New Year's Resolutions
by Peter Mallouk
Most business owners start the new year hitting the ground running. For most, it would be a great use of their time to spend a few hours addressing some key issues that relate to their business.
Succession Planning
If you were to be hit by a milk truck tomorrow, what would happen to your business? What would your customers do? What would be the con-sequences to your employees, spouse and loved ones? Many business owners don’t have a succession plan.
While succession plans come in all different shapes and sizes, a typical plan is fairly straight-forward and can be simple and inexpensive to establish. For example, a business with two owners may have a simple agreement saying that if either dies, the survivor will pay a specified amount for the deceased partner’s shares. Under this scenario, everyone gets what he or she wants. The deceased partner extracts full value from one of his or her largest assets for his or her family, the surviving spouse gets cash rather than having to deal with a business, and the surviving partner has the business without having to deal with surviving family members.
An employee benefit is only perceived as a benefit if employees want it and understand it. Customize your benefit lineup to your workforce. While the more important benefits to many employees are health insurance followed by a retirement plan, the balance of benefits and their perceived value varies widely depending on the profile of the workforce. If 90% of your workforce is young, long term care insurance won’t be perceived as a benefit.
Once you have a benefit line up that is appropriate for your workforce, make sure your advisors communicate the benefit and how it works to the employees. There are numerous studies proving that participation in 401(k) plans goes up substantially if group education is provided at least once per year. It’s simple—if employees understand ‘what’s in it for them’, whether it’s a tax break, ‘free money’ from an employer match, or a secure retirement, they are more likely to participate.
Many businesses have accounts with banks serving as security on credit lines or loans. Many times this money is left in cash or CDs. This often means having considerable assets tied up with low yields for years. Talk to your banker about your investment options. Often, the bank will allow you to invest the money in an approved portfolio mix of stocks and bonds that should greatly increase your return over the long run.
Many business owners overlook deductions available to them. For example, long term care insurance premiums are 100% deductible to owners of ‘C’ corporations, yet many of these business owners continue to pay premiums with after tax dollars. Take the time to talk with your accountant about your various expenses and learn the deductions available to you as a business owner.
Make Time for Your Personal Plan
While your business is an important asset, it is important to look at your personal overall plan at least once per year. Many business owners have so much of their net worth tied up in their business that careful planning is necessary to develop a solid, overall portfolio. A good wealth manager can help you best position your business for legal protection and to protect your current income, as well as how to best position your business to meet your current and future goals.
These are simple steps that only take a few hours to implement. As a small business owner you know that many employees rely on you for their financial security. Take a little time to make sure you are maximizing what you can for them while improving your financial security as well. 
Peter Mallouk, J.D., MBA, CFP is Principal of Creative Planning Private Wealth Management.
P | 913.338.2727
E | Mallouk@thinkingbeyond.com