AXA FINANCIAL Planning Gold Coast is urging business owners to better equip themselves for the unexpected, to ensure financial security, protection and success.
In the current uncertain financial climate, it’s become increasingly vital to be certain your company has the right backing to ensure business could continue as normal, should anything go wrong.
In order to meet this demand, AXA Financial Planning Gold Coast are tailoring business succession plans specific to individual businesses, to ensure they are well prepared for whatever the future may hold.
Managing director Don Pilcher said it’s important individuals and companies have strategies in place to protect their business, family and employees from the unexpected.
“A business succession plan is personally catered to you and your individual business and is designed to protect the assets of the business, should you or one of your co-workers depart due to an involuntary event,” said Mr Pilcher.
“Imagine you or your business partner is suddenly diagnosed with an illness and are therefore unable to perform their duties in the workplace. Would your business fail? Unfortunately, many business owners don’t consider this kind of scenario until it’s too late.
“This way, AXA Financial Planning Gold Coast are better preparing businesses to ensure they don’t fold, should a situation like this occur.”
Succession planning includes the establishment of buy/sell agreements and shareholder agreements to ensure business assets are assigned to the appropriate beneficiaries. The process also addresses funding arrangements for purchase of the departing partner’s holding, should one party need to withdraw from the partnership unexpectedly.
Mr Pilcher said the service aims to help business owners explore the pros and cons of business succession risk planning, including identifying the biggest risks to your business, how to create a succession plan and how to protect your business from key personal risks.
He said a good business succession plan provides a greater level of certainty and protects assets and livelihoods when involuntary recession occurs. This can be the result of sickness, accident or death.
“People think it will never happen to them, but if it does, what happens to the individual, their families and other business partners and their families?” said Mr Pilcher.
“Most business owners are aware that it’s not just their clients who depend on them, it’s their staff and families too. A business succession plan is one of the most important asset protections for your business and it’s something all business owners should consider putting in place.”
Richard Dawson, partner of the Gold Coast’s O’Keefe Mahoney Bennett Solicitors, agreed on the importance of having a succession plan, and in particular, urged businesses to make sure insurance policies are in place to protect the business and remaining partners.
“The importance of proactive business succession planning is fundamental to ensure that on the death or permanent disablement of a key person in the business, the right assets transfer to the right people at the right time,” said Mr Dawson.
“There are many ways which this can occur, but the most cost-effective means of achieving this is through the purchase of key person insurance.
“The failure to take out business insurance could result in the business owner having to undergo costly refinancing if something were to happen to a partner in the business.
“Sometimes this involves mortgaging the family home, being bought out by business competitors, potential partnership disputes and in the worst case scenario – the winding up of the business itself.
“The latter options are likely to be avoided when appropriate proactive business succession planning involving key person insurance is implemented before an event triggers it.”
AXA Financial Planning Gold Coast are located on Level 8, Tower 1, Southport Central Building, 56 Scarborough Street, Southport. To arrange an appointment, or for further information regarding business succession planning, phone 07 5665 3200 or visit www.axafpgoldcoast.com.au
Don Pilcher and Adviser’s of AXA Financial Planning Gold Coast are authorised representatives of AXA Financial Planning Limited ABN 21 005 799 977 Australian Financial Services Licensee Licence Number 234663.
This editorial provides general information only. Before making any financial or investment decisions, we recommend you consult a financial planner to take into account your particular objectives, financial situation and individual needs. AXAFP and its Authorised Representatives do not accept any liability for any errors or omissions of information supplied in this editorial.