Business protection doesn’t need to be complicated. With 5.9 million businesses in the UK – each with their own specific financial needs – you could be missing out on a great opportunity to grow yours.
According to the Office for National Statistics (ONS), there were 2.72 million value added tax (VAT) and/or Pay As You Earn (PAYE) registered businesses in the UK in March 2019.
Seventy-three per cent of these are limited companies, with 46 per cent of them single employee limited companies – highlighting that there’s a significant number of businesses whose financial viability relies on just one person.
While business continuity and succession planning may not be high on the priority list of many businesses, losing a key employee could have a devastating financial impact on them.
So it’s important that businesses consider and plan for the unexpected.
From a business continuity perspective, would they be able to continue if one of the business owners were to die or become critically ill?
And while business succession planning is a key part in protecting the stability and continuity of a business, frequently little or no consideration is given to this.
Business protection can help make sure your clients can continue trading.
It also allows the owners to maintain control, while making sure their dependants receive a fair value for their share of the business when they die. Put simply, it provides a financial safety net for their business if something goes wrong.
Every business will have certain key people who are vital to its success and prosperity – people whose sudden and unexpected absence would have a serious detrimental impact on the future profits of the business.
With business protection in place, if these key people become seriously ill or die, your clients will have funds available to keep their business trading; replace key individuals; provide employee benefits; protect corporate debt; buy out a shareholder, or their estate, if they become critically ill or die, and make sure their dependants receive a fair value for their share of the business.
It’s likely you’ll already have clients with business protection needs.
While they might be aware of the need to protect their business, they’ll need advice to identify the right solutions.
What’s more, the value of business protection is often higher than other types of protection, which means increased revenue for your business.
And if you’re not speaking to them about it, chances are someone else will. On the Aegon website our biztoolkit page offers more information on business protection.
Don’t lose out on genuine opportunities to develop valuable relationships, expand your business, and increase your profitability.
With many clients now more comfortable buying financial products online, the value for advisers, lies in areas such as business protection, where they can’t self-serve.