was about to approach the bank when a rival franchise outlet, which I had discounted for a couple of reasons, opened up.

This of course put the complete stoppers on my idea, but it just goes to show that I should have sought advice from more than a tight, inner circle.

So, what can a business insurance broker tell you about the economics of UK plc in September 2010? That times are still tough, the job market is still in very ill health and the necessary coalition cuts are starting to take us back a few steps.

Businesses are still closing and canceling their cover, even more are simply choosing to go without cover. But, the light is there at the end of the tunnel. The UK will emerge leaner and keener and, this is just a guess at this stage. But after the successful 2012 London Olympics, the recession will be something that people remember as we will be well and truly past it.