Owning a business
Starting your own business brings with it mixed feelings – excitement at the prospect of fulfilling one of your key ambitions, mixed with an element of fear as to whether you can make it work.
At first, it can be a little overwhelming – so many things to do, and so many people vying for your time. Logistically, it may seem like there’s a legislative and taxation minefield that you suddenly need to negotiate.
- How will you continue to fund your superannuation now that there is no employer making contributions on your behalf?
- How will you fund the business set-up if you have a limited cash-flow?
- What sort of insurance will your business need?
- How will you maximise your earning and minimise your taxes?
Getting started on the road to financial security can be made a lot easier by consulting a financial adviser.
What happens to my business if I am out of action?
Many small businesses rely on you as the principal to generate income. A serious injury or illness can temporarily prevent the business from generating an income. You need to continue paying your bills and expenses if your business is to survive.But without adequate financial reserves or an income, paying ongoing expenses can be difficult, especially if you are already dealing with costs associated with illness or injury. And if family or friends are relying on your income, you can face further stresses.
How can I protect my business?
Many life insurance companies offer business expenses insurance, which can pay for the expenses that your business would continue to incur should you be ill or injured and unable to work.Where multiple parties are involved in a business, the issue of change of ownership can arise as the result of death, permanent disablement, major trauma, injury or sickness to one of the parties.
Financial support is often needed with the loss of key personnel. One of the best ways to help cope with business disruption is to have a clear business succession plan in place.
How can I use debt to my advantage?
In order to facilitate expansion and growth, many businesses enter into credit arrangements that entail financial and legal obligations.If the performance of the business is adversely affected by the death or disablement of a key partner or owner, debts can put the remaining partners, and any guarantors, in a difficult financial position. This can be exacerbated if they do not have the financial resources to meet these obligations.
One simple way to protect members of your business, including guarantors, from the risk of a business principal dying or becoming disabled, is through insurance. The type of plan you implement will depend on your business, its debts and other factors.
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As at 30th March 2011, AXA Asia Pacific Holdings Limited and all of its Australian and New Zealand subsidiaries ceased to be members of the Global AXA Group and became members of the AMP Group.
