Do UK’s small firms plan enough for their financial futures?

Small firms account for a large portion of the UK’s private sector, yet many do not always plan for the long-term future.

With many firms owned and operated by their founders or a small set of shareholders, there are a number of financial planning opportunities that exist

Ambitious growth during the early years of a company can use a lot of capital but firms should still try to ensure they have the necessary insurance and financial cover.

Should a major stakeholder suffer from a long-term illness that prevents them from working, or even die, then businesses will need to consider what happens next.

Intellectual capital can be lost, as can contacts and business relationships; all factors that could have a disastrous impact on a company if they limit sales or hit the bottom line.

Having cover to protect against such an instance may not seem like an essential for a business, but it does provide some level of defence should something unexpected happen.

Critical illness policies form one option for cover that can provide reassurances should a business be hit by staff or owner health issues.

Such problems can have an influence across the workforce as pressure on other staff increases when trying to cover other work as well as their own.

Stakeholders can also be affected if they are unsure of what financial damage to the value of a business could occur following death or illness of another major stakeholder.

Without prior thought or having a contingency plan in place, the impact on a business could be huge – acting early is therefore recommended.

A business with concerns could also to seek corporate advisory services, which are capable of providing information on a range of issues that may influence their activity.

Having a clear strategy in place also ensure that expansion plans remain in budget, or that the necessary additional finances exist to cover any unexpected costs.

By Phil Smith

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