ABC EXAMPLE Part 1

Transcription

1 ABC EXAMPLE 20 August 2014 Financial Solutions for Business Owners

2 Financial Fitness Report Dear Mrs. Robertson Thank you for the time spent to complete the Financial Fitness Analysis. The report consist of 2 parts : Part 1: Part 2: A holistic summary of your Business Growth Stage and, A summary of the specific needs identified in your business within the following areas: - Business Continuity - Wealth Creation - Employee Benefits Part 1 Stage 4 Ambitious Stage "Expand & Risk" UNHEALTHY & POTENTIALLY DANGEROUS CHARACTERISTICS & BEHAVIOURS Not planning for results but just assuming it will happen - because of past successes Believing that more and more sales and opportunities automatically means success Not having a handle on real costs Losing money because of poorly thought out commissions, rebates, discounts Owner/entrepreneur putting too much time into hobbies, community, investments and ego driven activities Won't develop controls and administrative systems, policies and procedures Owner delegates authority without controls and systems in place Founder acts as if the company exists for him/her rather than the founder fitting into the business Owner continually gives authority and takes it back from new professional manager Takes over a "cash rich", "Establishment Stage" organisation without ability to change "don't rock the boat" mentality and ingrained clichés. (This sometimes happens) VITAL SUCCESS FACTORS & BEHAVIOURS Must develop policies, procedures and philosophy that support the what not to do approach rather than what else can be done - slow down and focus Must put authority and responsibility with qualified people but with policies and systems in place Must bring on a professional strategic type manager to avoid major crises in order to move to stage 5 - The Turbulent Stage Entrepreneur must be willing to work with and support the professional manager. We trust that this objective Financial Fitness Analysis has and will release substantial business value for you. Best wishes HEAD: SANLAM BUSINESS MARKET TELEPHONE : FAX : (021) ADDRESS : sme@sanlam.co.za WEBSITE :

3 Part 2 Summary of your business needs The documented feedback was used as the baseline for reporting purposes. Each of the business areas where needs exist at present has been assessed in order to point out to you the importance in fact of addressing such needs. Specific Need / Opportunity Rating 1 = Not important 2 = Take Note 3 = Important 4 = Very Important 5 = Most Important Remarks Area of Business: Business Continuity Continued existence of the business Buy and sell agreement - There is insufficient life and disability cover to fund the buy and sell agreement. 5 Insufficient funding to finance the purchase will add to the risk. Personal Risks - Currently you do not have a will. - Indication was given that you have a will, but it was last reviewed years ago. Financial Risks Directors loan account - Although you have a debit/credit loan account, no provision has been made for the settlement thereof in case of the death or disability of the owner(s) concerned The financial future of your dependants is in danger if you do not have a will. It could even result in your business collapsing after your death. Your dependants' financial future is at risk if your will is not up to date. This can even cause your business to fail after your death. No provision in this area can cause severe cash flow problems for your personal estate or your business. Money due to the business - You have debtors who regularly owe large amounts to the business. 5 Diligent debtors control will reduce the exposed risk on cash flow. - Your debtors are not ceded as security for any funding facilities. 5 Instead of providing your own security for funding facilities, you have the option to use a good quality debtors book. Risks with regard to employee(s) Key person insurance - The business does not have any plans ready for the financing of the replacement of key persons. 5 This is a liquidity risk to the business. Asset Protection Business - The assets of the business are not insured against fire. - The assets of the business are not insured against employee liabilities. - The assets of the business are not insured against employee fraud. Financing - You have indicated that your business requires equipment finance. - You have indicated that your business is not using debtor's finance, invoice discounting or factoring as means of financing. Electronic Money Transfer - Your business has debtors which can be collected via debit order Not insuring key assets in your business may put your business operations and existence in jeopardy should an eventuality occur. Not insuring key assets in your business may put your business operations en existence in jeopardy should an eventuality occur. Not insuring key assets in your business may put your business operations en existence in jeopardy should an eventuality occur. Sanlam Business Market can assist you by facilitating your finance requirements via our panel of financial institutions, if it meets their qualifying criteria. Your debtors book may hold the key to improve your cash flow situation substantially. The timely collection of debtors is critical to the survival of your business. 80% of business fail due to cash flow pressure as a result of long debtor collection periods.

4 Specific Need / Opportunity Rating 1 = Not important 2 = Take Note 3 = Important 4 = Very Important 5 = Most Important Remarks Area of Business: Wealth Creation Asset Management - You indicated an interest in the trading of shares. Area of Business: Employee Benefits Retirement funds - Your business does not have retirement provision for its employees. Medical Cover - You do not have medical benefits for yourself In order to build a share portfolio of substance it is imperative to apply the knowledge of an expert. Sufficient retirement provision for employees will ensure a trouble free old age. It also bares a tax relief when investments are made in specified retirement solutions. High medical expenses can bring about cash flow challenges therefor careful consideration should be given to the most appropriate and cost effective Health Care Solution.

5 Financial Fitness Report What are you to do? Now that the Financial Fitness of your business has been established, are you satisfied with the result? On which aspects would you like to take corrective steps? Sanlam can assist you with the solutions. All you need to do is contact our friendly staff at and they will arrange the process for you. Simultaneously you can subscribe to our FREE business related articles. Financial Solutions for Business Owners - your One-Stop service to unlock the full potential of your business. Licenced Financial Services Provider

6 Financial Fitness Jobcard for ABC EXAMPLE Specific Needs / Opportunity Create Date Solution Responsible Person Start Date Exp completion Date Act completion Date Outcome Business Continuity Continued existence of the business There is insufficient life and disability cover to fund the buy and sell agreement. Personal Risks Currently you do not have a will. Indication was given that you have a will, but it was last reviewed years ago. Financial Risks Although you have a debit/credit loan account, no provision has been made for the settlement thereof in case of the death or disability of the owner(s) concerned. You have debtors who regularly owe large amounts to the business. Your debtors are not ceded as security for any funding facilities.

7 Specific Needs / Opportunity Create Date Solution Responsible Person Start Date Exp completion Date Act completion Date Outcome Risks with regard to employee(s) The business does not have any plans ready for the financing of the replacement of key persons. Asset Protection The assets of the business are not insured against fire. The assets of the business are not insured against employee liabilities. The assets of the business are not insured against employee fraud. Financing You have indicated that your business requires equipment finance. You have indicated that your business is not using debtor's finance, invoice discounting or factoring as means of financing. Electronic Money Transfer Your business has debtors which can be collected via debit order. Wealth Creation

8 Specific Needs / Opportunity Create Date Solution Responsible Person Start Date Exp completion Date Act completion Date Outcome Asset Management You indicated an interest in the trading of shares. Employee Benefits Retirement funds Your business does not have retirement provision for its employees. Medical Cover You do not have medical benefits for yourself.

9 EMPLOYEE BENEFIT STRUCTURE AND HEALTHCARE QUESTIONNAIRE (Optional) 1. Section A: The Business 1.1 Business name 1.2 Contact person 1.3 Contact number 1.4 address 1.5 Physical address 1.6 Industry or type of business/s 1.7 Financial year end & annual salary review dates 2. Section B: Common Challenges employers are facing Longevity - employees retiring and living longer than what their savings can provide for, thus employees return to the employer seeking employment! Death - employees die without having life cover in place and then dependents seeking financial assistance from the employer! Disability - employees being disabled without having any form of income replacement cover and then seeking financial assistance from the employer! Investment - retirement savings investments are not reviewed on a regular basis in line with a wealth generation strategy in order to ensure investments are on track to meet or exceed their long term goals! Tax - using the tax concessions effectively thus maximising end benefit value for employees! 3. Section C: Insured Benefits Does the business have a Group Life Assurance Scheme? What are the benefits (i.e. multiple of salary etc)? Who are the Brokers and /or the Underwriters? Have there been any claims (when and how much)? Does the business have a Group Funeral Benefits Scheme? What are the benefits (i.e. number of units etc)? Who are the Brokers and /or the Underwriters? Have there been any claims (when and how much)? Does the business have a Group Disability Income Scheme? What are the benefits (i.e. multiple of salary etc)? Who are the Brokers and /or the Underwriters? Have there been any claims (when and how much)? 3.4 Does the business have a Trauma Scheme? Yes No What are the benefits (i.e. multiple of salary etc)? Who are the Brokers and /or the Underwriters? Have there been any claims (when and how much)? Yes Yes Yes No No No

10 4. Section D: Pension and Provident Fund Benefits Questions 4.1 Does the business have Pension Fund Yes No Provident Fund Yes No Both Yes No 4.2 Indicate contributions and insert description if applicable Pension Fund Provident Fund Member contributions Description Employer contributions Description 4.3 What are the group risk benefits(multiple) for the different categories of members Pension Fund Provident Fund multiple value 4.4 Name of Administrator Current total fund asset value Approximate value of directors fund values How long has fund been established? 4.5 Does your fund have a comprehensive investment strategy? Yes No How often is this reviewed? How successful has this strategy been? 4.6 Have there been any claims under the Fund? Yes No 4.7 How do you rate, out of 10 the: Effectiveness of the Administrators; Access to information via the Retirement Fund Web; Advisors 4.8 Do you have a sample of a member benefit statement, a copy of the rules and a full schedule of current members to assist with this investigation? Please provide a schedule of the membership and benefits for us to provide a quotation. 5. Section E: Healthcare Questions 5.1 Does your business offer a Healthcare Solution? Yes No 5.2 How many employees does your business employ? 5.3 Does your business have a payroll department? Yes No 5.4 Do you have a healthcare broker? Yes No

11 Intermediary details Name & Surname Contact Number address Sanlam Contract

12 Needs Covered by FFA and of Business 1. Business Continuity Client Need Solution / Referral Resource Continued existence of the business Personal Risks Financial Risks Risks with regard to employee(s) Facilitate the of Business Refer to Sanlam Trust Facilitate the of Business Facilitate the of Business / Obtain independent legal opinion Asset Protection Refer to Sanlam Business Market Call Centre : Santam ( ) Financing Refer to Sanlam Business Market Call Centre : Business Partners / Anglo African Finance ( ) Electronic Money Transfer Refer to Sanlam Business Market Call Centre : Multidata ( ) 2. Wealth Creation Investment Advice Asset Management Refer to Investment advisor Refer to Sanlam Personal Investments 3. Employee Benefits Retirement funds Medical Cover Death or Disability of Employees Refer to EB Specialist / Sanlam Umbrella Solutions Refer to Sanlam Health Care Distribution Services / Completemed Refer to Employee Benefits