South African research shows that between 70% and 80% of small businesses fail. In fact, less than 50% survive beyond five years. Research overseas indicates that 50% of enterprises fail within the first year and 95% within the first five years.

Being an entrepreneur is exhilarating. Everyone dreams of being the next Shuttleworth, Branson or Musk. But does this make you ‘bullet proof’ when it comes to protecting your assets, retiring from the business, and doing so in the most efficient way?

Entrepreneurs generally have a unique expertise or competence which they use to differentiate themselves in their new venture. They generally are not experts in the fields of assurance, wealth management, estate planning, tax planning, etc.

And then there’s a business to start, run and grow at pace; dealing with customers, suppliers, staff, regulators, etc. So where do you find the time to do the other ‘stuff’?

Consider, too, that ‘business happens’: markets, litigation, regulation, cash flow, staff changes, etc. Add to this ‘life happens’ – you may become ill, get divorced, emigrate, or any number of other big life changes. How does one earn an income if one can’t work in the business? What happens on exit in terms of extracting the capital value?

  • Assurance: Consider whether or not buy and sell, key man or contingent liability policies have a role in protecting your business interests. Consider, too, if you have the necessary personal insurance policies in place (life, dread disease, disability, etc).
  • Wealth management: As with any employee, are you building up a sensible nest egg for unforeseen cash flow requirements and a long retirement? Do you have a sensible plan and portfolio in place to meet your goals? Or are you in fact using your existing retirement savings and risk losing these?
  • Employee benefits and financial wellness: And what about the people who are helping you build the business? Do you provide them with the right benefits and counsel?
  • Structures: Trusts, estate planning and tax planning are but a few aspects that also need consideration to protect your wealth in the most efficient manner.

None of these challenges are new. The South African financial services industry is mature and innovative in developing appropriate solutions. Good advisors are increasingly competent in understanding the complexity of running a business and one’s personal aspirations. Seek their advice in planning and implementing solutions that are appropriate for you and your business.


  • Separate your business assets from your personal assets.
  • Protect your business assets with appropriate assurance for when ‘business happens’.
  • Invest the wealth from business assets prudently whether for liquidity, future reinvestment or future ventures.
  • Provide meaningful benefits to your employees.
  • Protect your personal wealth with the right assurance for when ‘life happens’.
  • Evaluate the legal structures, estate planning, tax planning and cash flow planning options available to you.
  • Seek professional financial advice from experts in the areas and don’t forget to protect yourself from yourself – the habits of a great entrepreneur aren’t necessarily those of a great investor!

Author: Mike Lledo CA(SA) is Executive Partner at Citadel Wealth Management