Financial Planning for the Business Owner

Financial planning for success

20scareermanagement.jpgA business owner will benefit from an individual personal financial plan to identify and track progress towards financial goals.  However as a business owner, you are also likely to benefit from a business financial plan as well.  This plan will display your financial accounts in alignment with management accounting information allowing you to look at your statistics and see how you are performing against your objectives and gain a comparison against similar types of businesses globally.

You can download a PDF format example of a financial plan.

Income cover for key business people

A plan to protect the income of shareholders and key people can mitigate the business’s risk by assigning the responsibility for paying the wages and salaries of key people to an insurer. This means if one of the shareholders or key people are unable to work due to sickness or accident the insurer will pay their income until they return to work.  In addition they will provide support and assist with rehabilitation in order to get the person back to work sooner.

Business expense cover

This will pay a portion of the business expenses if a key person becomes disabled and unable to work.  Typically the portion of the expenses covered is the equivalent to the percentage of the revenue generated.  For example, in a three-shareholder business, if one key person contributes 40% of the revenue and they become disabled, the business expenses insurance cover would pay 40% of the monthly business expenses.  This can take a huge financial pressure off the company at a critical time.  At Iconic Financial we have seen cases of uninsured businesses fail in events like these; with protection you can have peace of mind the business will be protected should an unforeseen event happen.

Succession planning

A business owner may have created a business for any number of reasons. In all cases one of the reasons will be because they want a better future for themselves and their families. Some businesses are what are referred to as a cash cow; they are so dependent on the skills and personalities of their owners that the business cannot be sold to a third party.  However other businesses will at some stage in the future be sold, either to a family member, employee, or to a third party.   Since this influences the way a business is run and developed it is never to soon to think about a succession plan.  

Locum Cover

For certain businesses it is possible to find a locum to fill in for the business owner should they become sick or disabled.  An obvious example would be a doctor, but there are many other situations where this is applicable.  It is possible to insure the cost of finding and paying the salaries of the locum to help ensure the continuity of your business.

Business Continuity Insurance

This is a form of business insurance protection that is very flexible, it provides funding to help ensure the continuity of the business for a range events.  Whilst certain financial requirements must be met to qualify for the cover, there are no restrictions of how the money from the insurer is used.  Talk to us to find out more and to see if you qualify.

Fire and General Insurance

Fire and General Insurance provides protection to physical assets such as equipment and stock.  It also provides cover for such things as:

  • Loss of profits in the event of fire damage (for example).

  • Accidental damaged caused to the property of a third party, usually a customer.  This can be covered with Public Liability cover.

  • Errors made by professionals in the normal course of business that causes a financial loss to a customer or client.  Professional Indemnity Insurance can manage this risk.
These risks and insurance protection should be regularly reviewed.  If you have not had a review in the last year or two, talk to us at Iconic Financial and we can refer you to a specialist professional in this field.