A financial planner can help a business owner in a number of key areas:
Business Protection – Key Person
Each business usually has a handful of staff without whom the business would struggle. This might, for example, be a key member of the sales team, designer or skilled labourer.
Should those people be unable (for health reasons) to contribute, the business could receive capital or income to replace them or the lost revenue.
Business Protection – Shareholder Protection
When business ownership is shared, the consequences of any death or disablement of any shareholder are dramatic on those remaining shareholders.
Agreements are often necessary to stipulate under what circumstances, price and conditions any shareholding should be transferred.
Even with an agreement in place, remaining shareholders may not be able to find the capital required to purchase the shares putting the future control and governance of the business under a cloud.
Insurance arrangements are commonly used to provide the capital and ongoing insurance reviews would ensure that despite business changes, the business owners can be assured that the future is secure.
Under Superannuation legislation, business owners can purchase their trading property within their Superannuation fund(s).
Having the company pay rent to your own Superannuation fund may prove to be tax-effective and property value growth will be subjected to discounted capital gains tax. The property need not be sold at retirement and could generate valuable retirement income.
Assessing whether this is cost-effective, tax-effective or suitable for you will require analysis and advice.
Gauging when retirement is affordable and feasible will influence the timing of any business sale or succession plan and also the extent to which you may wish to be retained as an employee/consultant to the company post-transfer.