Welcome to our second series of articles focused on the advantages for business owners of collaborating with financial planners. See here for our first blog of the series.
Our firm excels in providing comprehensive financial planning advice to business owners, seamlessly integrating our services with our Corporate team to provide numerous benefits to our clients.
From our experience, business owners are often deeply involved in the intricate details of their company’s operations and have a clear vision for their business’s future. Although, when it comes to their personal financial plans or specifics surrounding their policies and investments, they frequently lack clarity. Many anticipate that selling their business will be enough for a comfortable retirement, without a clear understanding of what that retirement might entail or its associated costs.
While the enthusiasm for their business and the drive to succeed are essential for success, we can help transform this success into a tangible future for owners and their families, while minimising or managing many of the risks along the way. This series aims to demonstrate how collaborating with financial planners like us can help business owners align their business objectives with their personal financial goals. Please get in touch to discuss your situation and see how we might be able to assist you.
In part 2 of our series, we consider – risk – all your eggs in one basket
It’s a common saying that you shouldn’t put all your eggs in one basket. This is especially true for business owners where we often see close to 100% of their net worth tied up with their business once personal guarantees over property are taken into account. Although they understand their business better than anything else they might invest in, know the industry, and have considered every possible risk they can think of there is always the chance that an unforeseeable change or unavoidable mistake could bring a business down. The chances of this may be extremely small but the consequences for people’s lives would be huge.
So called “Black Swan” events, extremely rare, unpredictable events with severe consequences do happen, the Pandemic, Housing Market Crash in 2008, the Internet Bubble in 2000, etc while these are often falsely claimed to be predictable in hindsight, certainly their scale and timing could not have been foreseen and many well-established businesses have disappeared overnight. One-off mistakes or technological changes also happen and although we would like to think these can be avoided or adapted to, businesses like Ratner’s Jewellers or Blockbuster Video highlight the consequences.
While this is never going to be a pleasant experience if you have mitigated the risk by investing some of your assets in a diverse manner the impact on your lives may be less serious and ideally, you would be in a position where your financial future becomes independent of the success or failure of the business. Whether this be by tax efficiently shifting funds into a pension, investing in property, or holding funds in cash we explain and demonstrate to our clients how this can diversify their overall situation and hopefully give some peace of mind that whatever happens they and their families will be ok.
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In later blogs, we will consider how you might extract funds from the business and what to do with them when you have them.
If you would like to discuss any of the issues raised and start to look at your personal financial plans, please get in touch.
How can we help?
Sam Cawley and Nathan Richardson are Investment Directors and Chartered Financial Planners in our specialist Investment Management team.
Our expert advisors can not only help you calculate what you need but help you develop a comprehensive plan of how to get there, working alongside our colleagues in the Corporate team and partners in corporate finance and accountancy to deliver a truly holistic solution. There is no need to wait until you have sold your business to engage with a financial advisor, if you would like to discuss how we might be able to assist you please get in touch for a no-obligation initial chat on 0800 024 1976 or via our online enquiry form.
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This article is for information only and does not constitute legal/financial advice. Please contact us for advice tailored to your specific position. Some of the content presented on our website has been generated with the assistance of Artificial Intelligence (AI). We ensure that all AI-generated content meets our high standards for accuracy and relevance.
