Tuesday, June 3, 2014

Five Ways to Protect Your Business Assets from Changes in the Economy

Assets (Photo credit: LendingMemo)
Despite bursts of positive news in the media about the economy, there is still a lot of contradictory news that counters this optimism. The more uncertain the economy, the more important it becomes to protect your business assets.

Your business assets include your office furniture and fixtures, your computers and electronic equipment, your real estate and vehicles. In other words, your business assets are the things that you used your start-up capital to purchase so you could run your business.

A Simple 5-Point Protection Plan

1. Get an asset protection plan. Don’t wait to see what happens, as this will usually result in unexpected expenses and losses you’re not prepared to deal with, let alone cover. Plan ahead, even if your asset’s future seems secure. Use asset preparation to counter any possible claims against your business. You can’t predict the future, but you can do everything in your power to protect your assets before a process server shows up at your doorstep.

2. Get liability insurance. Although you might feel safe now that you have an asset protection plan in place, you should still get professional insurance. An asset protection plan will supplement your insurance plan. It also works the other way: your insurance plan will supplement your asset protection plan. Liability insurance is one of the best ways to protect your future finances—compensation payments can be astronomical and having a plan which will cover these can mean the difference between failure and stability for your business’ future.

3. Get clear on your finances. Separate your personal finances from your business ones. This will help you differentiate between your personal and business assets. Protect your personal assets through a trust and protect your business assets through an LLC, partnership, or corporation. Even if you lose your business for whatever reason, you should take measures to be able to fall back on your personal assets.

4. Begin tax and estate planning. While your asset protection will do a lot for you, there are some things that it cannot do. For instance, you cannot make gifts with asset protection—this is a fraudulent transfer. However, with tax and estate planning, it is not a problem and you will be able to use these resources as you wish.

5. Think of getting a self-directed IRA. One way to maximize your investments is through a flexible checkbook IRA. After a custodian opens up an account for you, you can buy precious metals, stocks, real estate, trust deeds, mortgage deeds, energy investments, promissory notes, and a lot more investments than a traditional IRA would allow. 

If the currency, for example, continues to hyper-inflate at its current rate, wouldn't it be nice to own precious metals? With a checkbook IRA, a Medicine Hat financial planning specialist says, you can diversify your portfolio, invest in assets you understand, access alternative investments, and lean on commodities to protect yourself and your business against any changes in the economy.

Keep in mind that your business assets include any and all items listed on your company’s balance sheet as the things your business owns. The security of these assets can make or break a company, depending on how well-protected they are. Changes in the economy can endanger the assets of any business, of any size, so it is always wise to be prepared for periods of recession, even in the midst of an economic boom. By using these five strategies, you will be able to protect and retain ownership of these assets.

Informational Credit to Thomson Schindle Green Insurance & Financial Services Ltd

1 comment:

  1. This is a great comprehensive list that really breaks protection down to the most important areas - thank you!


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