Tax, investments and pension rules can change over time so the information below may not be current. This article was correct at the time of publishing.

Financial advice for small business owners in the UK

If you are a business owner, entrepreneur or are self-employed in the UK, you may have complex finances. It is likely to be hard for you to address your finances properly if you are spending the majority of your time and effort focusing on the day to day running of your business.

Here are some financial planning tips that business owners may find helpful.

1. Write a business plan

A business plan is a document that outlines your business model, goals, target market, future plans and business financing. A business plan is a good way to set objectives for your business and you can monitor performance accordingly.

Having a business plan also makes it easy for you to share your strategy and identify future business needs so you can budget for these in advance, such as additional staff or resources. A business plan can also help business owners to make key decisions such as determining popular products and servicing and establishing pricing to cover costs.

If you require a loan or additional funding to expand your business, having a business plan in place is essential to pitch your business to potential investors or supporters. This will enable to them to see potential growth of the company and future plans that their money will be used to contribute to. It will also make it clear what potential returns they could expect and how much risk they could be taking.

2. Check you have the correct insurance policies in place

Many business owners that we work with do not have adequate cover in place for business risks. Protecting against risks will help make sure your company runs smoothly.

At Four Wealth Management, we can help you to set up income protection insurance. This is designed to replace a portion of your salary should you be unable to work due to illness or injury.  This payment can continue until retirement. The premiums are often affordable, yet very few individuals considered taking out an income protection policy.

When a business partner dies, the value of their share in the business is included in their estate and distributed according to their will. The beneficiaries might not be interested in running the business and the business might not have funds to buy the deceased partner’s share from their family. Business protection is an effective way to help keep continuity in the business. It is a life insurance policy that provides funds to the business which can be used to purchase the remaining shares from the estate. The cover is combined with an agreement between the partners on how the remaining shares should be bought and distributed amongst the remaining partners

At Four Wealth Management, your financial adviser will work with you to determine the highest risks to your business and will let you know which policies will help you to protect yourself and your business.

3. Take Financial Advice

Many small business owners are preoccupied with the day to day running of the business and making sure their clients are happy with products and services. This means small business owners have very little time to focus on business finances and a financial plan.

Financial planning is the key to business success. At Four Wealth Management, our business financial planning service could add value to your small business. It will save you time and give you peace of mind knowing that your business finances are in order.

The financial plan should be reviewed regularly against the business performance to check the business is on track. Reviewing current performance will allow you to identify strategies for growth.

Find out more about our small business financial planning service

4. Have an exit strategy

Selling or transferring ownership can be a complex and time-consuming process. You need to make sure you have planned the sale in advance and allowed time to collate all financial records that a potential buyer will require. Having the business finances in order will help show how profitable the business is and can increase the valuation.

As above, an insurance policy can facilitate an exit in the event of death.

Prior to and during a business sale, a financial adviser can help you to develop and execute an effective exit strategy

5. Managing your retirement

After selling your small business, you may have significant financial assets but little experience in managing your own assets. Your financial adviser can create a bespoke investment management plan for you and advise you on the most suitable pension and retirement plan for your circumstances.

Your investments can be tailored to create a monthly income for you, if necessary, to replace the income you used to receive from your business.

Contact us today to book a no-obligation financial review meeting

Exit strategies may include a referral to a service that is separate and distinct to those offered by St. James’s Place.

Enquire Now

If you have any queries or would like to arrange a face to face meeting with an adviser for a no obligation review of your personal finances, simply book a call back using the form below. Alternatively, you can call us on 0117 973 0500.

The Partner together with St. James's Place Wealth Management plc are the data controllers of any personal data you provide to us. For further information on our uses of your personal data, please see the Partner's Privacy Policy or the St. James's Place Privacy Policy.

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