Posts Tagged ‘risk management’

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.

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