What do people think of Financial planning when starting a new business?

[Max]

As a financial planner I spend a lot of time talking to people about they finances, what they earn v what they owe, insurance, protecting what you can't afford to lose and what is the best structure to use for the business. These are all important things (catch cries of our industry), but how many people develop them before they start a business? I know every body does some research before going into business, how many and how much is done on the financial side?

[BMc]

"what is the best structure to use for the business"

Careful with this one... to advise on the tax aspects of structure, you need to be a tax agent, and there are similar problems with advising about the legal aspects.

As for the rest of your question, the majority of business startups I come into contact with usually focus on the physical aspects (e.g. business cards, phones, etc). Things like business plans, budgets and financial projections are only done if the bank requires them for a loan, but people go to their accountant for those. Insurance can sometimes be ignored, unless it's blatantly required e.g. in the building game.

Where the business fits into the owners' overall wealth creation plan is something that is generally left until further down the track, as most startups I've run into perceive their business as 'a job without the problems of the job they just left' as opposed to an investment or wealth creation vehicle.

I'll be interested to see others' experiences.

[susu]

Originally Posted by Max

As a financial planner I spend a lot of time talking to people about they finances, what they earn v what they owe, insurance, protecting what you can't afford to lose and what is the best structure to use for the business. These are all important things (catch cries of our industry), but how many people develop them before they start a business? I know every body does some research before going into business, how many and how much is done on the financial side?

Hi Max,

I am a "Newbie"
I have been researching stuff for my business which I hope to get started in the not to distant future. I have made a list of things to check on AND implement. One of those things is Financial planning.

But I have only just added that to my list. There is a thread here at FS about when to start paying yourself wages?. It triggered a reminder in me - what about my future. If I am solo, who else will help me?

I am going into this with a view to being my own boss and taking my future into my own hands. I don't want to have a business for the next 20 years "for the exercise". I want to make money, enjoy what I am doing AND plan for my retirement.

So besides having an accountant and a solicitor, I will have a financial planner also, and I believe most financial institutions offer this service.

Regards,
susu

[Max]

Originally Posted by susu

Hi Max,

I am a "Newbie"
I have been researching stuff for my business which I hope to get started in the not to distant future. I have made a list of things to check on AND implement. One of those things is Financial planning.

But I have only just added that to my list. There is a thread here at FS about when to start paying yourself wages?. It triggered a reminder in me - what about my future. If I am solo, who else will help me?

I am going into this with a view to being my own boss and taking my future into my own hands. I don't want to have a business for the next 20 years "for the exercise". I want to make money, enjoy what I am doing AND plan for my retirement.

So besides having an accountant and a solicitor, I will have a financial planner also, and I believe most financial institutions offer this service.

Regards,
susu

That's excellent news Susu, I would love to hear what you're interested in getting out of seeing a financial planner and if possible when you have what you actually did get out of seeing the planner you finally choose.

Regards
Max

[Max]

Originally Posted by BMc

"what is the best structure to use for the business"

Careful with this one... to advise on the tax aspects of structure, you need to be a tax agent, and there are similar problems with advising about the legal aspects.

As for the rest of your question, the majority of business startups I come into contact with usually focus on the physical aspects (e.g. business cards, phones, etc). Things like business plans, budgets and financial projections are only done if the bank requires them for a loan, but people go to their accountant for those. Insurance can sometimes be ignored, unless it's blatantly required e.g. in the building game.

Where the business fits into the owners' overall wealth creation plan is something that is generally left until further down the track, as most startups I've run into perceive their business as 'a job without the problems of the job they just left' as opposed to an investment or wealth creation vehicle.

I'll be interested to see others' experiences.

To put your mind at ease, I didn't give tax advice, but I do try and educate my clients as to the pro's and con's of different structures used for business so they are better able to decide what might work best for them and/or ask their accountant or solicitor how these structures would work for them. Education is the key, give people the knowledge to make the best decision for themselves and their situation.

Cheers
Max