So you have your own business, things are going well, your clients receive a value service and overall, everything and everyone is happy. It's a lovely position to be in, and long may that continue. But this business is the life blood of your family, it pays the bills, the mortgage, the cars, the lifestyle, until....

Individuals and businesses are not invincible. Unfortunately something bad may happen at some point during our working lives and as a business owner or someone considered 'key' to the profits and growth of the business, there are a few things to consider and ultimately be prepared for.

Consider this, you own your business and are a 50/50 shareholder with your partner in crime, and you both have the enjoyment of loving families outside of work. A perfect scenario, until…, accident strikes and one of business partners are no longer with us. 

The surviving business partner has lost a valuable partner who was ultimately responsible for 50% of the business. The surviving family has lost a husband, father and bread-winner, and they now have a 50% share in a business they know nothing about. What happens in many situations is that the business ceases trading, simple as that. The family with a 50% share of a worthless business, the business partner with no choice but to start from scratch.

Shareholder Protection policy would have created a very different outcome for everyone.

  • The surviving business partner would have received capital to purchase the shares from the surviving family, meaning that they would be able to continue running the business and retain 100% of the profits, keeping the business moving forward.
  • The surviving family would have been able to sell the shares, receiving the lump sum value as cash which would provide them with financial security as they adapt to their new lifestyle.

Forward planning means that both business and family interests are protected.

Consider the situation then where the business has lost its top sales person, and with it 60% of their profits.... where do they find that sort of cash? Do they layoff some of the staff in order to recover some of the lost profit? How do they find a replacement and how long before they are up to scratch, 1-2 years, maybe more?

Key Person Protection policy could have solved the problem, for the business.

Having already realised and calculated the risk of losing this young lady, and by taking out the appropriate policy, the business would have been protected against such a scenario. The business would have received a capital lump sum to cover:

  • The loss of profits for the next year or so
  • The replacement and recruitment costs to bring on a new sales person and conduct the relevant training
  • Any associated business liabilities 

Forward planning means that the business is protected.

There is a distinct lack of awareness around business protection, hence me sharing some thoughts with you now.

Protect the future of your business.

Steve Thomson

Business Development Manager

Health & Protection

t: 01438 730 283

m: 07884 664 312