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Owners invest heavily in the early stages of setting up a company, so it’s only natural that they should want to reap the rewards when times are good – and match their lifestyle to their earnings. Yet, unless careful family financial planning is in place, they could get into difficulties if their venture hits a future bump in the road.

Even for lifestyle businesses, robust financial management planning principles still apply.

Without long-term strategic thinking and business/ family financial planning, there is a risk that the owner will work too hard for too little reward – or may reward themselves too much to the detriment of ongoing investment in the business.

Indeed, Haines Watts’ latest research shows that 44% of owners say they would find it difficult to reduce the income they draw from the business due to financial commitments; and 30% of owners have put off financial investments in their business because of their need to draw a personal income.

That’s why a business plan should include a long-term forecast for future business investment requirements. It should be tied into a budget for your own annual income, as this will help you to identify where gaps may appear.

It’s crucial for owners to consider the future investment needs of the business and how they correspond with the reliability of their own personal income stream.

This will help owners plan and prioritise for their business. Owners already feel immense pressure to work all hours and earn well to support their family. In fact, recent Haines Watts research has shown that 67% of business owners’ families are dependent on income from the business. So, both business and family financial planning should be done at the same time to understand how one impacts the other..

By thinking strategically about their own financial arrangements too – diversifying and strengthening through contributions to a personal pension, for instance – the owner can reduce the stress they feel about providing for their family and retain and protect their wealth.

This is vital for any owner striving to secure the future of both their family and their business.

Haines Watts help and advice on business and family financial planning

For more advice and support on the topic of business and family financial planning contact your local Haines Watts office, to secure the future for your business and family today.

Read on
Wealth planning & protection

Looking after your personal wealth is as important as looking after your business finances. We have a close relationship with the regulated financial advisors at Tilney to help you to protect and maximise your personal wealth.

Benchmark your wealth & financial risks

How does your personal wealth compare to others? What financial pressures are business owners under? Are you taking too many risks? Is your financial future in jeopardy?

Our related content

For other resources around the topic of financial planning click here.

Find and contact your local Haines Watts office

About the author

Karen McLellan

Karen specialises in providing business consultancy, tax mitigation and accountancy services to owner-managed businesses. As a business owner herself, Karen understands the challenges of building and running a business.

She provides strategic advice to clients which has a positive impact on the growth and value of their business, and which helps the individual achieve their personal goals. Whether its advice on restructuring, tax mitigation, succession planning or preparing for sale, Karen can help the client get to where they want to be.

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