Planning your business future

Setting up a business can be hard, especially when you don’t know what you don’t know, but good decision-making is based on understanding your options at outset. Time spent to plan and take advice from trusted professionals can be rewarded many times over. Beever and Struthers have partnered with Pareto Financial Planning to expand the scope of the advice we provide and to help you get the most from business ownership.

Having vision and a business plan is helpful as this can drive the advice to set up as sole trader, partnership or limited company. Each have their own tax rates and rules and can be difficult to navigate on your own. Also, knowing If you’re planning to pass the business down through family might need a different structure than if you’re planning to set up, grow and exit in a few years’ time. Professional advice and the right choice at the start is much less complicated than having to unravel a business to create a new structure.

As your business grows the extraction of profit brings planning opportunity. As a limited company, you can extract profit through dividend, salary or both. You may also be able to take advantage of tax reliefs and allowances, such as Research & Development tax credits and pensions. As a sole trader or partnership, your options are more limited, but your compliance and professional fees may be lower. Looking forwards, think about whether you might acquire other businesses or if you are looking for a quick exit and sale - knowing this helps you and your advisers minimise income, capital gains and inheritance tax.

Timing your exit and the structure of it, whether through a trade sale, Employee Ownership Trust (EOT) or Management Buyout (MBO) needs to suit all parties. A carefully planned deal can result in better outcomes than price alone, with early, professional advice integral to that. Pension planning can’t be overlooked and should feature throughout your business cycle. You may not have the cash flow to support significant pension payments at the start, but it is useful to make contribution at the earliest opportunity. The significant tax benefits of pensions and that they generally fall outside your estate for inheritance tax purposes is also a key consideration.

Advice shouldn’t stop when you sell. Planning your cashflow, tax, investment risk and adapting to regulatory or legislative changes all require support and input. You need and deserve the best from trusted advisers and their partnered connections – you need more than an accountancy firm!