Being your own boss can be rewarding and fulfilling, but also incredibly challenging. That’s why it’s important to future-proof your hard work by taking steps today that will prepare your business for tomorrow.
When you’re running your own business, it’s demanding enough to keep up with the day-to-day, which means it’s easy to lose sight on the big picture. But without careful planning, your business might not be prepared for whatever the future holds.
Here are 5 essentials that every small business owner should factor into their business plan.
Make sure you structure your finances so your personal assets and business assets are kept separate. As a minimum, you should have a separate business bank account and credit card, and pay yourself a salary. By untangling your personal finances from your business bookkeeping, you may even save time on administration.
Prepare for the unexpected
If anything were to happen to your staff, your equipment or your intellectual property, it could have disastrous results for your business. The concept of business insurance is a veritable smorgasbord of safeguards against unexpected events, with options ranging from vehicle and key person insurance to public liability and professional indemnity cover. No matter what type of business you have, your Financial Adviser can help make sure it’s protected.
One day you (hopefully) intend to retire – and a time may even come when you decide to leave the business earlier than expected. Regardless of when you eventually exit, it’s important to plan ahead so it can be done smoothly, with as little financial impact to the business as possible. Start thinking about succession management sooner rather than later – it’s a good opportunity to evaluate your business and identify its future leader.
Plan beyond yourself
Even with a retirement succession plan in place, there’s always a chance your business could be faced with involuntary succession – for example, if you die unexpectedly. So as well as insuring your business, make sure you’re personally covered against death, disability and serious illness. You can also set up a legally binding buy-sell agreement that sets out how ownership of the business will be transferred in the case of involuntary succession. And to be certain your assets will be distributed to your chosen beneficiaries according to your wishes if you pass away, make sure you have a comprehensive, up-to-date estate plan.
Work to live, not the other way around.
Your business is a big part of your life, but it’s important to remember that there’s also life beyond work. Many small business owners find it hard to separate work life and home life, which can cause tension with their loved ones. So if you’re looking to secure your business’s finances, your Financial Adviser can give you the guidance you need to remove some of the stress of business ownership.
This document contains general advice. It does not take account of your objectives, financial situation or needs. You should consider talking to a financial adviser before making a financial decision. This document has been prepared by Count Financial Limited ABN 19 001 974 625, AFSL 227232, (Count) a wholly-owned, non-guaranteed subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124. ‘Count’ and Count Wealth Accountants® are trading names of Count. Count advisers are authorised representatives of Count. Information in this document is based on current regulatory requirements and laws, as at 23 October 2015, which may be subject to change. While care has been taken in the preparation of this document, no liability is accepted by Count, its related entities, agents and employees for any loss arising from reliance on this document.