Financial planning for your business
Having a strong financial plan for both you and your business is important, says Carl Lamb
If you are a business owner, you will understand how important it is to make good plans to ensure efficiency and sustainability. Business financial planning ensures that you are prepared for the challenges that your business may face and that you are meeting your responsibilities as an employer.
The death, injury or serious illness of a key member of the team can have a catastrophic impact on the sustainability of the business and I normally recommend that my business clients consider key person protection. This is a fundamental insurance for the business. You would not hesitate to insure your premises, contents and vehicles, but the cost of a business interruption that would result from the loss of a key person could be even more damaging.
Key person cover will provide a cash injection to give you breathing space while you resolve what is needed to get back on track. Other protection plans can be useful for different business scenarios.
Shareholder protection, for example, can be set up in conjunction with a shareholder agreement to enable designated individuals (such as other shareholders) to purchase the deceased shareholder’s stake in the business from his or her estate, thereby retaining control within the shareholder group.
Workplace pensions are now firmly embedded in our businesses. Many businesses will reach the third anniversary of setting up their schemes this year. If this is the case with your business, you will need to meet the requirements laid down in the rules for that milestone. You
need to review your pension scheme to ensure it remains fit for purpose and re-enrol all those workers who opted out when you first set up the scheme.
We have found that some business owners are unhappy with the scheme they originally set up to meet the compulsory workplace pension rules. In some cases, it’s the performance of their employees’ pension investments that is causing concern. In others, the ongoing administration and management of the scheme is causing issues. The third year anniversary is a great time to look at the alternatives and to get advice about what is available.
Stability is an important factor in the sustainability of a business. Enabling the recruitment and retention of the right people and providing the ability to recover from business interruption should be essential elements of your business plan. Any opinions expressed in this article, sponsored by Almary Green and Smith & Pinching, are subject to change and not advice. The value of an investment and the income from it could go down as well as up. The return at the end of the investment period is not guaranteed and you may get back less than you originally invested. The tax treatment of investments depends on individual circumstances and is subject to change. Almary Green and Smith & Pinching are Chartered Financial Planners. If you would like a no-cost exploratory review to discuss your planning with an adviser from either Almary Green or Smith & Pinching call 01603 789966 or email en[email protected] smith-pinching.co.uk
ABOVE: Planning prevents problems