“I don’t need a financial plan. I just want to save tax”
We hear this all the time when we speak to people for the first time. It doesn’t matter whether you’re a business owner or employed and earning good money, the initial reason is the same. Often, you’ve been recommended to speak with us by your accountant, solicitor or your friend and you come in with that one thought in your head. Save tax.
It doesn’t surprise us. Nobody queues at the door demanding a financial plan. More likely, nobody even knows what a financial plan is. And how can we blame you? Financial planners haven’t been very good at demonstrating what it is. Partly because it’s a relatively new thing (the software providers have only been around for maybe 10 – 20 years). Partly because we hide behind the fact that our regulator has tight restrictions on what is seen as marketing and financial promotions. But mostly, it’s because what we try to help one client achieve, isn’t what anyone else would want.
What is Financial Planning?
Financial Planning, rather than a financial plan, is an activity. It is not a thing or a product. Yes, we will build a financial plan (aka a Cashflow Model) but it’s not much use just building it and walking away. It needs regular attention and updating. It needs action points. It needs tasks completed and things to aim for. Things happen which completely changes the direction, and it needs ripped up and started again. And that is life. The thing about financial planning is that it is literally a living thing and because of this it needs regular attention.
It probably doesn’t sound very exciting when I tell you we use software –
- to forecast how your finances could look for the rest of your life
- to help you see if you can afford the life you want
- to help you make decisions about your future
- to show you simulations of what might or could happen
If I told you, I’m going to work with you to help you decide what it is you want to do and then help you get there, it sounds a bit more exciting – if a bit vague.
We help you take stock of where you are now and how you stand. We work with you to identify and set some goals for the future. We set out a plan of things you can do to help you meet your goals. And then we keep track of how things are going. It’s starting to sound like a business plan, isn’t it?
Except it’s for your personal life. It’s for your family.
Business Owners are Unique
Most business owners have a fair idea of how much is in their business bank accounts at any time. They have a decent handle on monthly income and are tight on monthly expenditure. They have weekly goals, 1 month goals, quarterly goals, annual goals, 3-5 year goals, and quite often 10+ year goals. They look at these regularly and update them. They know almost exactly where they stand.
Imagine your personal or family finances are a second business. Quite often, we don’t know any of the above. And yet, the finances of the “family business” are either entirely or about 50% dependent on cashflow coming from the main business. And at some point, when you stop working, there will no longer be any cash coming from the main business. What then?
Your Personal Family Business
Business owners need to treat their personal family life like a second business. They need to know where they stand. The directors and shareholders (read husband, wife, partner etc) need to be on the same page, knowing what they are aiming for. They need sufficient cashflow to provide the lifestyle they want both now and in the future. And they need to know how much they need so that when, cash from the main business stops, they have enough to do the things they want to. Whether the doors are shut and the business closes, or if you sell and get a big payday, you need to know.
What if something happens and cashflow slows, or stops? What if expenses increase? What if there’s a sudden need for a large lump sum.
You need to make sure you can get as much value as possible moved from your main business to your personal family business. And you have so many more options because you are the decision maker. Someone who is employed doesn’t have this luxury. They are given their salary and benefits and need to work with what they get.
Introducing Your Financial Planner
All these things (and more) can be brought to life through financial planning. You maybe just don’t have the time or inclination to run both your main business and your personal family business as closely. So, what would you do if it was your main business? You’d bring someone in to help you do it.
And yes, you’ve guessed it, that’s where your financial planner comes in. We do all of this fun stuff. We pull it all together and then present it to you, giving you context to help you make the decisions which make most sense. We keep it under review, and we take care of the action points. We do all the hard stuff for you to make sure everything happens so both your main business and your personal family business can flourish.
If you’re intrigued and want to hear and see more, join us on Wednesday 21st September for our webinar, “My Business is my Pension.”
Call us your finance department, your CFO, your fixer, whatever you like, but the main thing is, you call us. It’s what we do best.
And yes, we’ll help you save tax too….
Remember, everyone’s situation is different, so please seek individual professional advice.