For many years I regularly commuted from Perth to Geraldton, helping small business owners, farmers and fishermen with their financial planning needs. In the past a lot of my advice was only centred around Business insurance, which is very important (especially when carrying large levels of debt), but as I have matured and been more exposed to Business Owners, I have concluded that there are other very important elements that make up quality business advice.
1) Protect: Have suitable protection strategies in place, which not only protect you and your business, but protect your loved ones. This ranges from having suitable life insurance in place to pay out existing shareholders of your business in the event of your death, to having suitable Key Person insurance in place, to replace you in the event of short-term sickness or disability. Yes, the most successful business owners can get sick or disabled and here at Croeso Financial Advice, we believe it’s important to have a robust, honest conversations, about the risks that your business and family could experience in the event of such situations. Even if you are not in a position to make the changes needed, it’s important that you at least understand the risks and have some sort of Plan B.
2) Extract: Most successful businesses owners drive all money into their business, with their overall goal of making the business more profitable. Naturally this is the investment they trust and can control. As Financial Advisors, we are on the fence. We of course believe commercial growth is important, but we also want that profit to translate into your personal assets as well. We drive our Small Business clients to pay down personal debt, build up personal savings and of course not neglect their retirement savings. In the good years we will push you harder, and in the poor/average year we will scale back. Secondly though, we believe that not every business story will have a happy ending and may not be worth much on paper at retirement. This means that if your business has achieved a high yield during your working life, but is simply dissolved on retirement, not extracting enough throughout your working life, will be a very sad ending.
3) Unite: We believe that the best strategic planning works when everyone is onboard and adding to the table. Therefore, working with your Accountant, Lawyer and Broker is essential to ensure you get the best outcome overall. This means there will be times when I disagree with the suitability of a strategy recommended by your other professional, and it’s my job to be honest and upfront with you, so that you can make an informed decision. For example, the purchase of a commercial building by your SMSF, may not always be right for you, even if your Broker is pushing you for the sale of a century. My job is to think holistically both for you as a small business owner and for your overall personal needs. After all, being a small business owner, should be about walking away from the process, knowing that it has been an experience that has paid you well and helped build your best life.