7 surprises to bring a thriving business undone

You wouldn’t be the first business owner to believe that running a business somehow negates your need for personal financial planning; and that the growing equity in your business equity is the only superannuation plan you need.

You think that because you own a business, your retirement is completely taken care of.  You assume that your business will provide everything.  There is nothing more for you to do!   On all counts, nothing could be further from the truth.

Running a business is no more than a choice you make in how you earn your income.  Some choose business income; some choose employer income.  Either way, those who take a deeper interest in planning their personal and family financial wellbeing will prosper in the long term.

Furthermore, as a business owner there is an extra layer of planning you should be thinking about.  That is, planning the future of your income-earning and capital-appreciating asset, and protecting the equity in business that you work so hard to build up.

There is no guarantee that your business equity will translate into the retirement lump sum you hope for.  There are just a few of the things that could go wrong and derail your dream:

  1. Adverse circumstances (e.g. litigation, legislative change, customer desertion, obsolescence) force you to sell at a bad time
  2. Your health fails you before you reach your ideal ‘sell out & retire’ scenario
  3. Your business partner dies prematurely and his / her spouse becomes your new unwelcome business partner
  4. You want your children to inherit your business but they are not interested
  5. You don’t structure your business correctly to take advantage of the small business rollover rules
  6. You don’t have a Will to control the bequeathing of  your personal assets or your business ownership and / or control
  7. You have no emergency fund and no liquidity available should something major go wrong

Personal planning and business planning aren’t just esoteric concepts.  They are processes that help you predict, protect, or take advantage of the expected and unexpected things that life throws up.

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Financial wellbeing – what is personal financial planning?

The point of personal financial planning is to work out a way of achieving the things that are most important to you in life.  So what is important to you?  The answer is different for everyone.

For some it could be the dream of winning an Olympic gold medal or taking an around the world holiday.  For others it could be a house in the suburbs and a good education for the children, or saving for retirement.

Regardless of the broad range of individual goals, the common thread to goal achievement is financial wellbeing.  That means having enough money to do the things you really want to do, staying healthy and not having to sacrifice the fun in your life.

That is a long way from making the bland statement, “I want to be a millionaire!”  Accumulating money just for the sake of it is simply being greedy.  If your focus is 100% on being rich, then you are likely to be sacrificing your health and missing the fun in life.

For example, (and this example happens often) if your partner leaves you for someone else while you were always working on accumulating riches, where’s the fun in that?

What is the point of being rich if you are in poor health and having no fun?  Is that really what you want your life to be about?

Many people dream of riches but most would happily settle for enough money to do the things they want to do now, and the means of generating enough money to finance the future they want as it arrives.

In the process, you may or may not become a millionaire, but does that really matter?  These days, you can own 3 residential properties and be a millionaire on paper, but it is a meaningless concept.  You won’t be the first or the last millionaire who is desperately unhappy or unhealthy.

Financial wellbeing equates to balance in your life.  It means having focus on money to finance your life, leading a healthy life, and having fun in your life.

If the three can be combined in the same activity, that’s great!  But most often, they can’t.  So there must be room for all; and getting to where that balance feels right for you is the point of personal financial planning.

If you are looking for information on the calm positive mindset requires for financial wellbeing, check out

Until next time!