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Who will run your small business once you retire, become critically ill or disabled or pass away? This is an important question to answer for a small business owner to ensure you plan for the continuity of the business.
For many small business owners, running a small business is a labour of love, filled with dedication, hard work and countless challenges. According to a 2019 study by the Small Business Institute, only around 30% of small businesses in South Africa survive beyond their first year.
The success of any business requires some skill, a bit of luck and a lot of dedication and hard work and therefore, if a small business does ‘make it’, it is worth looking after, says Sharon Hamman, senior legal adviser at Momentum.
“As the saying goes, the difficult part is not making the money but rather keeping it and the same rings true for small businesses.”
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According to a survey conducted by the Small Business Institute in South Africa in 2018, only 33% of small businesses have a formal business continuity plan in place and 41% of small business owners do not have a clear idea of who will take over their business one day.
Hamman says a business continuity plan is the key to ensuring your business can continue to thrive if anything happens to you. “Just as each individual should have a personal financial plan and a will to protect them and their loved ones against major life events and its associated financial risks, so too is it necessary for a business.”
As a business owner, it should be high up on your to-do list to consult with your financial adviser to get this plan in place. “Continuity planning is not only a business strategy, but also a responsibility to the legacy you leave behind. While it is not complicated, there is a lot to keep track of and put in place.”
Hamman says a business continuity plan sounds simple enough to make sure that the business continues, but the devil is definitely in the detail. Business continuity is the core of any business continuity plan and it entails many facets. It is concerned with the future existence of the business during your lifetime and beyond and entails:
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“As a small business owner, your vision and dedication drive the success of your venture. Protecting your business against life-related risks is a responsibility that should not be overlooked. It is good for you, your family and your employees and therefore good for your business.”
She says with the plethora of options floating around the market it is vital that small business owners seek professional advice from a financial adviser to guide them through the planning process. A financial adviser with the necessary business planning expertise can help assess the risks and opportunities and recommend the most appropriate financial products to make sure those risks, needs and goals are addressed.
“Engage with your financial adviser as part of taking proactive steps to secure your business’ future. With a solid plan in place, you can leave a lasting legacy and empower your business on its journey to success.”
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