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“A business owner typically focuses on the nitty gritty of the business, because this is where their interest and passion lies. Yet, taking a simple step back may help them realise the need to take care of their personal finances beyond the day-to-day running of business. Failure to do so will not only impact their own personal finances, but can determine the continuity of their business and the value proposition which they present to their employees.

“In practical terms, a business that doesn’t have a clear plan of how it will operate should one of the key partners die or become disabled, faces immense risk. This kind of scenario can spell the end of the road for a business and can destroy the value which the partners have created over many years.

Moreover, when a business owner dies without a will or with a will that isn’t up to date, it can cause immense trauma to their family if their will cannot be properly executed. Rossouw says the reasons why financial planning fall by the wayside can include anything from pure ignorance and failing to understand the implications of poor planning to avoidance because of the potential complexity involved.

The answer, he says, lies in getting the basics in place and appointing a qualified financial planner. In practical terms it means paying attention to the drafting of a will and an estate plan, getting sufficient life cover to enable the execution of the will as well as providing for dependants, healthcare and retirement planning in place. Thereafter business basics like short-term insurance, buy-and-sell agreements, key person insurance and basic employee benefits should follow.

Sanlam Life Insurance is a licensed financial service provider.
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