ADVICE | Running your own business
Now that you’re taking the first steps, pause for a moment to consider some often-overlooked factors that will set you up for success. While these may not be as exciting as dreaming up your vision or designing your marketing, building these tasks into your planning will give you the best chance to hit the ground running.
Some questions you should consider…
- Will your business be able to continue paying its regular expenses such as rents, salaries and power costs if you’re injured and unable to work for several months?
- What would happen to your business if legal action was taken against you because of an injury occurring on your premises?
- How would your family cope financially if you were unable to work in your business for six months?
- How long would it take to get back on your feet if your business lost a key employee such as a senior sales executive or production manager?
- Would your business survive if you or a business partner were to die unexpectedly?
- Who will run your business after you’ve retired?
- Would your business partner be able to buy out your share of the business from you or your family if something happened to you?
- Would you still have assets to fall back on if your business failed?
- Are you relying on the sale of your business to support you in retirement?
- Are you taking full advantage of the tax concessions available by investing in superannuation?
Whether you’ve been plotting your business for years or just recently decided to go for it, starting your own business is a big leap.
Unless accounting, finance and law are your specialities, you’ll probably save time and frustration by hiring experts to help you get underway, grow or even exit the business. A good accountant and lawyer will help you to minimise liability; while a financial planner will help you plan for success, for example by suggesting a business structure or helping to separate business and personal finances.
Setting up in business is a challenge, but you wouldn’t be doing it if you didn’t believe in what sets you apart. There’s no reason to do it alone though.
As your business grows, usually profits are growing too, along with the number of employees you may have. Sometimes this means the structures for business succession and your insurance cover will need to be reviewed and changed accordingly.
As many owners don’t accumulate super savings through salary payments, the business itself is often the retirement plan.
A financial planner working with your accountant can look at ways of transferring wealth from your business into your super gradually over a number of years. This allows you to maximise the tax benefits of saving and investing through your super without compromising the value, stability and future of your business.