Four steps to better business
Justin Corliss, Employee Benefits Consultant at AGL Corporate Services, discusses the importance of corporate advice for SMEs.
Whether you run a small, medium or large enterprise, you should consider the implications for you in some key areas.
Providing effective benefits for your employees and protecting your business in event of loss of key staff can be crucial to the smooth running of a business. The loss of a key person can place a great deal of strain on the company and have serious implications for the finances. Good advisers alleviate these problems by establishing a clear strategy agreeing what would happen in the event of death of one of the business owners. Properly structured, these agreements can protect all parties and provide peace of mind.
Hopefully, this will not be the case in your firm and all directors will continue to work right up to their chosen retirement date, creating the need for a succession plan. Whether the business is to be passed on to family members or if the ultimate goal is sale to an unrelated party, there is a significant need for business planning to make this exchange as smooth as possible. In the instance of sale to an unrelated party, obtaining the best purchase price is generally paramount, but what should this figure be?
Selling a business
Preparing a business for sale is important but it's not all about marking time until the exit date. It is vital to ensure three key areas are as comprehensively covered as possible. These are: maximising return on surplus funds; minimising cost of borrowing of any description and structuring both business and personal tax positions as efficiently as possible. Assessing available terms for investment and risk appetite for surplus funds is the starting point but whatever these are, there is invariably a better solution than leaving them in your business bank account. If you review two things, they should be your commercial banking process and how you structure your debt.
One very common complaint from successful business owners is their inability to extract profits from the business without incurring hefty tax bills. Tax mitigation for all employees but specifically directors and senior staff is an area where common sense and business acumen will not get you by. You need a specialist, you need to know if they're good, and you need to know the sort of solutions you should be expecting to be presented with. It is the one area of business in which even those running the most successful businesses often have a knowledge gap.
Auto enrolment began for the largest companies in 2012 but is really gaining pace for the SME market in 2015 and is a compulsory cost which employers have to bear. But even here there is potential to turn this to your business advantage by utilising salary exchange and passing these savings onto your workforce via an employee benefits package. An employee benefits package does not have to involve parting with thousands of pounds for an online benefits portal and may be as simple as introducing group life cover, childcare vouchers, private medical cover and gym memberships
AGL Corporate Services is working with ICAS to provide access to exclusive advice especially for ICAS members. If you want to find out more simply view the AGL offer on the ICAS Website.