Britain is a nation of small businesses. SME’s play a vital role supporting millions of jobs and stimulating future growth. However, many of them are not protecting their future when it comes to guarding against critical events.
Why do SMEs need to consider protection?
Planning ahead is vital when growing a successful and sustainable business.
Death or critical illness of a key person
Whilst there are many challenges that SMEs face in their operation, the death of a key person is one such event that can have a truly catastrophic impact on a business. One in ten owners said their business would cease to trade if they or a fellow owner died, according to Legal & General State of the Nation report, whilst 40% of businesses would have to end their operations within a year if a key person were to die or become critically ill.
Bricks and mortar can be rebuilt and computers fixed, finding a replacement for an essential part of your team can be a real challenge. Therefore, by not protecting your greatest asset, the human capital of your business, you could be risking the future of your business.
Protection is available
Many business owners are not aware of the risks they can avoid by having a financial plan to help buy shares and repay loans in the event of another owner’s death. Shares and loan balances tied up in probate can be very damaging for a small business. It is essential that business owners agree on a plan at the earliest opportunity and protect the company’s shares in circumstances of a critical event.
Magma has a wealth of experience in helping clients protect their businesses against such circumstances. If you would like to discuss this further, please speak to Will Lodder (Partner).