In Scotland, we have a proud history of family businesses and to this day, Scotland is still dominated by family-run SMEs.
To give some context on how business owners contribute to our economy - SMEs accounted for 99.3% of all private sector businesses in 2018, and an estimated 69% of SMEs are family owned.
While this is something that we should be rightly proud of and celebrate as a country, many of these businesses are inherently vulnerable and lacking essential business protection.
But what do we mean by this?
At Murphy Wealth, we’ve found that due to the nature of family businesses, there is an element of trust that makes standard business protection processes and practices seem futile and often disregarded until it’s too late. Disaster strikes and it often leaves the business and those within it vulnerable and unstable.
Although the discussions you’ll have to have about Business Protection may not be comfortable or pleasant, they are necessary. Business Protection isn’t just for the business and isn’t just about money. Putting Business Protection in place means you can protect each other, your family, the business and your employees. It enables your company to thrive and the people within it to feel secure.
If your business isn’t protected, ask yourself, if there was a disaster tomorrow, would the business survive it? If somebody passed away, if somebody became unwell and couldn’t work, or if a relationship broke down, would the business be protected? Could the business move forward with a key component missing?
In 2018, Legal and General reported that 53% of businesses think they would cease trading in under a year after the death/ critical illness of a key person. Many would struggle to find a replacement and fund the cost of replacing and getting their business back up and running.
It’s hard to face the fact that we should prepare for the worst, because after all, who wants to think of ‘the worst’?
The other thing many of us hide away from talking about it is the debt that your company holds. Should a business owner face death, illness or a personal crisis, the debt that was taken out against the company must be protected in their absence. This essentially means that if the debt isn’t paid off, it can be a main catalyst for business downfall and difficulty.
The above report also showed that 65% of businesses have some form of business debt. And this has been increasing year on year. Business debt has increased 14% since 2013 and 33% since 2011, yet a large proportion of businesses do not have cover in place to repay debt.
Ask yourself: how amenable is your debt and what steps have you taken to protect it?
The formalities can seem daunting initially but once you’ve taken the steps necessary, you can rest safe in the knowledge that you, your family and your business are protected.
Many people think that arranging business protection is a cumbersome and complex process. However, it is can be set up in way similar to other type of protections. At Murphy Wealth, we can help to mitigate any concerns you have and help you to protect your business. We’ll help you with what you need to make those decisions and formalise your Business Protection for you.
Contact us today to find out how we can help you and your business.
[Webinar] In conversation with Justin King: Your life plan and why it matters now
You may have heard us talking about Life Planning recently. We want to make sure that you get the opportunity to understand why Life Planning could be a game-changer for you to achieve your goals and be truly fulfilled. Join our webinar with CEO Adrian Murphy and Financial Planner Justin King to find out more.Read more