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How to get financially well organised

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Most people working in small business are not financially well organised and this isn’t surprising, because everyone is so busy actually running their business!

However, there are nine key areas to cover to help work out how financially well organised you are. To achieve your life and small business goals you must get organised but remember you need to be the one to take action.

First you need to identify your current financial situation. Get clear on the numbers then dream where you’d like to be. You need to be financially well organised to get to your future destination which involves asking the below questions:

1. Business Performance and Valuation

  • Is your business meeting its revenue, profit and cashflow goals?
  • Has your business value been increasing year on year?
  • Are you drawing a wage and dividend that exceeds your expectations?
  • Is the time you spend working in and on the business, a number you are happy with?

2. Tax Minimisation

  • Are you sufficiently well prepared to minimise your likely future tax position well in advance of the financial year end?
  • How confident are you that you would come through a tax enquiry without any problems being identified?

3. Asset Protection

  • Is your current legal entity (i.e. sole owner, partnership, company, trust) the most advantageous for your business?
  • Has your business entity been established in such a way to maximise your asset protection?

4. Estate Planning

  • Do you have a current will in place that was prepared by a lawyer?
  • Are your powers of attorney in effect in the event of an unplanned event taking place?
  • Do you have legally enforceable binding death benefit nominations?
  • Have you thoroughly considered how you estate will be shared with your beneficiaries and taken into account matters such as estate equalisation to reduce any challenges to your will?

5. Retirement Planing and Superannuation

  • Have you determined the income levels you will require in retirement?
  • Do you have a plan in place to build sufficient retirement assets by the time you wish to retire?
  • How confident are you that you will reach your retirement goals?

6. Business Succession/Exit

  • Do you have a documented succession or exit plan in place?
  • Are you aware that it can take many years for a business to become investor ready and maximise your exit price?

7. Personal Finances and Investments

  • Are your personal wealth creation activities generating the returns you wish?
  • Is your property portfolio bringing the capital growth you need to hit your goals?

8. Personal Insurances

  • Are you confident that your family will more than adequately be catered for in the unplanned event that something happen to you?

9. Personal Debts

  • Do you have any excessive non-deductible debts that are draining your personal cashflow?
  • How confident are you that you are paying the lowest levels of interest on your debts?
  • When was the last time you had your debts reviewed and consolidated?

If you are unsure or don’t understand any of the above queries you should discuss them with your accountant or advisor. Some are more relevant for certain stages of your life but all play a part in your financial journey and should be road-mapped and discussed on a regular basis.

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Related articles from finance expert Brad Turville:
1. Should I pay myself a salary?
2. Chasing debts: what are my options?
3. What wage should I take from my business?

Is your business financially unwell?

Brad Turville
Brad Turville is a Virtual CFO at BJT Financial, specialising in tax and business improvement. As a third generation accountant, he knows that business owners want their accountant to play a more proactive role in the strategy and growth of their business so they can focus on doing what they love.

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