In a blink of an eye we are already midway through January. Were you able to get going immediately or was it a bit of a slow start to 2021?
For me the start of 2021 was a bit surreal. I ended my year ankle deep in muddy water when my house got flooded on the evening of 28 December. A severe storm resulted in our neighbours’ wall collapsing, and as their property is situated higher than our property, the water from their flooded pool and garden gushed through my house. The next week was a bit of a blur as we salvaged and cleaned the movie scene that was our life.
So why am I sharing this with you? Well, it got me thinking. You will be amazed how much thinking and perspective can happen with a mop glued to your hands for 3 days straight.
I learned a couple of things:
- We were blessed as the roof didn’t collapse and no people or pets were injured when the walls came down.
- You have no idea how well your family can pull together and work toward a common goal until disaster strikes.
- We realised once again how much stuff we have accumulated, and how little we actually really need.
So how does this tie to business?
We often think or assume that ‘things are covered’, but how often do we really ensure all is sorted and in order. Let’s look at an example:
Your office building gets flooded. What is covered by your insurance policy? But wait, you don’t own the fancy printer, you were wise enough to lease the printer. Really? What is stipulated in the contract about insurance on the leased printer?
The reality is that 2020 certainly proved that things beyond our control do happen. So, let’s take charge and control what we can.
I recommend you look at the following things in your business as a starting point:
- Short-term insurance – are your business assets covered sufficiently? When last did you have your insurance cover and asset list updated?
- Structural insurance on your business premises – when last did you have your business premises valuated and the structural insurance updated? Are you perhaps under-insured on the value of the building?
- Life insurance on the lives of the business owners and key individuals – we have sadly seen presumed healthy individuals lose their lives to COVID and other unexpected causes. How often have you heard of the super-fit healthy guy that went on a bike ride and didn’t make it home? The loss of life of a key player in the business can have a devastating impact and dealing with the financial loss can be far reaching.
- Contingent liability insurance – this type of policy refers to the cover taken out on the life or disability of the party who stands surety for the debt in the business. The amount of cover is usually equal to the debt. How have you ensured your debt?
- Review your debt – did 2020 negatively impact your debt levels? Is restructuring of the debt required? What would be the business and tax consequences of restructuring the debt?
- Budgets & Tax Planning – regardless of what January 2020 promised, chances are that September 2020 projected a vastly different picture. With February rolling up we will need to have our Feb2021 tax ducks in a row. We will also need to revisit budgets and plans from 2020 into 2021.
- Human resources – this is big part of our business that is often overlooked. But with the continues changes in the COVID Levels as announced by Government it is becoming harder to navigate our responsibilities. Labour law and employee engagement are issues we need to keep an eye on, and where necessary to partner with parties that specialise in HR for assistance. With hybrid and remote work entrenched and becoming the norm we need to ensure that policies and procedures remain in line.
- Personal estate – why include this with all the business stuff? Simple, death has an impact on business. Structuring your business often involves structuring your personal estate.
Please feel free to reach out to me if you need assistance with any of the recommendations above.
Here’s to a prosperous 2021.