Posts Tagged ‘planning’

The “Needs” Checklist for Small Business Owners

The small business owner is faced with many challenges during these economic times, and it’s important for the owner to “come up for air” and focus on issues that will help guide them on creating a successful business.

The following is a list of certain items the owner should review on a periodic basis to assess their current situation and implement changes if necessary:

  1. Business Profitability Improvement
  • How is business? What keeps you up at night?
  • Do you have a business plan?
  • What are your marketing activities?
  • Do you perform a budget analysis – compare actual vs. budget? Do you have a budget? If you answered “no”…
  • How do you compare to your industry?
  • Do you analyze the Income Statement for profit improvement potential? Consider cutting out some discretionary expense items.  (I wonder if we could get Congress to do the same thing… not likely)
  1. Taxation Planning
  • What are the current results and what are your expectations for year end?
  • What tax planning strategies can we implement for this year?
  • Is there enough cash to pay the tax and implement the tax savings strategies?
  1. Finance
  • Do you have a line of credit?
  • Do you need to increase your line of credit?
  • Do you need new financing? The banks are still being quite stingy with the funds so this could take some work.
  1. Wealth Creation
  • What investments do you have in your portfolio?
  • What is your current net worth?
  • What action needs to be taken to achieve your goals?
  1. Risk Management
  • Do you have a valid will that reflects your current wishes?
  • Do you have a partnership or shareholder agreement?
  • Do you have a buy/sell agreement?
  • Is adequate insurance coverage in place?
  1. Succession Planning
  • When do you want to retire?
  • What is your selling price for the business? You need to be realistic during down economic times; most businesses aren’t worth what they were in 2005.
  • What is the current value of the business?
  • Are you dispensable? While you’d like to say no, when trying to position your business to sell, it’s better if the answer is yes. 

The key is to develop a plan, measure it periodically, and implement changes as necessary.

Planning for our Kids’ Future

As any mom can testify, we often think about our kids’ futures.  While dancing with my baby son a few months ago, I had thoughts of him leaving me one day for another woman on his wedding day.  While his head was comfortably snuggled on my chest as we swayed to the music, I couldn’t help but think of the day that my head will be resting on his chest for the mother-son dance.  Tears anyone? 

I don’t think about his wedding day all the time, but I do think about his future.  What can I do now to prepare him for an unknown yet inevitable future?  No one even knows what the world will look like two years from now, let alone twenty!  What we do know is we can do our best to raise our children to be good citizens, hard workers, and kind men and women.  We can teach them the value of work and financial planning.

We can also begin to build a nest egg to be used to attend college, start a business or start a family; sometimes with pre-tax dollars.

 Here are a few ideas:

  • Purchase long term bonds that mature at college age
  • Buy a rental property that will have cash flow and a potential for high equity value once your kids are adults
  • If you own a company, gift your child money to buy equipment that your company uses and lease it to the company for high rental rates.
  • If your child has earned income, set up an IRA or Roth IRA account and gift them the contribution amounts
  • Set up an Education Savings Account

Of course you should always consult a professional when considering one of these options.  Each case has its own limitation and tax considerations which is too much detail for this conversation.


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