There’s so much to think about working in small business. Keeping up with the competition, staff retention, working 24/7, chasing late payments and staying across of all the latest gadgets and tools is only the tip of the iceberg.
We know that you’re the most important asset for your small business. So, take sixty-seconds to think about what might happen if you were suddenly out of action for a long period of time because of a health issue or even something as simple as a broken leg. Would your business survive? Who could fill in even short-term to keep things going?
“You don’t build a business – you build people – and then people build the business.” – Steve Jobs
It’s important to have a back-up plan in place and this includes having someone you can rely on or turn to if you need help. Having a key staff member to help fill in when you need it means you’ll also be able to schedule in regular holidays and days off for important events such as your kids sports days, special birthdays and time with your partner.
Yes, it does mean letting go a little but if you don’t currently have someone you can turn to for help with your small business, then take steps towards making that happen as a priority. It will allow you the freedom to focus on the bigger picture so your business will benefit and to take important time out for your own personal life.
Is there something you can outsource cheaply or delegate to a colleague? Should you put a system in place or a company handbook including passwords, key contacts and how to run your small business day-today? Doing so means that if you are suddenly out of action then your small business will continue on a day-to-day basis and that means both customers and staff members will be protected.
“It’s not the tools you have faith in – tools are just tools – they work, or they don’t. It’s the people you have faith in.” Steve Jobs
Most Australian families and businesses are also grossly underinsured for Life cover, with the median level of household Life insurance at $260,000 and at least $700,000 actually required to meet typical expenses, according to research company Rice Warner.
If you have people counting on you, the reality is that you need Life insurance. Small business owners certainly fall into this category yet almost half of us don’t have adequate Life cover.
It paints a disturbing picture of business owners placing their families, business partners and employees at risk. A broken bone or a minor health incident could leave you unable to generate income for months.
It’s important to have a back-up plan in place
With no Life insurance in place, small businesses can unexpectedly close due to the pressures of ongoing expenses. This is particularly in the event of the owner passing away or not being able to return to work due to a major illness or disability.
“Great things in business are never done by one person. They’re done by a team of people.” – Steve Jobs
Even if you established the company with family assets and loans your family members may not be equipped to take over the business. They may also be unable to sell the company quickly to cover debt, or they may be forced to sell it at a huge discount. This could leave them without income or they may even lose their home if this was used to acquire a small business loan.
If you have business partners, your family may not be able to step into your role adequately or buy out your share. Your small business may also rely on key employees whose death or illness may lead to the closure of the company you worked so hard to build.
Watch this video to avoid the hidden costs of Life insurance
Research shows that confusion around the kind of Life insurance policies designed to protect both is why many small business owners are not adequately protected.
In each of these scenarios, comprehensive Life insurance would protect your family and business. These include:
Life insurance could help your family pay any business debt and cover living expenses after death, injury or major illness.
Income Protection insurance could pay up to 75 per cent of your work income for a set period due to illness or injury.
Business Expenses insurance could pay a regular benefit for a specific period to cover business costs if you (as a business owner) suffer an illness or injury and are unable to work.
If you own a small business, then it’s important to consider getting both Life insurance and Business Expenses insurance to protect your family and the future of your company.
If you’re in this category and suspect you could be under-insured, then consider taking a few minutes to review your existing cover to understand what is and isn’t covered. After all, if the unthinkable should happen, no-one wants to leave behind a financial mess or leave the families and the small business we have worked so hard to build in the lurch.
Most importantly, putting a system and back-up plan in place it will help you enjoy your exciting small business journey and have fun along the way.
Small Business First members save an average of 20% on Life insurance cover. *Plus receive your 1st month free if you apply before 31 August 2017.
Survey by wealth management research company Rice Warner and The Australian Small Business Market for Financial Services survey