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Financial Advices
Finance the art of managing the monetary resources of an organization, country or business as money is necessary to do something.
These factors can assist your financial affairs:
· Choose the right finance when starting up
· Get the right finance and assess your finance readiness
· Use your business plan to get funding
· Decide whether to lease or buy assets
· Borrow money tax efficiently
· Assess the health of your business
· Borrow money for capital investment from pension schemes
· Claim loan interest against tax
· Financing from friends and family
· Commercial mortgages and lenders
· Floating on a stock market: your options
· Recover your debts
· Avoid insolvency
for details you can consider these points
Insurance
(i) Get the right insurance for your business
There are many different types of business insurance available - but which ones do you need to have, which should you have, and which don’t you need at all?
There is also a tool that will help you to answer these questions and assess what types of insurance you need. It will help you decide what cover you must have, and what cover it is advisable to have.
It will eliminate insurance types that do not apply to your business circumstances.
You will answer a maximum of 20 questions. It should take around five minutes to complete.
Important:
* What insurance does my business need?
(ii) Insure your business and assets - general insurances
Insurance can protect your business against damage to, or the loss of, physical assets. The cost of insurance depends on both the insurer's assessment of the likelihood of damage and the size of any payment they may have to pay in the event of a claim.
The set of highlights described below provides information on the different types of general and commercial insurances available and how to assess what types of insurance you need.
* Insuring the business premises
* Contents insurance
* Specialist insurance
* Motor insurance
* Business insurance if you work from home
* Getting the right insurance cover
* Making an insurance claim
* Reducing the risk
(iii) Insure your business - people, life and health
If you or your employees suffer an injury, illness or death, there could be serious financial consequences for you, your business or your employees.
Insurance can either provide protection for the business itself, eg to make up any shortfall in profits should the business lose a key employee, or it can be an important benefit for employees, thereby helping you recruit and retain the right people.
The set of highlights described below provides an overview of the different types of insurance and the ways in which different policies can benefit your business. If you are thinking about buying some insurance protection, it is always a good idea to get expert help from an independent financial adviser.
* Identifying risks and insuring against them
* Basic types of life and health insurance
* Protecting the business - loss of a key person
* Protecting the business - loss of a partner or key shareholder
* Insurance protection for the owner-manager or the self-employed
* Insurance as an employee benefit
(iv) Liability insurance
As a business owner or employer, you have a legal responsibility towards your employees, customers and the public. You could be held legally liable and risk being sued if an employee or a member of the public is injured as a result of your negligence or breach of duty. If their personal injury compensation claim is successful, you may also face a claim from the NHS for the costs of hospital treatment (including ambulance costs).
Liability insurance is designed to pay any compensation and legal costs that occur if an employer is found to be at fault. If you employ anyone it is most likely that you will need to have employers' liability compulsory insurance (ELCI).
ELCI requires employers carrying out business in the UK to insure their liability to their employees for bodily injury or disease sustained in the course of their employment in the UK. It provides greater security to firms against costs which could otherwise result in financial difficulty, and to employees that resources will be available for compensation even where firms have become insolvent.
The set of highlights described below explains what cover each type of liability insurance offers and how liability insurance is sold and priced.
* How liability insurance works
* Employers' liability compulsory insurance
* Public liability insurance
* Product liability insurance
* Pollution risk insurance
* Property owners' liability insurance
* Professional indemnity insurance
* Directors' and officers' liability
* Seek specialist advice
(v) Choose an insurance adviser and present your risk
As a business owner and/or employer you will probably use two types of insurance adviser.
General and commercial risk insurances are dealt with by an insurance broker. You will need to identify the type of insurance you need so that you can find a suitable broker for your business.
Life assurance, protection and health insurance are dealt with by independent financial advisers (IFAs). Insurance brokers and IFAs act as intermediaries between you and an insurance company.
The set of highlights described below explains the issues involved in choosing both types of adviser and how to present your risk details.
* Who to consult and how insurance works
* Minimize your risks - and your insurance premium
* Presenting your risk details
* Where to get advice on choosing a broker
* Where to get advice on choosing an independent financial adviser
* Manage the relationship with your insurance adviser
* Where to go if you have problems with your broker or insurer
Retirement planning
(i) Pension planning for the self-employed
A pension gives you a retirement income, paid for by investments built up during your working life. The State Pension is funded by your National Insurance contributions but only provides a basic income. You may need an additional pension to retire comfortably.
If you are self-employed, you will not qualify for the additional State Pension, also known as the State Second Pension, formerly SERPS. However, you can take out a private pension such as a personal pension or a stakeholder pension. The amount you get at retirement depends upon how much money has been paid in, how well it has been invested and the age at which you retire.
It is important that you consider all your options before making a decision. The set of highlights described below helps explain how pensions work and what you need to do to find one that suits your needs.
* Assessing your pension needs
* How a personal pension works
* When to cash in your personal pension
* The basic State Pension
* Stakeholder pension
* Other pension products
* Other tax-efficient savings - ISAs
* Transferring your pension
* Keeping track of your pension
(ii) Consider your exit strategy when starting up
When you're setting up your business it's essential to think about how you'll ultimately end your involvement with it.
A well thought-out exit strategy can help you to maximize the value you get from your business, successfully market your business to potential buyers or investors and ensure you end your involvement with as little disruption to the business as possible.
Regardless of whether your exit occurs to a planned schedule or you are forced to make a move for unexpected reasons, the decisions you make when setting up can affect how easy it is for you to eventually exit your business.
The set of highlights described below provides an overview of how some decisions can affect your ability to exit the business successfully, and shows you how to prepare and manage your business to maximize its value. It also covers the different exit options available and outlines their advantages and disadvantages.
* Why you need an exit strategy
* What do you want from your business?
* Decisions that could affect your eventual exit
* Exit option: family succession
* Exit option: selling your business
* Exit option: float your business
* Exit option: close your business
* The exit process
Expert financial advice
(i) Get help and advice about your debt problems
Many businesses run into financial difficulties. The good news is that however big or small the problem, there is plenty of good advice to be found. Whether you are having trouble paying suppliers, or you have received a County Court claim, there is an organization that can help you.
Government agencies, solicitors, accountants and debt counselors are all able to offer valuable advice on dealing with debt.
The set of highlights described below points you in the right direction to find the financial advice you need.
* Preparing to seek help
* Debt advisory bodies
* Debt advice from accountants or solicitors
* Debt advice from your bank
* Debt counselors
* Winding up, bankruptcy, receivership and administration
* Individual voluntary arrangement
* Negotiating debt restructure
(ii) Choose and manage an accountant
Accountants can offer your business a range of services from basic bookkeeping to specialist business advice. They can save you time and help to make your business more profitable.
You may employ one simply to prepare financial statements for your end-of-year tax return or you may need to rely on them for other added-value services, such as auditing. By law, accounts must be audited each year unless the company is exempt, eg where annual turnover is not more than £5.6 million.
The set of highlights described below will help you understand what your business accounting needs are and how an accountant can help you with them. It will explain how to find an accountant that is right for your business and it offers advice on how to get the most from one.
* How an accountant can help
* Where to find an accountant
* How to choose the right accountant
* Checklist: ten things to ask your prospective accountant
* Managing the relationship with your accountant
* End the relationship with your accountant
* Here's how I used an accountant to help me in my business |