Now that the holidays have passed and 2016 has begun, ‘tis the season for New Year’s resolutions. Personal resolutions are common. People pledge to exercise more, or to quit a bad habit.
Usually, New Year’s resolutions are made with the goal of improving a person’s life in some way.
What about your business?
The milestone of a new year is a great time to set resolutions to improve your business as well. Here are my top four New Year’s resolutions for small businesses:
1. Create a one-year plan and a five-year plan.
Knowing where you’re going is the best way to get there. With a one-year plan, you can set attainable goals for your business; whether that is in operation, productivity, administration or all of the above.
However, a one-year plan may be short-sighted when taken in the context of the long-term success of your business. For that reason, it is equally as important to have a five-year plan as a one-year plan.
If your five-year plan includes an aggressive pattern of growth, your one-year plan might read very differently if your five-year plan includes retirement or an exit strategy.
2. Get your corporate house in order.
Your business’s entity structure and ownership organization is critical to your tax situation, your liability protection, your income and many other elements of your business and personal condition.
If you have recently neglected your corporate entity structure or the agreements among yourself, business partners, investors and debt partners, now is the time to address the situation.
This is critically important to protecting your personal assets from liabilities of the business, to knowing how much growth in the business you actually own, or to having predictability for worst-case-scenario situations such as death, disability or divorce. Proper maintenance and structuring of your business entity has an impact on virtually every element of your business.
3. Hire a tax professional.
The U.S. tax code is very complex and has many industry-specific rules that may be to your benefit or to your detriment. Unless your business is tax preparation, you almost certainly do not know, nor do you have the time to learn, all of these rules.
If you could be saving thousands of dollars, wouldn’t you like to know? If you owe thousands of dollars, it’s better to know now than when facing an audit.
4. Adopt an employee handbook.
If your business has grown organically, from its start with one or two people to today at six, 10 or 50 employees, you may not have an employee handbook.
Employers face a lot of risk in having employees, and having an employee handbook can dramatically reduce that risk. If there are pre-established policies and standards to which all employees are held, employer risk is reduced.
Moreover, employees appreciate having a resource to verify their questions and concerns. This is a small cost that may save you big in the future.
Sit down this new year and think about your business, what your goals are and what risks you can help to reduce. Start a new habit or kick an old one, and have a prosperous 2016.