Business Planning

Cash liquidity and cash flow is important for any business to thrive.

What is Business Planning?

Business planning is a holistic approach in which business owner(s) and founder(s) addresses each area of their business to be able to carry out the business objectives in the short to long run.

 

Business owner(s) spend a great deal of their time and efforts in building their businesses, but many forget or overlook to integrate adequate business contingency plans and succession plans.

Blindspots of Business Planning

Without proper business planning, business owner(s) are at risk of losing their business interests which result in loss of income (for himself or herself and their respective families) and may ultimately leave debts and unsettled loans and taxes for their heir(s) resulting in a potential change in their lifestyles.

Business Planning

Learning and having the right structures in place will help you safeguard your own business interests. One aspect in which we will focus on is liquidity and cash flow.

Every business requires positive cash flow to run its operations. Having sufficient liquidity is having financial flexibility.

Often times, business owner(s), founders and key person(s) are the true drivers of the company. They possess not only business acumen but adequate experiences and knowledge and carry the vision of the company through the strategies implemented.

In the event that a business owner, founder or key person is incapacitated due to accident/ mishap or diagnosed with terminal illnesses or sudden strokes and heart attacks or sudden death, there are 3 issues in business continuation during succession that arises:

1.     Uncertainty of revenue and operations in company

A key person has significant contribution towards a business’ success. In his/ her absence (through withdrawal or death), the business/ company will experience a transitional period where it may stumble to operate and generate revenue as per usual.

2.     Possibility of closure of business

Businesses may lose its value when the key person(s) are no longer around. Depending on the situation, the heir(s) may decide to close the business or sell the business off (at unfavorable market prices).

3.     Conflicts among surviving owners and heirs

Whether it is a company or partnership, conflicts of interests between heirs and surviving owners might happen usually due to different interests. One might consider selling off the company, while the other party may intend to continue it.

How Do We Safeguard My Business Interests?

With proper mechanisms in place, the effect of the 3 issues highlighted above can be mitigated especially for the business owner(s), surviving business owner(s), founder(s), family members, and heirs.

Safeguard business interest

Some tools may include:

1. Buy-sell agreement with proper sufficient funding

2. Keyman protection

3. Business owner & founder protection

4. EPF restructuring

5. Other tools

 

Every business requires a unique set of tools and it depends on the needs of the owner(s), key person(s) and founder(s) and the nature of the business. Having proper business contingency plans and business succession plans in place empowers business owner(s) to have more control over their business interests! Start planning today with us.

To find out how to best protect your business interests, speak to our wealth advisors today for free consultation with no obligation (that’s our promise!). Schedule a 15 minute meeting by filling out our inquiry form.

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