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In the article, OnPoint Advisory Gold Coast Accountants, will discuss the some current trends in de-risking your business.
Business owners are becoming increasingly aware of more business risks they are becoming exposed to. More than just financial issues.
Reliance On One Person
Many Small Businesses are totally reliant on one or a hand full of key people who are vital to the running and survival of the business.
But what would happen to the business if something was to occur to these key staff?
The unexpected can occur, like death, illness or they just decide to move onto new ventures.
Will your business survive.
The first thing a business needs is a strategy and contingency plan for these key roles.
Businesses should, as part of this, consider:
– Process Documentation;
– Shareholders agreements, which include buy / sell agreements, if there are unrelated owners;
– Relevant Insurance Policies;
– Estate Planning.
Does your business rely on a few major clients to generate a majority of it’s income?
What would happen to your business if that client restructures and reduces the requirement to use your business? What if they went out of business themselves?
You need to look at extending your market reach, either by expanding your client base and doing a strategic review of your offerings to see if your key market is looking for new products or services you may be able to offer.
At the end of the day, the more you can de-risk your business, the more valuable your business can become.
You would need to have have the necessary processes in place for at least three years for the flow on effect to the valuations to show the full impact.
The sooner the process is started for any business the better you will be.
To discuss more ways you can de-risk your business, reach out to us for a free consultation.