Protecting Your Business

   15 Jul 2019

Business owners have a lot to consider when it comes to financial planning. Whether you are considering the need to protect your partners or family members in case of a death, or investing in a pension fund, we break down some of the options available to business owners.

If you are a business owner, we know that you already have a great many worries about how your business is run and how to make and keep it successful and thriving. You may be investing time and money, bringing in family and close friends as employees, and generally living and breathing your business. Your role is vital to the success of not only your business, but your employees as well. 

There are many things to consider when looking at financial planning options for your business, and we’ll just touch on a couple of them.  Some of the most important options available to you is business protection. Consider what would happen if you were to pass away prematurely? Would your family or business partners be able to keep things afloat? Would your business be able to weather the financial storm of the death of a key employee? Would you or your business partner be able to purchase the shares of the other partner from family members if one of you was to pass on? And most importantly, if you have discussed or considered these things, have those plans been made official. Business protection can come in a few different forms, and you should discuss with your adviser which of these options, or combination of options, will keep your business thriving if the worst happens.

The main options are: 

Key Person Insurance, covers you from the loss of your greatest asset- employees that fill vital key roles. This works much the way that home or fire insurance works, and protects your business in case of an employee’s death or serious illness. While we never like to think of such eventualities, this can be a ‘make or break’ decision for many businesses. 

Business Owners Insurance, also known as Partnership Insurance, can ensure that a business partner has the funds to buy the shares of a deceased partner. This is a win-win in most cases, ensuring that the living members of the deceased’s family or their appointed beneficiary are financially looked after, while at the same time securing the stability of the business. 

Just as important as protecting your business in the case of the untimely passing of yourself or an employee is ensuring that you and your team are looked after when you retire.  Many companies large and small choose to offer Group Pension Schemes, and with changing regulation it may soon be required for all companies to provide the option for their employees. We suggest working with a financial advisor to create a bespoke group pension scheme for your company that will work as hard for your employees as they work for you. This option allows for you to let those who work for you know that you are invested in their long-term success, increasing loyalty and work relations. We work with you and your employees to ensure that their financial planning needs are being met. 

Let’s not forget you, the business owner of course! We work with a wide range of investment firms to be able to offer you the best options for executive pensions. When you choose an Executive Pension, your company makes a contribution into your pension, often in much larger amounts than you would be able to do in a personal pension.  In most cases, this contribution can be offset against corporation tax, and if you contribute personally you can also claim tax relief on your personal tax. These are not the only benefits that an executive pension can offer, and we’ll be diving deeper into this subject soon! 

There is a great deal to consider when looking at the financial planning options for your business, and we want to make sure it’s easy for you. We’ve only briefly touched on the options here. It can be easy to get a bit overwhelmed with the choices, and figuring out what your company actually needs. Our financial advisers are here to help whenever you are ready to discuss the best ways to secure the future of your company.