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5 Financial Planning Tips To Empower Female Entrepreneurs

At Hennelly Finance, we’re thrilled to celebrate International Women’s Day under this year’s inspiring theme of “Inspire Inclusion.” As an all-female team, the day holds a special significance for us.

Hennelly Finance was founded in 2000 by Helena Hennelly and despite the many challenges she faced over the following two decades, including the collapse of the Irish economy in 2008, she successfully met each challenge head-on and grew the business to become a leading financial advisory firm in the west of Ireland – all while raising a young family!

Helena’s daughter Ruth is now at the helm of Hennelly Finance and like Helena, is passionate about empowering her clients to achieve their financial and lifestyle goals. At Hennelly Finance, we are in a unique position to understand the challenges women face in financial planning throughout their lives.

From the gender pay gap to navigating career breaks for maternity and family leave, caring for loved ones, and often a more cautious approach to risk than men, these factors significantly impact women’s financial security, particularly in retirement. In particular, we really understand the challenges that female entrepreneurs amidst the fast-paced nature of running a business where often the primary focus is on growing and protecting a business.

It’s crucial women in business don’t overlook essential aspects of financial planning. If you’re a female entrepreneur, consider these five tips to help you realise your own financial goals.

Retirement Planning

While you’re focused on growing your business, it’s important you don’t forget about securing your own future. Retirement planning is paramount to ensure a comfortable lifestyle post-entrepreneurship. Just as you create a strategy to develop and grow your business, it’s crucial to ensure you have a robust pension plan. With the Irish government’s compulsory auto-enrolment scheme planned for implementation in late 2024, it’s important you explore your retirement savings options before you get locked into an arrangement that doesn’t suit you. Similarly, if you have employees, now is the time to explore options to support their retirement savings.

A company pension scheme is viewed as a key benefit by employees, and at a time when talent attraction and retention is a key challenge for employers, offering job seekers an alternative to auto-enrolment may be an attractive option.

It’s important to remember that business owners operate under a distinct set of regulations and opportunities regarding pension contributions. Unlike the typical tax-relief limits applicable to individuals, companies making contributions to pensions aren’t bound by the same restrictions. This gives business owners the ability to have their companies make substantial contributions to their pensions and those of key employees, all while lowering the company’s tax bill.

To leverage the corporation tax deduction, these contributions must be made before the end of the company’s financial year for tax purposes. Pension payments cannot be retroactively applied to a prior tax year.

Sick Pay

As a business owner, you miss out on the safety net of employee benefits like sick pay.

Income protection and critical illness cover are essential considerations to safeguard your finances if you’re unable to work due to illness or injury. Income protection provides financial security by covering living expenses, mortgage payments, and childcare during your recovery period while critical illness insurance offers a lump sum payout upon diagnosis of specified conditions, alleviating your financial stress at an already very difficult time.

Remember, these costs can be claimed as tax-deductible trading expenses for your company.

Protection

Your business isn’t the only entity that requires protection; you do too. Insurance policies such as life cover and key person insurance are vital for mitigating financial risks. Life cover offers you the reassurance that your family’s best interests are safeguarded, regardless of what the future may bring.

For enhanced protection, you can extend your life cover with a Conversion Option, which allows you to continue your life insurance beyond the initial term without the need for additional medical inquiries or examinations. To address inflation and preserve the value of your life cover, you can opt for yearly increases in your cover amount, with premiums adjusting accordingly.

Another option to consider is Living Benefits which give you even greater protection. These benefits provide coverage in the event of accidents or hospitalisations, helping you manage financial burdens while focusing on recovery. Living Benefits encompass hospital payments, coverage for broken bones or sports injuries, accident payments, and surgery payments (applicable with serious illness cover).

Health Insurance

If you currently pay for private health insurance, consider having your company cover your premium instead. This is often more cost-effective than paying your premium from your post-tax earnings. Health insurance is also a very attractive employee benefit and can help attract top talent to your business. With benefits like digital doctor, physio for necks and backs, and mental health support, health insurance is an investment in your employees’ health and your business’s success.

With more than 320 health insurance plans on the Irish market offered by the three providers (VHI, Irish Life Health and Laya), finding a plan that suits your health needs and your budget can be overwhelming. Our specialist health insurance team provides a comprehensive review service of all the plans on the market, including those not generally advertised to the public, and will provide recommendations. Whether you are looking for health insurance for yourself, your family or for your employees, a comprehensive review of your plan options will provide you with access to the best plan for your needs.

Business security

Having peace of mind for the future security your business gives you the confidence to get on with doing what you do best. Shareholder Protection and Key Person Insurance serve as safeguards for businesses, particularly in unforeseen circumstances such as the premature death or incapacity of a shareholder or key individual.

The sudden loss of a shareholder not only brings personal tragedy but can also trigger significant challenges for surviving shareholders and the deceased shareholder’s family. These challenges may include difficulties in integrating a new shareholder, potential loss of control, and the inability to buy out the estate of the deceased shareholder. To mitigate such risks, it’s imperative for businesses to proactively plan for these eventualities. Share buy-back agreements and specialised share buy-back insurance can play a pivotal role in ensuring smooth transitions and continuity in business operations in the event of the worst case.

Similarly, Key Person Insurance offers financial protection in the event of the death, serious illness, or disability of a key individual vital to the company’s operations. This insurance coverage can alleviate the financial strain caused by the loss of a key person, whether it be covering outstanding loans, temporary salaries, or recruitment costs. If the absence of a key individual leads to decreased profits, Key Person Insurance steps in to cover these costs until the business has sufficiently recovered. By investing in Key Person Insurance, businesses can safeguard their financial stability and ensure continuity during challenging times, thereby reinforcing their resilience and longevity in the marketplace.

The takeaway

Prioritising your financial well-being is essential not only to your business success but to helping you achieve the dreams you have for your future, too.

Having the right financial strategy gives you peace of mind that whatever challenges come your way, you’re ready to face them with confidence.

To find out more, get in touch with our team for a complimentary chat.

 

 

 

 

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Insurance Brokers & Financial Consultants,
Unit 3B, Tí Phuirséil,
Barna, Co. Galway.
H91 AF1W

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Hennelly Financial Services Ltd. t/a Hennelly Finance & Health Insurance Shop is regulated by the Central Bank of Ireland. Directors H. Hennelly, R. Hennelly. Registered in Ireland, Company Reg No: 32727.
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