Business owners across Perth and Australia-wide often have a healthy appetite for risk, which can ultimately pay off personally and professionally. When running a business however, it’s important to be strategic about the risks taken and minimise where possible for the good of your family and loved ones. Below are some key risk protection areas worth looking at, which are often considerations we take into account when formulating financial advice.
The right structure
Make sure your business is legally structured in a way that protects your personal assets – you want a clear delineation between business and personal assets wherever possible. Setting up the right entities, often companies and family trusts, can help shield your personal assets and finances from any legal actions taken against your business over your business journey.
You should also ensure that your personal assets, and importantly your family home, is purchased or owned by whom ever in your relationship carries the least risk. This is often the partner who isn’t involved in business dealings or key responsibilities, or perhaps a separate entity altogether.
Have a safety net
It’s important to have a safety net. Make sure you have an emergency fund set aside to cover personal expenses in case your business hits a rough patch.
Consider life and business insurance
Stay informed and educated about the risks involved in your industry and take steps to mitigate those risks as much as possible. Having the right insurances in place to protect yourself and your business from any unforeseen events is paramount. This ranges from general insurances to protect against disaster striking, personal life insurances and buy/sell insurance if you have other business partners involved.
Utilise superannuation as a wealth store
Your superannuation is generally protected from creditors, even if you were to face bankruptcy. This in addition to the potential for tax savings over the years you operate in business are a few reasons why you should consider contributing some of your hard-earned income to superannuation.
Seek formal advice
All of the above areas are intertwined and form just one part of your larger families’ wealth management and risk mitigation needs. Please reach out to the Boutique Advisers team for a tailored conversation with one of our trusted professionals.
Sean Hocking works with successful individuals and families across Perth and Australia-wide to provide peace of mind and clarity around their financial future. Having a roadmap in place, which clearly articulates what’s important to them in the years to follow, gives his clients the confidence to make clear and informed decisions throughout their financial life journey.