As a business owner, you’ve likely had a tough few years. The challenges of Covid have been followed by the UK’s slow economic recovery and a cost of living crisis.

The Office for Budget Responsibility (OBR) recently confirmed a change to its March 2023 forecasts. The organisation now predicts that both inflation and interest rates will remain higher for longer.

Market turbulence and rising costs mean that you might have several concerns as you and your business head into 2024. Thankfully, financial advice can help with these five common business owner worries.

1. Dealing with rising costs

Back in the summer of 2022, you might have read 5 ways to combat rising costs as a business owner, which Richard wrote as UK inflation soared.

Since then, the Consumer Prices Index (CPI) has peaked and now stands at half its June 2022 figure. But the OBR doesn’t expect CPI to return to the Bank of England’s (BoE) 2% target until 2025.

You’ll need to keep a firm grip on your outgoings over the next 12 months and beyond.

Take the time now to understand your financial situation and be clear on exactly which of your costs have risen, and those that could rise further. You’ll then know which areas to review.

You might opt to take a closer look at your:

• Energy usage
• Economies of scale
• Supply chain

Also, think about reviewing your pricing. With costs higher, you’ll want to be sure that the amount you’re currently charging for your goods or services is sustainable.

2. Extracting an income

Finding the best way to take an income from your business during economic turbulence can be tricky. You’ll want to be doubly sure, though, that you’re doing so tax-efficiently.

That means making full use of allowances, thresholds, and exemptions, whether you choose a salary, dividends, or to pay your future self through tax-efficient pension contributions.

HMRC thresholds and allowances are subject to change so professional financial advice can be invaluable here. You’ll want to consider your Personal Allowance, the National Insurance contributions (NICs) threshold, and Dividend Allowance.

Be sure to claim any additional tax relief you’re entitled to and find out which Annual Allowance applies to you. Keep an eye on your dividends too, as the Dividend Allowance is set to drop again – to just £500 – from April 2024.

3. Business protection

Back in the summer of 2020, you might have read an article in which I asked ‘Business Protection Insurance: Can you afford not to have it?’ and looked at some of the protection available.

Whether you’re worried about what would happen to your day-to-day business if a key colleague died, how you’d repay a company loan, or how that colleague’s shares would be distributed, protection can help.

Losing a key person could mean losing their acquired knowledge and valuable customers. That could leave you to cover the cost of training new staff, potential lost revenue, and the mental health impact on your remaining staff.

Key person protection could help you to cover these losses and keep your business running smoothly, despite the shock of a sudden death and the loss of a colleague.

Loan and share protection, meanwhile, could help your business survive the financial upheaval of a key person’s death, ensuring you can still repay loans, and retain control of your company.

The latter could be an issue if a colleague’s shares are passed to their loved ones, who might have their own ideas of how your company should be run.

Check in with your cover and then speak to us if you think you might have gaps in your current provision.

4. Succession planning

A recent survey, published by FTAdviser suggests that almost half (48%) of business owners currently have no exit strategy in place. A further 3% were not sure whether they had one or not, while 13% answered that they hadn’t even considered the need for succession planning.

At Boolers, we can help. You’ll need to think about the lifestyle you want to live after work and then form a plan to get you to this goal.

Just under three-quarters (71%) of surveyed business owners felt confident they could step back from their business tax-efficiently if they decided to sell up or pass their business on. A worrying 14%, though, didn’t think they needed an exit strategy.

If you plan to leave your business and retire (on average, those surveyed were seven years away from this moment), you’ll need to start planning now.

Think about how and when you’ll pass on your company, by selling it or passing it to a family member only on your death.

Do you want to retain a stake in the company if you sell it? Are your potential beneficiaries sufficiently trained and ready to honour your intentions if your company passes to them? Is the business robust enough to withstand the transition?

There are plenty of questions to consider so be sure to speak to us if you’re ready to discuss your business exit or succession plans.

5. Managing your personal finances

Remember, too, not to neglect your personal finances.

Keeping your business on track, while ensuring you can meet your personal finance goals is crucial.

Check in with your adviser regularly. This can provide reassurance and also means that if your priorities have changed, we can help alter your plans too.

Get in touch

If you’d like help or reassurance as a business owner during turbulent times, we can help. Contact us with any questions you have and see how our team of dedicated professionals can help you.