• Patrick Murphy

Financial Freedom for Business Owners


Over the past 2 decades I have assisted numerous clients in growing their wealth and exiting their businesses. In the process they have been able to establish good lifestyles for themselves and their families, enjoy the fruits of their labour and achieve a level of financial independence that would be the envy of most people.


How I Define Financial Independence

I define Financial Independence as the ability for somebody to have both: -

  • Financial Freedom &

  • Security


Financial Freedom

Imagine being able to wake up one day and choose to close the doors on your business or pass it to somebody else. The burden of responsibility is no longer yours and you are free to live the life you choose. That is Financial Freedom.


Security

Financial independence also means having the security of knowing that you have enough money outside of your business to live the ideal life for you and your family without being dependent in any way on your business. It means having a diversity of income and capital that can provide the personal cashflows you need to cover your expenses and your required lifestyle costs for the rest of your lives. For many of my clients however, financial independence goes further. It also means being able to help their children get on the housing ladder or to be able to take over the business in the future. Or indeed to be in a position to help finance new businesses for themselves or for their family.


Finding Financial Freedom & Security

Financial independence goes beyond money, it is about creating freedom and with that freedom comes the ability to make life choices. For some their life choice will be to cease work and to live a life of leisure, whilst others will be content to work until the day they drop, whether that is for financial reward or to help others.


The desire for freedom and to be in control of their own destiny is often key to why business owners establish and stay in business. The irony however is when ultimately the business ends up controlling them and they find themselves being completely tied to it when they would prefer to move on.


Focus v Diversification

Small and medium sized businesses succeed for a variety of reasons, but one thing they have in common is that they are very focused on a particular market segment or niche or a particular group of people with certain needs. The focus can sometimes mean that the business is dependent on one person, the business owner. This can often make a business valuable for others to buy, but it can also make it much more vulnerable and at risk to factors that may well be outside of the control of the owners. Covid 19 has been a case in point that has set back years, or in some cases destroyed many highly successful and profitable businesses virtually overnight. By contrast the key to Financial Independence is ensuring that wealth is spread as diversely as possible. Thus, it is not just a question of how much your assets may be valued at on a particular day, but whether your Financial Independence would be retained when viewed against a range of ‘what if’ scenarios.


Financial independence is therefore about having the time and the money to live your life in the way you want, without compromise and with the confidence of knowing the future for you and your family is secured.

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