Monthly Archives: September 2017

New State Pension Age (SPA) – How will it affect your retirement plans?

In July this year, David Gauke the Secretary of State for Work and Pensions announced new plans meaning that the rise in the SPA to 68 will now be phased in between 2037 and 2039 rather than from 2044 as was originally proposed. The changes were announced after the Government accepted the recommendation of ex-Confederation of British Industry boss John Cridland, who carried out an official review of future state pension age increases.

 Those affected by the changes are those born between 6 April 1970 and 5 April 1978 and currently between the ages of 39 and 47, but the exact date that individuals can expect to receive their State Pension will depend upon the year and month of birth.

Why is it changing?

The changes to the SPA are aimed at bringing women’s SPA into line with men’s, and taking account of everyone living longer.

When the State Pension was introduced in 1948, a 65-year-old could expect to spend

Planning a business exit: Eight ways to maximise value and attract buyers

As a business owner, you will have a passion for what you do but when it comes down to it, the reason most people go into business is to make money. They focus on maximising the value of the business for the point when they come to sell it. Despite this, we come across many examples where business owners fail to either maximise or extract their business’ value, because they simply don’t have the strategy to do so.

Your business may be your pride and joy but when it comes to the time that you want to exit from it, you need to be able to convince someone else of its value too.

So we thought it would be helpful to draw up this handy checklist:

  1. ‘Size does matter’ – you need to have developed your business to a level of turnover that will maximise value.
  2. Your business model needs to be reflected in the day to day business operations – is it delivering consistently, in terms of customer service; online presence; the workforce; pricing strategy; materials and suppliers?.
  3. Repeat business is crucial – do you have clients on long-term retainers, extended contracts or some type of residual income trail? We all know it’s easier to keep an existing client than to find a new one.
  4. Is your business able to generate new business leads, enquiries and sales without relying entirely on you or one key person’s skills and sales ability?
  5. Businesses that are centred around systems are simpler to run, less stressful and generally less risky. This makes them more attractive to a potential buyer and, usually, more valuable.
  6. How are your employees incentivised? How is their performance measured and rewarded? If you have a profit share-based plan or an employee share ownership plan, this substantially reduces one of the key risks for buyers – that your employees will exit when you do.
  7. Effective corporate governance and compliance can also add considerable exit value because they are seen as reducing risk.
  8. The business must be able to operate independently of your personal involvement. To put it simply, will your business survive when you’re no longer a part of it?
planning a business exit

Three types of financial management in business owners

types of financial management

Every business owner is different with their own unique style. But they all have one thing in common – the finances will be fundamental to the success of their business.

Depending on their personality, however, they will all have a different way of approaching financial management.

From our experience of working with various business owners, we have identified three key types. Do you see yourself in any of these?

The fantasist – is great at coming up with the next Big Idea and is full of creativity and vision. While this may be good news for the business, it might not be the best approach for the finances. This type of person will tend to make decisions based on gut instinct and intuition rather than looking at the hard data or evidence. The danger can be that, without a sound grasp of the figures, those brilliant ideas may never stand a chance of becoming reality.

If the fantasist sounds a bit like you, it’s a good idea to make sure you have someone else in the business who can provide some balance and rein you in from time to time. Enjoy being a visionary by all means but make sure you have a ‘detail merchant’ on board as your financial director or accountant too!

The gambler – loves an opportunity and is to be applauded for their spontaneity. On the positive side, this entrepreneurial business type can make the most of their circumstances at the right time and get ahead of the competition. However, their impulsive nature can also lead them to jumping in without thinking and taking the business in a direction that may not be the best financially.

If you’re someone who is always spotting the next ‘golden opportunity’, make sure you have someone who can manage your financial data accurately and can present the figures to you right away so you can make informed decisions.

The disorganiser – we’ve no doubt all come across business owners like this. Their office is the hub of the operation but it’s often a veritable Aladdin’s cave, piled high with stacks of paper. Financial management is not a priority for them but rather something that gets in the way of the operational side. It’s only when they need to find that all-important receipt that they will turn their attention to the neglected paperwork, panicking over every other invoice and bill they come across as they search.

It doesn’t mean they’re not a good business owner, just someone who needs a good accountant to keep things in order.

So which are you most like?

If you recognise certain traits of any of these in you, are there things you could do to change your approach? Or could you get others in the business who are of a different temperament to provide some balance?

types of financial management

Eight ways to improve your relationship with your financial adviser

Who would you say is the most important person you have a relationship with, when running your own business? Your bank manager, accountant or lawyer? Maybe your best client, your preferred supplier or your spouse and family? No doubt all of them, to varying degrees. But the one we’re going to focus on here is the one with your financial adviser.

We’ve identified eight key ways you can be a good client:

  1. Be honest – share your goals, objectives, setbacks, triumphs and successes with your adviser so they can best help you achieve your aims – and keep them informed if your circumstances change.
  2. Don’t keep shopping around just based on the lowest fee but look for competitive and reasonable rates in light of what is being offered. Yes, the fee structure should be fair and and transparent but good advice deserves appropriate compensation.
  3. Don’t judge investment results based on just one year’s return – three or five years is a much more realistic timeframe – what is more relevant is whether your investments are on track to meet your goals.
  4. Don’t expect the impossible – in the current climate you’re not going to get 10% returns so don’t expect them – also accept that there will inevitably be some ‘down’ years.
  5. Make sure you compare like with like and understand the different types of advice being offered: for example, an adviser can offer both financial planning and investment advice; DIY advice doesn’t carry a fee but means you are entirely on your own in terms of investments, portfolio building, taxes and estate planning. Online tools can help with investments but usually do not provide financial planning.
  6. Be aware that small portfolios may get less attention – ask an adviser what level of service a portfolio like yours would get. If you only have a small amount to invest, for example, less than £75,0000, it may be that online advice would be more appropriate.
  7. Try not to chop and change adviser too frequently – it cancels out all the preparatory work done in getting to know you and your requirements. As a result, an adviser may be reluctant to take someone on who moves around a lot as it suggests it is very difficult to meet their long term goals and expectations.
  8. Prepare for any meeting with your adviser as you would for a business meeting – review your investments before the meeting and jot down anything you want to ask.
running your own business

Work-Life Balance for Business Owners

work-life balance for business owners

Did you dream that as a business owner you’d be able to call the shots while you took the odd day off to play a round of golf or take a trip to the coast? Maybe it’s not working out quite like that in reality.

While you no doubt knew you‘d have to work long hours, you may have thought you’d feel more in control of your schedule.

Well, you’re not alone. The perfect work-life balance can be difficult to achieve. In fact, we’d go as far as to say the very phrase is misleading as work is an integral part of life, not the opposite. Being satisfied at work contributes to your overall life goals and personal sense of fulfilment. It’s important, however, that while striving to make a successful business, you make time for your family and friends too.

Starting out

When you first set up your business, it’s inevitable that you’ll be really busy as you get it off the ground. And at this stage, you’ll be fully prepared to put the hours in. You may have to make certain sacrifices but you trust that the rewards will be worth it eventually. So, while you may not be able to see the children before they go to school or may miss their bathtime sometimes, the blood, sweat and tears will pay off hopefully in the long run. Keep reminding yourself why you’re doing it.

Staying organised

Keep focused on your short-term objectives and long term goals. If you feel like you’re always running round like a headless chicken or endlessly firefighting, take a step back and review your priorities. Use technology and automation as much as possible to create a scheduling system and organise your diary. Project management software can set and assign tasks to other members of the team, giving you a clear overview of where any project is up to.

Getting up and running

At this stage, you should start delegating certain responsibilities. It’s all too easy to get bogged down in the day to day running of the firm. Remember, your role is to oversee the growth of your business so make sure you give yourself the space and freedom to do so. Consider hiring one or two extra employees. Think about using freelancers if it’s just a short term need and if your business is seasonal, temporary staff can be a flexible solution.

Maintaining the flow

Create opportunities so you can spend more time with those close to you. One of the perks of being your own boss is that you’re in charge of your schedule, so make sure you book lunch with a friend or your spouse from time to time. And keep to those engagements as you would a work commitment. Don’t get into the habit of always eating your lunch at your desk. Try and leave work early occasionally for a family outing or weekend away. Above all, put your health first – if you can, fit a swim or yoga session in at lunchtime or organise things so you can run or cycle to and from work.

Celebrate milestones

And finally, mark those achievements. Thank all those who’ve helped you get there, your employees and your support team back at home. By keeping a healthy work-life balance, you’ll be sure to have plenty more milestones to celebrate!

work Life balance

The Best Financial Advice for Business Owners

financial advice for business owners

We work with many business owners from many varied sectors. One thing they have in common is that they all ask us for ways to improve their businesses and gain that all-important competitive edge. Well, if we had the magic answer we’d be billionaires and much as we love our jobs, we’d be unlikely to still be running a financial planning business in Manchester! Nonetheless, we can offer our three top tips, which we know from experience do make a real difference.

Access capital while you can

After the financial crisis, it was notoriously difficult for small businesses to gain access to capital. The banks do have more money to lend now so it has become a little easier. Of course, you will still need to have a sound business plan and good credit, and it may be that you need to personally guarantee the loan but it is worth exploring for the following reasons:

  • it enables you to expand your business by buying another company or to launch a new product or service
  • you can refinance any old debt at today’s lower interest rates
  • you can establish a line of credit for a rainy day when you may need it for payroll or some other temporary ‘cash crunch’ requirement.

Engage rather than employ

Make the most of the expertise all around you. There are a vast number of talented people working as consultants these days as more and more people opt to take early retirement but continue to work part-time. Rather than have to employ someone on a full-time basis with all that entails, you can avail yourself of their experience by engaging them as a consultant. This way you ensure your business benefits from their considerable expertise. Or often these consultants have left big companies to start businesses of their own. One major advantage is that they can ‘cross-pollinate’ as they have worked with a vast range of other businesses so can share best practice with you and give you a fresh perspective. As well as enhancing your own offering, it can also prevent you from making the costly mistakes of others.

Start small – have a lean start-up

You don’t have to launch your new product with all its bells and whistles right from the kick-off. You certainly don’t have to have a flash office at outset. Keep your overheads as low as possible. We encourage many businesses to start small and test the water, by developing their product and service and launching it on smaller markets first. The big boys like Starbucks and Proctor and Gamble do it all the time; testing new concepts on smaller markets before releasing their products globally – so why shouldn’t you too? It’s a great opportunity to gain valuable feedback from your target audience and make refinements.

There are lots of opportunities out there – grab them with both hands, use the top tips above and improve your chances of success!

financial advice for business owners

How much money is enough?

How much money is enough

You may have had it drilled into you from an early age that you should save. Being a diligent sort of person, you may have always done that; maximising your yearly ISA allowance, putting 6% of your salary into your pension, investing wisely, even purchasing a buy-to-let property as an additional investment.

But once you’re into the habit, is there a danger of saving too much? More importantly, when can you afford to stop?

Of course, it’s different for everyone. Perhaps a more relevant question is what kind of lifestyle are you planning for when you have financial independence and how much will you need to meet those requirements?

Our culture today is focused on acquiring things: the latest iPhone, that designer jacket you’ve seen, a top of the range sports car. There comes a point, however, when we reach a kind of saturation point without even realising it. That’s why it’s good to take a step back and consider how much money you really need.

Once your basic needs are met, consider how much extra money is truly necessary to cover your routine bills and your retirement income. If you keep classing ‘nice to haves’, such as the annual skiing holiday or the latest iPhone as ‘must haves’, then the larger the portfolio you will need to support those purchases.

And much as we may be surrounded by an acquisition culture, we all know deep down that ‘money doesn’t make us happy’. In fact, many people realise it takes a lot less than they think to be comfortable. After all, many of the best things in life are free: a walk in the park, a beautiful sunset, icing cupcakes with the grandkids.

Your definition of ‘enough’ also becomes critical as it determines the level of risk you will need to take to achieve your goals. You may need to change the exposure to risk in relation to the level of return that you’re happy with as you get closer to retirement, as your focus will be shifting to maintaining and protecting your nest egg.

As a small business owner, approaching retirement, your objectives may be along the following lines:

  • to go part-time or work for your company as a non-exec, just a couple of days a month
  • to have an annual winter and summer holiday abroad with a number of short breaks in the UK
  • to help your children and grandchildren with their educations or to get on the property ladder
  • to simply be more in control of what you choose to do

With prudent financial planning, you may find you can start retirement much earlier than you thought and that you can spend more once you’ve retired too. The secret is knowing when you can stop saving and start spending.

how much do I need to retire

Successful Business Owner? Plan to Retire or Exit Your Business Some Day?

how to successfully exit your business

Answer these 7 Questions as your first step …

Your dream may have always been to own your own business. But once you’ve achieved that and run it successfully for several years, you may be finding your life goals are shifting slightly. Are you beginning to wonder when you might be able to leave it all behind and do something entirely different instead?

If so, ask yourself these 7 important questions:

  1. When do you want to exit? Try not to answer with just a number of years, ie, ‘in the next ten years’, as the temptation is just to keep rolling that on. Instead, think about an ideal age range such as ‘not before 55’ or ‘not after 60’. This gives you something to focus on and helps you define how much time or how little you have left to plan a successful exit.
  2. What is your most likely exit strategy? There are, in fact, only four possible answers – passing the business on to a family member, selling it to an insider, selling it to an outsider and squeezing it dry. Think carefully about which best suits your particular circumstances. Also, consider whether your business growth strategy is compatible with your exit strategy.
  3. How much is your magic exit number? No doubt you’re accustomed to thinking about getting the maximum value for your business. But in fact, it’s more significant to consider how much you need from the business to achieve your financial freedom. That’s your magic exit number. The lower the number, the less dependent you are on the business and the more flexible you will be to leave. A good financial adviser using financial modelling tools can help you calculate that magic number.
  4. Where will it come from? Are you confident that you are fully aware of all the tax-efficient funds that may help you exit? Make sure that you identify strategies that convert both today’s current cash and tomorrow’s future equity into your personal wealth. Don’t delay everything in the hope that you will get paid eventually as that may not give you the results that you need.
  5. What risks do you face prior to exit? These can come from a number of sources – lost key employees, problems with co-owners, health issues. In fact, anything unexpected can, by definition, undermine your carefully prepared exit plan. Business owners often struggle with risk management because the right mindset to protect your business is very different from that used to build up your business in the first place.
  6. What will you do in life after exit? A successful exit is about so much more than just a financial transaction. Think carefully before you exit about how you want to spend your time and talents once you’ve left. What dreams do you want to fulfil? Do you want to travel? Or take up an interest you’ve never had time for? Spend more time with your family or lend your skills to a voluntary organisation? We would recommend you consider what steps you can take to make sure you’re as fulfilled as when you ran your business.
  7. Who should be in your exit planning team? You should involve people responsible for tax, legal, financial, family, business and HR issues. Ideally, they should all collaborate to come up with a sound exit strategy. Once you have identified your experienced team, one person should be in charge of driving the process forward. Meet up regularly to make sure you’re on track.
business exit strategy

The steps to take to identify a good financial adviser

how to identify a good financial adviser

If you are looking for a new adviser, or are taking advice for the first time, it’s important to make sure that the adviser you choose is a good fit for your requirements. We know we won’t be the best fit for everyone looking for financial advice in the UK so using our industry knowledge, here are five things to consider as you review the advisory marketplace.

Independent or restricted?

An independent adviser will have access to what is known as the ‘whole of the market’, whilst a restricted or tied adviser will only be able to offer you solutions from a predetermined list of options. Whilst these options may contain a choice suitable for you, they also might not! Investigate your adviser’s status and assess any limitations.

Whole family, business and everything else

A good financial plan will take account of your family’s ongoing requirements. If you are a business owner, this is also likely to be a feature of a strong plan. Investigate how far your adviser is proposing to go. Are they limiting your plan to just you, or will your family and your business be involved too?

Client recommendations

Good advisers normally grow by referrals, which means that they’ll have plenty of clients only too happy to spend five minutes on the phone to you talking about their experience to date! Don’t be afraid to ask for a quick chat before you commit.


Technology has revolutionised financial planning over the last ten years or so. Most genuine planners will now use financial modelling software and other tools to demonstrate to you how the plan they are proposing can come to life. Without these tools, it can be difficult to get full insight into proposals and expected outcomes.

Pay attention to charges

Advisers will normally charge for their services as a percentage of your assets, but there may also be other charges involved; from the funds you are invested into, for example. This is normal, but pay close attention to what these charges are and compare them to alternatives. Even a 1% charge difference can be significant over a long period of time and dealing with reasonable amounts of money.

good financial adviser

Planning for your ‘Financial Independence’

One of the critical aspects of Retirement Planning; or as we like to call it, your Financial Independence, is structuring your financial affairs to make sure that you have enough money to ensure that, if and when you stop working you can spend your time the way you want to, doing those things that you always intended to do.

 Too complicated to think about – A survey conducted by BlackRock’s Investor Pulse showed that in the main, the biggest financial priority for individuals surveyed was ‘funding a comfortable retirement’. Yet many people spend more time planning their holiday that their retirement – perhaps because planning for retirement seems too complicated to think about.

Don’t know where to start – We are all living longer, the State Pension Age is increasing and pensions legislation is ever changing. Understandably, we want an active, comfortable retirement but often don’t know where to start the savings process.  If confusion and a lack of understanding around your retirement needs have led to put you off planning and saving, you’re not alone – in fact, over half of people in the UK are in the same position.

However, the sooner you start to plan, the sooner you will start to consider the changes you can make to ensure that you are in control of your ‘financial independence’.

 Consider the following steps: –

Step 1 ~ Target

Know what you need – set yourself a target.

The closer you are to retirement, the more likely you are to know how much income you will need to cover your outgoings. If you have longer to go until retirement, it is still good to have an idea of what you are aiming for – and you should review this every year as you get closer.

Step 2 ~ Plan

Know what you already have.

Understanding what you already have will help you understand how far you are towards your retirement target. If you have several different pension plans, it may be worth considering bringing these all together into one account.  In addition to pension plans, your financial independence may also be reliant on other assets, investments or income so it’s important to consider these too.

Step 3 ~ Action

What you need to think about

  • Are you saving the right amount?
  • Are you invested in the right kind of funds?
  • When can you realistically retire / reach financial independence?

How close are you to reaching your financial independence? We can help you understand your own situation and retirement goals and then align these with what you already have in order to identify how close, or not, you may be to achieving your goals. We can then help you put appropriate measures in place to help you spend your future doing those things that you always intended to do.