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Cash flow modelling for family businesses

Succession planning and planning for the future is not something many family businesses plan for. However, we are seeing more and more family businesses seeking advice and asking what’s next for me? When is the right time to pass on the business and will I be financially stable in the future?

If these are the sort of questions you are asking yourself, then this is where we can help. At Cowgills Wealth we offer cash flow modelling as a tool to help you plan for the future to ensure you are financially stable.

So, what is cash flow modelling?

Cash flow modelling provides clients with a detailed forecast of their income, expenditure and asset position and what this is likely to look like each and every year throughout retirement. It is aimed at individuals who wish to become, and remain, financially organised. It is for those who want to create a lifetime plan and manage their tax liabilities efficiently and it’s a useful tool if you are planning to pass on the business – cash flow modelling can determine if you have built up enough capital to be able to pass on your shares in the business.

How can cash flow modelling help me?

By accurately forecasting what an individual’s financial position is likely to look like throughout retirement and illustrating the impact of different potential events that could occur and which might affect your finances, our advisers are able to help clients plan ahead for life’s changes and opportunities whilst considering questions such as:

  • When can I afford to retire?
  • If passing on the business, will I still be able to live comfortably?
  • What rate of investments return do I need to make sure my objectives are achieved?
  • How will an inheritance tax bill impact my estate and are there any ways to reduce this?

Cash flow modelling is useful in looking to provide answers to these questions. It can help you to understand the potential financial impact of investment, lifestyle and spending choices.

With our help, you will be presented with a clear and detailed summary of your financial arrangements along with an analysis of your personal expenditure, balancing your cash inflows with desired cash outflows. It gives you peace of mind that you have a plan in place to minimise tax liabilities and that adequate provisions are in place for a stable financial future.

Cash flow modelling and Cowgills Wealth

At Cowgills Wealth, we fully involve our clients in the cash flow modelling process, we get to know and understand their goals for themselves and their family. We don’t like to make assumptions or rely on guesswork when it comes to our clients’ aspirations.

A cash flow model is only as good as the information available which is why we take the time and care to fully understand our clients’ needs and we make sure that we are kept updated about inevitable changes to their circumstances and we can review and update the model accordingly.

There are, of course, assumptions to be made regarding projected inflation and growth rates, but these assumptions are well informed and we explain this to our clients so we can continually review their plan.

Cash flow modelling is not a process to be carried out once – a cash flow model is a fluid document that must be revisited on a regular basis. In that way you can be certain that it will always reflect your circumstances should anything change. Even minor changes can make a huge difference in the longer term.

Cash flow modelling is bespoke, it demonstrates to the client their current position relative to their preferred position and helps one to put plans in place to achieve their goals. To find out how we can help you, then do get in touch with one of our advisers, chris.harrington@cowgills.co.uk who can discuss your needs in more detail.

Cash flow modelling

The value of your investments and income may go down. You may not get back the original amount invested.

The Financial Conduct Authority does not regulate Cash Flow Modelling.

Family Business
Posted by Chris Harrington
11th February, 2020
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