Even if you’re at a point in your business where everything’s running smoothly, it’s important to make sure you’ve planned for emergencies.
Here are some things to think about, before you make any other plans for your surplus cash.
- Are you covered if something happens to your business?
- Can you manage if your business keeps growing?
- What will happen when you decide to leave the business?
A financial adviser can help you with advice on what to do next with your business.
How much cover is enough?
How much insurance cover you need for your business depends on your circumstances. Here are some factors to consider:
- Insurance products will usually have minimum and maximum amounts of cover.
- Understand your business’s finances, such as your usual expenses, peaks and troughs in the year, and the potential to lose revenue.
- If you have existing insurance for your business, make sure you don’t overlap what’s covered.
- How your organisation is structured—for example, how will your business cope if something happens to a key employee?
If your circumstances have changed, we recommend speaking to your adviser straight away. Or, have a look at your cover whenever you get your annual statement and think about whether it still seems right for you.
You can speak to an adviser to work out your optimal level of coverage and to get a quote.
Do you have a business succession plan?
At some point in the future, you may start thinking of retiring or taking on a new challenge. Which is why a succession plan is something you should look into. There are several options you can consider, including retaining it within your family or selling the business to a third party.
Keeping it in the family
You need to think about which of your family members will take over the business. Is there someone with enough knowledge and commitment to continue your work?
Selling it to a third party
Ideally, the proceeds from the sale should reflect how much you’ve invested in the business over the years. This is particularly important if you are selling the business to fund your retirement. Also consider how you’d go about finding a prospective owner, how long it will take to sell the business and what its value will be (including goodwill). Another important factor is the potential capital gains tax that may need to be paid from the sale.
An adviser should be able to guide you and help put a succession plan together.
How can an adviser help?
Getting the help of an adviser may be one of the best investments a business owner can make. An adviser may be able to help:
- set up or recommend the best super arrangements for your business
- protect your business through insurance cover and succession planning strategies
- suggest investment options for your business profits.
Important informationShow more
It’s important to consider your particular circumstances and read the relevant Product Disclosure Statement or Terms and Conditions before deciding what’s right for you. This information hasn’t taken your circumstances into account.
This information is provided by AMP Life Limited. Read our Financial Services Guide for information about our services, including the fees and other benefits that AMP companies and their representatives may receive in relation to products and services provided to you. All information on this website is subject to change without notice.
The credit provider and product issuer of AMP Bank products is AMP Bank Limited, Australian credit licence 234517.