Making savings in your business can be done by reducing the costs of your current expenses, and let’s face it, one of these can be insurance. By shopping around and making sure you have the right cover for what you need, you can make massive savings on this necessary business expense.
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I have a client who owns a beauty salon, and who’s husband is a builder – self employed (Let’s call them John and Mary). Until Mary met me, she didn’t have any insurances, but now everything is in place. She feels really confident that if she accidentally hurt herself she would get her income protection to cover her personal and business costs. This means that there won’t be a downturn in her finances if she couldn’t work.
For the last 6 months, she has been trying to convince her husband to do the same. But he has a different view on things. He is a young, fit, 30 year old.. what could possibly go wrong??
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This is a terrible story. This is a story of two mechanics who went into business together (Let’s say their names are Joe and Andrew). They owned the business 50/50. Neither of them had a lot in superannuation and most savings went straight into starting up the business. A few years into the business, Andrew died quite tragically. The business was not in a financial position to pay any money to Andrew’s family, but technically the family (via the Will), now own 50% of the garage. Andrew’s wife has never worked in a garage before, nor does she really want to work in a garage. Unfortunately Andrew’s wife has no choice but to work there, and Joe has no choice but to let her work there because he can’t pay her out.
There are insurance policies which could solve this issue and provide you with a level of peace of mind and control. In a nutshell, if the business had adequate insurance in place, Andrew’s family would have been the beneficiary of the insurance policy and Joe would have retained 100% of the business… It would have been a clean cut, and would have left both parties with choices.
The information provided in this article is of a general nature only. It has been prepared without taking into account your objectives, financial situation or needs. Before acting on this information you should consider its appropriateness having regard to your own objectives, financial situation and needs.
