As with any income that you and your family rely on, one of the most important things you can do is to protect it with insurance, the same goes for your business.
As a business owner, you need to know your livelihood and likely your life’s work, can continue without you, should you be unable to work or manage the business. Insurance and sound succession planning can help to protect everything you’ve worked for, so it’s vital to understand which insurances you need and who could ‘take the reins’ if you are not able to be there.
Succession planning is about having a realistic plan in place for when you hope to exit your business. There are many options to consider.
Business Risk Insurance
There are a number of speciality and general insurances to protect your business, including: Key
Person Insurance, Life, Trauma and Income Protection, Home and Contents, Landlords and even Travel Insurance.
Key Person Insurance helps to protect you and the other essential people within your business, while Home and Contents, as well as Landlord Insurance, can protect your business assets. Business Travel Insurance gives you peace of mind on business trips.
It’s also prudent to consider how you can prepare for an unexpected change in your ability to work for or manage your business. Asset Protection, Revenue Protection and Ownership Protection Insurance provide financial security for you and your family as well as covering you, your business and fellow business partners or associates.
Your financial adviser will be able to tailor a package of insurances for you, for an appropriate premium and under conditions suitable to your circumstances, to help offset the risks facing your business.
Whether your departure from your business is planned or unplanned, happens quickly or over a number of years, having a robust succession plan in place allows you peace of mind knowing you can respond appropriately if needed.
Some of the key considerations for forming a succession plan include; would you sell or lease the business, appoint an employee to run the business, or pass the business on to a family member? Would it change if something unexpectedly made you unable to work, and potentially before retirement age? If you plan to sell the business, is there someone willing and able to purchase it from you? Can it be sold within your required time frame and at the price you need?
Again, is there someone who could lease your business from you? This approach and selling the business both rely heavily on its profitability, based on the financial accounts, so having them up-to-date and accurate is imperative.
A good succession plan will help you to transition out of your business with the income you need and minimise the disruption of your business operations. For more information visit: www.newcastlepermanent.com.au