Business protection - do you need it?
The day-to-day pressures of running a business could mean you rarely get the opportunity to think about the 'what-if?' scenarios that face you every day.To help you best prepare for the future you should ask yourself a series of health check questions that will potentially highlight any potential dangers to your business.
- Would your business be able to continue paying any loan payments if the business owner or key person died or suffered a critical illness?
- What would be the effect on overall cash flow if you or one of your fellow business owners died or became seriously ill?
- Do you have sufficient funds to buy the available shares of the business and retain control if a shareholder / partner died?
- Could your business borrow more money if cash flow were affected following the death of a key individual or shareholder?
- Are you aware of any additional security you may have already provided to your bank for any existing debt?
- Do you have a succession plan in place if one of the shareholders/ partners were to die or become seriously ill?
Most importantly when did you last review your business protection plans with an independent financial adviser who specalises in business advice?Business planning is more than just growing sales and profits – think about the risks too.