Entrepreneurs, start businesses for one or all of the following reasons.
There is not much more is there? But setting up a business and making it successful is easier said than done. In today’s world, setting up a business requires a lot of capital. Sometimes additional capital is required to take on high-value projects and/or expand the company to hire more people, or to buy equipment, or even to get a better office etc… Mostly entrepreneurs end up funding this themselves from their earnings and lifetime savings.
Doing so exposes them and their family to different types of risks. In fact the risks are compounded for business owners in the U.A.E, due to the lack of knowledge about the inheritance laws here.
This has huge implications for a business owner because his/her family may be left with no access to their bank accounts, credit and ATM cards when the father dies, sometimes for as long as 18 months till the courts decide on how to distribute the assets.
Entrepreneurs invest everything in their business because they are convinced that their business is the best investment in terms of returns. Moreover some business owners don’t even take home a salary and reinvest most of the business profits back in the business. I know people who have sold their homes to fund their business. Since all of the entrepreneur’s wealth is invested in the business, it becomes the sole source of income and a single point of failure.
If the business fails, or if the entrepreneur dies without proper income protection, his/her family could be left without any source of income. The bigger problem is when the owner falls sick. Mostly, the entire business depends on him/her and the income could stop when work stops, while expenses and business costs may continue unabated.
The key questions to ask for a business owner in relation to business risks are below:
All business owners and their families are exposed to various forms of risks. The key is to identify these risks and address them according to the gravity of the risk and its priority. What risks is your business and family exposed to? And how can you address them? To find out more, and to schedule a free initial assessment, click on the ‘Ask Amit’ button below.
Amit is an Independent Financial Advisor, based in Dubai since 1997. He is part of the prestigious ‘Million Dollar Round Table’ (MDRT), which is an elite club of the best financial advisors worldwide.
He has authored the ‘6-Step Financial Success Guide’, and the book ‘Creating, Preserving, Distributing Wealth’.
He helps business owners and professionals ‘Create A Second Income’ through investments.
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