• Swindon & Wiltshire Experts
• Wednesday September 25 2024
• Author Name: Dave Southby

Long-term financial decisions can help business owners weather the Budget and beyond – Dave Southby Financial Planning

Labour will present its first Budget in 14 years on October 30. Prime minister Keir Starmer has warned there will be difficult days ahead financially. Dave Southby of Dave Southby Financial Planning takes a look at some long-term strategies that can help business owners weather political and economic storms.

There’s no doubt changes are coming, particularly for business owners, with the recent change in government. It’s been made abundantly clear by our Prime minister Sir Keir Starmer that there will be difficult days ahead financially – and this will undoubtedly impact the small business sector.

While I’m not going to debate what could happen, or the rights and wrongs, we will all know more after the Budget on Wednesday, October 30.

To deal with change – and I’m talking change over the long term – planning finances is critical to long-term success both in business and in terms of personal aspirations. No business or individual can rely on pure luck to succeed, planning and taking action are central to achieving those aims.

Today I’m going to focus on the personal aims of business owners as often, as they work in the day-to-day of their own companies, they can put their own needs aside and then, if situations change, this can lead to poor decisions being made in haste. Here are five things to consider and which need to be planned:

How will you exit your business?

Planning for this really matters if you really care about your business and, if relevant, your team. A financial adviser can talk through your finances when you’ve considered your own options first. For example, will you sell to another company? Will you pass the company on to your team through an employee ownership trust? Or will your company stop when you stop?

How will you save for your pension?

Many business owners save little or nothing into a personal pension. One common theme I hear is ‘my business is my pension’ yet it’s a very risky strategy. How do you know if your business will be worth anything? How do you know if your business will continue to succeed? Do you have control over all of the moving parts to ensure that you will make enough to fund your ‘retirement’ goals?

What will happen to your business if you become very ill?

This can be difficult to think about but it’s not uncommon for a key person in a business such as the founder, to become ill and for the business to founder as a result. Various insurance protection options can help with this risk so that money is available to recruit, or outsource until you are back on your feet. Most of us will know someone who has suffered ill health for a period and one in two of us will now get cancer in our lifetime. That’s just one scary fact. Consider carefully what would happen if it was you?

What will happen if you die?

This might be a morbid subject but one which is very important and needs consideration. You may have a Will in place but probate can take months to complete, so who will have access to the business accounts to ensure staff & suppliers are still paid on time? Who will take over the management of the business? If you have other shareholders, what do you want to happen to those shares on death? Do you want the option to buy them from the deceased family?

Plan for future goals

It sounds obvious but while business owners tend to be familiar with planning company goals or targets – they often don’t consider what they want later in life. Do they want to retire completely? Or part-time? Or go on a luxury holiday every year from the age of 65? Planning for personal goals is as important as planning for business goals. A good financial adviser will address both of these areas if relevant to their client.

Dave Southby of Swindon-based Dave Southby Financial Planning offers financial planning to individuals, families and business owners to plan their finances aligned to their personal and business goals and dreams. https://www.davesouthbyfp.co.uk/