Australian businesses, run by family members, account for approximately 70% of all businesses in Australia according to the KPMG and Family Business Australia Survey of Family Businesses 2009. This is a very substantial percentage and it is important to note that generally speaking, most family run businesses are so focused on running their business that they fail to plan ahead for those unexpected events which can be detrimental to the business initially, but ultimately can detrimentally affect your entire family who have a vested interest in the business and can be deeply affected, both emotionally and financially, by its’ peaks and troughs.
Business Owners have numerous financial challenges to face and navigate through on a daily basis, as well as the financial pressures of attending to their personal financial planning to build greater wealth.
Given that most Business Owners are very busy working in their business, juggling time to spend with family and attending to their personal affairs, it can be very difficult for Business Owners to also find time to consider and implement important Financial Planning strategies into their Business.
Unfortunately, the harsh reality is that a successful business alone does not create financial certainty for your family, and may not protect your personal wealth. Therefore it is important that all Business Owners have financial planning strategies in place and properly aligned with their business, together with tax minimisation strategies, to ensure the best possible outcome.
Where to start….
Because your business is so closely aligned to the financial security of you and your family, you must address the issue of what would happen to your family if something happened to you?
Whist this question remains unanswered in your business, and no clear strategy has been implemented into your business to deal with this should it arise, then you will be exposing your family to adverse risk and possibly severe financial hardship – not to mention the emotional hardships.
As part of the financial plan for your business, this is not the only key issue that needs to be addressed and planned for. Other important financial planning strategies that your business and family needs include:
As this calendar year draws to a close, and you embrace the beginnings of a new calendar year, take time to reflect on what financial planning strategies are deficient in your business and make a plan with your Financial Advisor to implement the required strategies into your business to ensure that you achieve the best possible outcomes.
Paul Baggetta is the Founder & Principal of Baggetta & Co. Paul Baggetta has been a Taxation Accountant for over 36 years, a Financial Planner for over 18 years and in 1993 qualified as a Real Estate Licensee, holding a Triennial Certificate (currently not trading), and operated his own Real Estate business for property investment clients for over 5 years as a second business.
Financial planning services provided by Paul Baggetta as an Authorised Representative (No. 261469) of Capstone Financial Planning Pty Ltd. ABN 24 093 733 969. Australian Financial Services License No. 223135.
Taxation & Accounting services provided by Paul Baggetta as a Registered Tax Agent (No.61487008) and is a Member of SMSF Association, IPA & NTAA.
The material and contents provided in this publication are informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information alone. If expert assistance is required, professional advice should be obtained.
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