Between 2000 and 2020 we have seen an increase of 72% in the number of private sector businesses in the United Kingdom, this shows the large entrepreneurial spirit of our country.
With 6.0 million small and medium-sized enterprises in the UK in 2020 it is essential to ask, do you have the appropriate business protection in place should something go wrong?
It is estimated that 79% of UK small businesses do not have sufficient protection in place to mitigate the impact of losing a key individual.
But what do we mean by business protection?
Business protection is an insurance policy, much like your car insurance, but rather than protecting your car, it protects your business. Employers’ liability insurance is most like motor insurance, in that it is legally compulsory unless the business is a family business which is not incorporated as a limited company or if the company’s only employee is the owner (with at least 50% of the shares).
This type of insurance only mitigates financial loss if an employee is injured during their employment.
Many businesses will overlook other risk factors such as the death or illness of a shareholder, director, or another key person. When the unthinkable happens, it can lead to disruption to your business, but by having the correct continuity plan and protection in place you can mitigate against these risks.
Over the next few weeks, we will be taking an in-depth investigation of what is there to protect your business.
But for now, ask yourself these questions:
• Who are the key personnel within your business?
• What would happen if a director/shareholder or key employee of the firm passed away or was absent for an extended period due to illness?
• Do you have a Business Will?
• What continuity plans do you have in place?
• Will the bank call in any loans?
• Would you have to sell a property to pay or cover the charge?
• Would your working capital be used up?
• Have you considered that confidence in the company may drop?
• Would cost-cutting exercises need to be implemented?
• Are there key contracts that could be affected?
• Will the value of the business be affected?
• Would other shareholders be concerned?
• Could employee retention be affected?
Getting the right business protection in place can be easy with the right specialist. At Scott Fyffe Wealth Management we have a team waiting, ready to help you, and your business succeed.
No individual protection advice is given, not intended to be given, in this blog.
Scott Fyffe Wealth Management Ltd is an Appointed Representative of Lyncombe Consultants Ltd which is Authorised and Regulated by the Financial Conduct Authority No 618025.
Scott Fyffe Wealth Management Ltd is registered as a company in Scotland SC669958. Registered Office Unit 9C City Quay, Camperdown Street, Dundee, DD13JA, Scotland, UK.