Do you own a SME business? Then it’s time to think like a corporation. After all, you’re not working all those hours for the fun of it (well, you are partly) but, in all likelihood, to provide for your children and grandchildren.
At Haines Watts, we work with a lot of SMEs. And we understand that we’re not acting for the business, but for business owners like you – both today’s and tomorrow’s. We know it’s all about the story behind the numbers.
What do I mean? Let me give you an example of why thinking strategically about your business’s structure is important.
One of my clients is a family-run company which buys parts and sells them on. When they first came to me, the business was strong, cash-rich and the owners simply paid themselves a wage every year.
But keeping a lot of cash in a business is never a great idea (that’s a whole other blog in itself) and their circumstances, and so their aspirations, were changing.
Get the family together
So, I called everyone together for a strategy meeting so I could learn more. I discovered that their own children had reached their forties and, now with families of their own, had returned to the fold and had taken key roles in the business.
The company was doing well, so rather than keep the money as cash, we arranged for shares to be gifted to this next generation. We also set up a family investment company so shares could be put in trust for the grandchildren too.
The owners were struggling to find an affordable new premises to expand their operation to the north of England. I advised them to purchase a property and set up a new, ring-fenced company to which it could be leased.
And rather than try to hire the talented new sales person they had in their sights as an employee, they have now offered to make them a new shareholder – a much more attractive proposition.
More than numbers
A business is about much more than a set of accounts. It’s all about the story behind the numbers.
The story which emerged from this family’s strategy meeting was that the current owners are keen to grow the venture today and bring in new talent, but they also want to pass wealth down the generations.
So, with a clear, strategic view of the challenges a company faces today, and where it is going tomorrow, we can help an owner to interpret the numbers, look at the wider trends and structure their business to make the most of opportunities on the horizon – so they and their successors benefit long into the future.
Want an accountant that helps you use your management information to plan strategically? Get in touch.