The Top 3 New Year’s Resolutions for the Long-Term Success of your Small Business

As a small business owner, how many times have you set lofty New Year’s resolutions for your business that never amounted to anything? This year, you can set three achievable resolutions that are simple to accomplish yet stay focused on the long-term success of your business. These resolutions will finally address those lingering tax savings, succession planning, and estate planning issues that you have put off for too long.  Accomplishing these resolutions will affect your bottom line and give you peace of mind for years to come.

Resolution #1: Implement Simple Choice of Entity Strategies for Tax Savings in 2017

Do you know if your business is taxed as a sole proprietorship, partnership, C-Corp, or S-Corp?  Do you know what tax bracket you are in? Did you know that if you are single, your business is a sole proprietorship, and you make between $37,650-$91,150, or if married, and you make between $75,300-$151,900, that your taxable rate on your business profits is 46%?  A business’ choice of tax entity can have major tax implications, but many small business owners are unaware that such issues exist. As a result, many small businesses are often taxed as the wrong type of entity and they end up paying too much in taxes.  This year, meet with your attorney and CPA to review your choice of entity options and see if you can save taxes by being an S-Corp.

Resolution #2: Establish a Succession Plan for Your Business that gives you Peace of Mind

A recent study found that only 30% of family-owned businesses survive the 2nd generation.  Many advisers believe this statistic is due to the fact that business owners have not established a plan for succession.  Have you ever thought about what will happen to your business if you get sick, become disabled, or pass away?  If you have a business partner and they get sick, become disabled, or pass away, do you really want to run the business with your partner’s spouse or children?  Do your key employees know your daily, weekly, and monthly responsibilities to keep the business afloat if tragedy strikes?  Most small business owners often fail to discuss these business succession issues with their partners and key employees.  They also fail to implement an Operating Agreement or Buy/Sell Agreement that identifies what happens to the business in the event of disability or death.  That is why 70% of businesses don’t make it past the 2nd generation. This year, schedule a time with your partners, key employees, CPA, and attorney to discuss and implement a successful succession plan.

Resolution #3: Avoid the Top Mistakes in Estate Planning and Plan for Potential Nursing Home Care for Your Aging Parents

There are many mistakes you want to avoid when considering your estate plan.  For example, statistics show that half of Americans die without a Will – creating headaches and uncertainty for their loved ones.  Many more Americans become sick or disabled and don’t have Powers of Attorney in place, forcing their families to go through the grueling guardianship process to pay bills and make medical decisions.  Not utilizing a trust in your estate plan can also create problems, especially in blended family situations.  Without a trust in place, the surviving spouse in a blended family could potentially disinherit the deceased spouse’s children and leave them nothing.

Additionally, don’t ignore the fact that your aging parents might need nursing home care in the future.  If you delay your parents’ long-term care and elder law financial planning for too long, your parents will be required to spend all of their hard-earned assets on their nursing home care before they qualify for government assistance.  However, if you and your parents timely set up the right kind of financial plan, your parents can successfully protect their assets from the nursing home, and still qualify for government assistance.  This year, meet with your estate planning attorney and CPA to review your estate plan and to discuss potential Medicaid planning options for your aging parents that will give you peace of mind.

These three simple resolutions for your small business will be discussed in further detail at the 2017 Ultimate Workshop – Tax, Succession, and Estate Planning for Business Owners on February 2, 2017 at the Northern Kentucky Chamber of Commerce.  At this free interactive workshop, Bill Hesch and Amy Pennekamp will discuss relevant tax, succession, and estate planning issues that are often overlooked by small business owners and their attorney, CPA, and financial advisors. Those in attendance are eligible for a free one hour consultation from Bill. Ohio Attorneys and CPAs will receive 2.5 hours of continuing education credit.  For more information or to register for this year’s Ultimate Workshop, please click here or call Bill at (513) 509-7829.

Bill Hesch is a CPA, PFS (Personal Financial Specialist), and attorney licensed in Ohio and Kentucky who helps clients with their financial and estate planning.  He also practices elder law, corporate law, Medicaid planning, tax law, and probate in the Greater Cincinnati and Northern Kentucky areas.  His practice area includes Hamilton County, Butler County, Warren County, and Clermont County in Ohio, and Campbell County, Kenton County, and Boone County in Kentucky.

(Legal Disclaimer:  Bill Hesch submits this blog to provide general information about the firm and its services.  Information in this blog is not intended as legal advice, and any person receiving information on this page should not act on it without consulting professional legal counsel.  While at times Bill Hesch may render an opinion, Bill Hesch does not offer legal advice through this blog.  Bill Hesch does not enter into an attorney-client relationship with any online reader via online contact.)