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Six Questions For A Clear-Eyed Look At Your Business (Part 1)

I have some questions for you today.

Running a business effectively, seeing it grow (or shrink), can be a time-consuming process, so I don’t blame you for little mistakes you may have made along the way.

But mistakes made out of improper planning — well, I can’t let those happen to you and sit idly by.

So, in that spirit, and as we launch into 2015, I’ve identified six major mistakes made by local business owners … and I’d like you to read the list (starting with the first three this week), thoughtfully consider the questions I’m asking, and send me an email with YOUR answers.

You don’t have to email, of course … but please do consider these six issues as you work through growing your business….

Since we mainly work with business tax clients, some of these issues are things which I and my firm do not handle, which is why, if necessary, I will gladly recommend to you someone who can assist you with them — and do it well.

But regardless, you should take this chance to look these over … and, further, to review the little treat I left for you at the end.

Six Questions For A Clear-Eyed Look At Your Business (Part 1)
“A business absolutely devoted to service will have only one worry about profits. They will be embarrassingly large.” – Henry Ford

When you’ve seen the “unexpected” strike so many businesses over the years (as I have), you tend to see certain optimistic New Year’s projections made by entrepreneurs with a bit of a jaundiced eye.

I’d hate to see you get burned.

Which is why I’m about to raise some issues to you, and ask you some questions. It’s a bit of a different approach than I normally take in my blog, but if you take it seriously … it can be a transformative process.

Take a look at each of these questions, and if you are troubled by any of your answers — send me an email … and again, if it’s not something we’re equipped to handle, we can equip you with a good advisor.

#1: Is the value of your business firmly established?
Questions to consider
* Have I ever had my business value appraised by an outside party?
* Do I have a formal buy/sell agreement in place?
* Is my buy/sell agreement funded?
* Does my buy/sell agreement adequately protect my heirs, my business, and my partners?
* Has this agreement been reviewed in the last 3 years?

If you have any plans to someday extricate yourself from your business (and you should ALWAYS consider your exit strategy), these are critical questions.

#2: Is there an emergency plan?
Questions to consider
* Do I have a will, and is it up to date with my business wishes?
* Do I have a plan to retain key employees if something were to happen to me?
* Are my assets protected from potential litigation?
* Have I identified and written down my trusted advisors?

Unless you plan to forever cheat death, a business owner would be foolish to not prepare for that event.

#3: What is to happen next?
Questions to consider
* Do I have a formal succession plan prepared and on file?
* Does my succession plan have a provision for disability?
* Have I involved both family members AND key employees in my succession planning?
* Do I have a disability buy-sell, or overhead expense coverage?
* Do I have contribution protection for my retirement if I were to become disabled?

Again, these eventualities always seem remote on the front end … but if your answer is “no” to more than a couple of the above questions, it would be a good idea to get in contact with someone competent to help you fix it.

I’ll be back next week with mistakes 4, 5 and 6.

Feel very free forward this article to a Waukesha County business associate or client you know who could benefit from our assistance — or simply send them our way? While these particular articles usually relate to business strategy, as you know, we specialize in business tax preparation and planning (for Waukesha County business owners, as well as families). And we always make room for referrals from trusted sources like you.

Warmly (and until next week),

Dale Hammernik
(414) 545-1890

Hammernik & Associates