Risk Management and Succession
You are in business for a variety of reasons but first and foremost to make a profit. Without profit there is no reason to continue and no opportunity to invest, adapt and grow the business. As a business owner/manager there are numerous risks threatening your business prosperity. You have to manage those risks in one way or another. Too often the decision is to ignore the risk and hope for the best !
Some of the ‘headaches’ that take you away from doing what you are best at and which are so often neglected are :
Managing staff :
neglect to set in place procedures, documentation and staff handbooks can lead to chastening experiences, and heavy bills, if a case is taken to the Employment Tribunal. Have you invested in robust HR practices?
Health & Safety :
failures in compliance with H&S requirements can lead to heavy penalties not only for the business but also for the owners / directors. Have you undertaken an H&S ‘audit’ ?
Regulatory requirements :
again, failure to comply can lead to severe consequences. Have you developed a culture of compliance within your organisation?
Data protection : how do you manage and secure your data?
Intellectual Property :
have you considered what trademarks, copyrights, designs, patents you use? Do you own them and have you secured them? Or could you be infringing the IP rights of someone else with the risk of potentially devastating action being taken against you?
Financial management and Tax strategy :
How much time do you give to understanding what your business accounts are telling you? How do they help your forward planning? Have you made plans to control the tax liability? Are you covered for the expense you would incur if your business were subject to an HMRC investigation?
Disaster recovery :
Have you identified the major financial risks to your business? Most of us tend to insure premises and equipment. But do you have adequate business interruption protection and have you insured against the loss of key personnel ?
Business Structure :
When did you last review your shareholder / partnership agreement? Or consider whether you are using the best trading structure for your business ?
So what could you achieve if these risks could be reduced to manageable expenses which could be comfortably included in the budget for your business? Speak to us at SWLaw to arrange an audit of processes, a retainer for professional services plus insurance for when it all goes wrong!
Ultimately, you will probably want to plan an exit route. That may be by succession within your family, it may be by succession from within the business – perhaps a management buy out, or it may be by selling the business. Your financial security in retirement may depend substantially on getting this right: succession needs to be planned over a number of years during which attention needs to be given (eg) to the trading accounts, business valuation, presenting the business as an attractive proposition to the market, staff succession, taxation and setting aside separate funds for your retirement.
Speak to us at SWLaw and plan your exit strategy early !