How to future proof your finances in small business

You only have to look at the decline of camera shops, video stores or even the value of taxi licenses to see that factors outside of your control can contribute to the success and longevity of a business. Technological developments, new trends or a change in economic conditions can cause big disruptions that will hit small businesses hard if they haven’t planned ahead.

While no one has a crystal ball, there are steps you can take to future proof your business financially and protect your assets, ensuring you are not left high and dry when conditions change.

Planning is key, you need to take off the blinkers and look seriously at what the issues and threats are that could affect your business in the years ahead. Running a small business can be all consuming and people can take it for granted that it once it has achieved success, that success will continue. However that’s not always the case.

Business owners should focus on making the most of the business while it is returning a profit, whether that’s through paying off debt or by investing in assets held separately from the business such as investment properties, share portfolios or superannuation. It’s really important to map out the goals of the business and then through forward modelling look at different scenarios of how to achieve those.

If you can be planning five or ten years before an issue arises then you will be in a much better position to deal with it. Investigating your options can be quite confronting but that is the role of a strategic adviser who should have those frank discussions with you and discuss the various options and scenarios.

Here is a financial checklist to future proof your small business and build wealth from it:


Understand where your money is going and what it enables you to get out of your business. Businesses that survive in a boom or bust environment have invested in financial strategies that take into account the ups and downs in their cashflow.

Create a saleable asset

Small businesses can be hard to sell if they rely on one or two key people who are at the heart of a business. It’s essential to take away reliance from those people and put in place well-documented policies and procedures. This is where planning again is essential; it’s not a two-  to three-year plan but a five- to ten-year process to instil the right structure.

Update technology

It’s important to keep up with the times, technology is always evolving and so should you. New systems could ensure you stay relevant and save time and money.


Extracting wealth from a business ensures you are building assets not just relying on the business to provide for you. Circumstances and conditions constantly change and if you haven’t been asset building outside of your business then you are very vulnerable to any changes.

While it comes down to individual circumstances, I’m a fan of paying down the debt on your own home, which takes the pressure off. Then if something happens in the business you will at least have that security behind you. However, others may prefer to invest in property or a product like super, there is really no right or wrong answer as it will depend on personal situations, ages and goals.

Small business owners need to think long-term, will their business be viable in 20 years or will the socio-economic or business conditions have changed and if so what is the back-up plan.

Tahni Davison, small business financial specialist, Boutique Advisers

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