Small Business Financial Planning Essentials

Small business owners are often so busy running the business that planning gets left for later. A few essentials can protect both the business and your personal future.

Keep business and personal money separate

Separate bank accounts make your records clearer, your taxes simpler and your true results easier to see.

Watch your cash flow

A profitable business can still run short of cash. Forecast what will come in and go out over the coming months, so that you can see a shortfall before it arrives.

Set money aside for tax

Tax bills can come as a shock if you haven't prepared for them. Setting money aside as you earn makes them easier to manage. A Chartered Professional Accountant can advise on your obligations.

Pay yourself, and plan for your own retirement

Many owners assume that the business will fund their retirement. It may, but that depends on its value when the time comes. Building savings outside the business gives you more security and more choice.

Protect what you've built

Consider what would happen if you fell ill, or if a key person left. Insurance and clear agreements with any partners can protect the business and your family. A qualified lawyer and insurance specialist can advise on what suits you.

Think about your exit early

Whether you hope to sell or pass the business to family, planning years in advance gives you more options and a smoother transition.