Year-End Planning: 3 Key Areas to Consider
The end of the year is a busy time for business owners. Not only are they revisiting their financials to maximize savings, they are also measuring that year’s success, exploring new opportunities to grow their business, and making plans for the future of their business and estate. Ensuring that business owners start the New Year strong and stay on track to accomplish their goals can be incredibly overwhelming during the holiday season, and more often than not, this planning is pushed aside to deal with at a later time. However, this isn’t doing themselves or their business any favors.
What can business owners do now to get closer to their goals? Snyder Law suggests looking at these three areas as the year comes to a close.
- Business Succession Planning
What do you want your company to accomplish now and in the future?
It’s never too early for business owners and CEOs to start answering this question; especially if they’re seeking the smoothest possible transition for their business’s operations and for themselves.
After years of building a successful business, there is much for the owner to consider as they prepare to move beyond their business. Whether or not they are ready to exit the business in the coming year, it’s important for them to begin thinking about a succession plan that will personally work for them. A truly successful succession plan navigates the financial side as well as the emotional side; while simultaneously achieving the owner’s goals and objectives.
Business succession doesn’t always mean retirement. A business owner may want to pass a single product line or a division of their business to a trusted family member or colleague. Whether a business owner wants to sell their business or divide responsibilities among family members in phases, it’s important to form a plan to create an effective and smooth transition.
- Estate Planning
Do you know who will inherit your role and responsibilities?
A company’s corporate records should include a plan in the event that a key person becomes unable to fulfill their role due to injury, incapacity, or death. Limited Liability Companies should have a clause in their Operating Agreement regarding membership interests in the event a Member passes; and Corporations are best served when they have stock beneficiaries noted in the corporate records. A sudden death of a business owner or key person can send not only the family into disarray, but can have terrible consequences for the company in lost revenues, internal disruption, or lawsuits around ownership interests.
The same goes for personal affairs. If the family member earning the main income passes away, who will take their place? It often helps to frame these thoughts in terms of helping the remaining family members prepare for new roles and responsibilities. Additionally, there could be tax burdens associated with inheriting business ownership, stock, and other possessions.
Without estate planning, a person cannot choose who will inherit their possessions and valuables – the state does. Settling an estate’s affairs can have a long-lasting and costly impact on loved ones if a person chooses to forego formal estate planning. Evaluating assets, drafting wills or trusts, settling estate taxes, assigning medical powers of attorney or legal guardians can sound incredibly complicated and overwhelming—but it doesn’t have to be. Although people would rather avoid these questions as long as possible, choosing to ignore them leads to bigger problems later on, primarily for the person’s loved ones.
It’s not too soon to start planning for the unexpected or the inevitable. Taking the time to sit down and have a conversation about these matters ensures families have a say in how their assest are distributed. Planning ahead protects loved ones from undue financial burden and helps them feel confident about the future. Everyone can then rest easy knowing their family (or favorite charities) will be taken care of.
- Buy/Sell Opportunities
Are you missing opportunities for growth?
Taking time to evaluate potential opportunities is critical for a company’s success and growth. From finding profitable ventures to grow the business, to identifying measures to defend the business from risks, having a trusted resource to guide them through these matters makes it far less complicated and even enjoyable.
Selling a business can be an exciting process. Often, success depends on a multitude of small factors; from the timing of the sale, the success of current operations, to the business’s corporate structure. Having a legal partner navigate them through the nuances provides support throughout the process, while managing the strategy for the most profit.
On the other hand, a business owner might be interested in launching a new product line, service area, or business in a new industry; and acquiring an existing business can help them hit the ground running in terms of cash flow and profit. Having a trusted source that monitors their interests during the negotiation process helps them secure the best possible deal to begin their venture successfully.
Next Steps
Need a little more help? If you’re interested in reviewing your year-end plan and discussing these topics further, set up a 15-minute meeting with Snyder Law to discuss your business’s needs and to find the best options for your business’s success. Click here for a one-time meeting. You’ll receive our Estate Plan Questionnaire to prepare you for the call, and you’ll have a firm idea of which direction to go by the end of the meeting.
More interested in a DIY option? We created a comprehensive Estate Plan Questionnaire to point you in the right direction. The Estate Plan Questionnaire takes you from where you are to where you want to be in just a few simple steps. And it’s only $14.97. Request yours here.
If you would like to learn more about any of the topics mentioned here, please call or text 484-801-0021 or reach out to Cassandra Ortner at cassandra.ortner@peytonlaw.com. We proudly support the nation’s business owners.
*Janelle Peyton is the CEO and Managing Partner of Peyton Law, a leading boutique law firm designed to provide the highest quality branding, business, and legal services to companies via quarterly subscription called Strategic Legal Solution. Peyton Law offers brand building strategies through corporate and intellectual property law, including business entity formation, buy+sell, contracts, joint ventures, trademarks, patents, licensing, and other growth-related transactions.
