Stepping into the world of business can be both exciting and overwhelming. On the one hand, the decision to build your own business can allow you to realise your aspirations, free you to choose your path in life and bring inner satisfaction of personal growth and achievement.
On the other hand, being a business owner puts you in the driver’s seat, often leaving little room for errors. Pressure to succeed is on, and the business journey begins.
If you’ve come from a corporate world, you are most likely be leaving behind various important benefits, such as:
• Pension, you may have more than one if you worked for several employers
• Sick pay benefits
• Death in service benefit
You may also feel that additional capital is required to get your business started or take it to the next level. This can strain your ability to save for the future, making you even more dependent on your ultimate business success.
• Does the absence of these benefits make you and your family exposed should the unexpected happen?
• What is your plan for taking care of your financial future?
It is common for business owners to immerse themselves in solving business challenges and dealing with day-to-day operational demands. We mean to get organized and sort out important things, but we rarely do, at least not quick enough. Business owners like you know that they need to make provision for their retirement, arrange income protection and consider life insurance to protect our loved ones and ensure that we do not leave a legal mess and a big tax bill behind. In addition, you may have a business partner, at which point things get even more complicated. Yet we keep putting it off to the next day, month, year.
The decision to delay reviewing your personal finance comes with a cost, as worries about whether we have enough will inevitably creep in and drain your energy. The power of knowing that everything will be fine cannot be overstated.
• Ask yourself if it would be good to wake up every day and know that you and your family are financially secure?
Freeing yourself from financial stress could be the best gift you give to yourself. It is a door to freedom, to a happier and more fulfilled life.
An Express Financial Health Check for Business Owners can help you obtain clarity on how to secure your financial future. To ensure that your business succeeds in the long run you must put on your safety jacket first.
You can get an indication of where you are at by completing the following Express Financial Health Check.
1. Pension Review
Do you know if you have enough money to support yourself in retirement?
Are your investments well organised and easy to administer?
Do you know that your pension fund can be used to buy a commercial property?
Do you need to consider auto-enrolment scheme for your employees?
How would long term sickness affect your business? Your financial security?
Are your loved ones secure in the event of a tragedy?
Should I appoint a locum?
Does the structure of your business take maximum advantage of tax breaks?
Are you paying more than you should?
As a business owner, are you utilising all available tax reliefs?
4. Existing Investments
How exposed are you to market risk?
Are your existing investments good value for money?
5. Debt Review
Have you reviewed your mortgage to obtain a better rate?
Do you regularly review your expenses?
Do you have a realistic budget?
7. Estate Planning
Have you made a Will? Does it accurately reflect your wishes?
Have you registered Powers of Attorney?
Are you aware of the planning opportunities available? The use of a Trust and how this could help you to preserve your wealth for your family?
This is not an exhaustive list, rather a starting point that can help you to identify gaps in your financial plan.
While few people have the knowledge and discipline to figure it out for themselves, many of us would benefit greatly from professional advice and the comfort that a true financial planner can provide at times of uncertainty. We employ coaches and advisers in many areas of life, yet we often leave our finance to chance. I will let you decide whether this is the best strategy.