‘Tis the season to wrap up loose ends for and take stock of the financial health of your business. Are there any looming “fiscal cliffs” in your business’s near future? Here’s a checklist for taking inventory:
- Do you have sufficient elasticity in your staffing to expand or contract with the vagaries of the economy and related fluctuations in demand for your goods or services? Are there options you should consider for temporary staffing to manage that uncertainty? Or, if you already engage temporary staff, are they properly classified in terms of employment taxes and worker’s compensation coverage?
- If you are a self-employed business owner, have you made the proper tax election for your business to minimize the amount of taxable income you will be required to pay self-employment taxes on? If you haven’t already done so, now would be a good time for a year-end review with your accountant to minimize the likelihood of any surprises when the tax man cometh next spring.
- Speaking of your accountant and the tax man, are you currently taking advantage of all available tax deductions, or are there others you should discuss with your CPA, such as up to a $10,000.00 deduction for startup costs under the Small Business Jobs Act?
- What’s the status of your current lease? Is the base rent due to increase? Are Common Area Maintenance expenses holding the line? Do you need to budget for increased set-asides to cover higher overhead costs? Might now be a good time to renegotiate your lease to take advantage of a possible opportunity to lock in favorable market rates?
- Speaking of increased overhead, has your net income kept pace with increases in your overhead, or are you just working harder to keep others employed or in business? Is it time to re-evaluate your business model?
- Are there any promissory notes that are set to become due and payable in the near term, and are you financially prepared for that hit? Is it time to start shopping for new credit terms?
- How’s that copier lease working out? Are you netting the savings that the sales person promised when s/he talked you into terminating your existing lease in favor of a newer, more cost-effective model? Oh, yeah, did the new copier company make good on its promise to buy you out of that old lease, or have they simply forgotten to put that “check in the mail”?
- Do you have surplus equipment or furnishings that you should get rid of to lighten your physical load, create more space and maybe generate a little extra cash or a tax-deductible donation?
- When is the last time you reviewed key contracts to ensure that you and the other party are both in compliance with the terms and that those terms meet your current business needs? Is it time to renegotiate the deal to ensure that the agreement reflects the current reality for both parties?
- Is your business software up-to-date and, if not, do you have a plan to update it and keep it updated? Is your business’s technology helping to increase your bottom line or has it morphed into a black hole of ever-increasing hardware, software, consulting and down-time costs?
As you prepare to celebrate the pending holidays, give yourself the gift of a healthy future by taking stock of the present.
Molly O’Leary represents business and telecommunications clients throughout Idaho, and is the Managing Principal of BizCounselor@Law, PLLC. In addition, she is a Past President of the Idaho State Bar and a current member of the Statewide Advisory Counsel for the Idaho Small Business Development Center. You may follow her on Twitter: @BizCounselor.