You are a small business owner. Business is doing well. Life is rolling along. Your hopes, dreams and plans are coming to fruition. Then suddenly __________. Let’s talk about future proofing your business. Let me fill in the blank with a few scenarios that I have experienced first-hand.
I’m not going to lie. This subject is BORING!!! But put on your big girl and big boy pants and read on because what I am talking about is almost as certain as death and taxes which means it is IMPORTANT!
Do you have a continuation plan in place for your business? Don’t get caught without one because, unfortunately, it won’t be you that suffers. Instead it will be your loved ones that are left behind to see your hard work fall apart or your employees lose their jobs. I’ve seen this before and it was painful to watch. It is never too early to start thinking about what you want to happen with your business when you are ready to retire or in the event of your death. There are strategies you can implement to ensure that your loved ones are compensated for your business after your death. Many partnerships have buyout agreements that spell out what happens when a partner leaves the business. You could consider partnering with a separate but similar firm to cover certain contingencies. The bottom line is that you should take some time to reflect on what you would want, discuss it with your loved ones and consult with a business law attorney to create a strategy.
Do you have processes in place to protect your business from embezzlement? I think it goes without saying (but I’m saying it anyway) that it is no fun when you are a victim of fraud, embezzlement or identity theft. Unless your business has been a target before, I bet you would be skeptical if I recommended adding processes to prevent employee theft. These are some phrases I have heard, “she/he would never do that,” “they’ve worked here forever,” “I’m good, I’ve got it covered.” But the tune changes once you’ve been a victim. Employee theft occurs because processes have not been put in place to track the flow of the funds. Reconciliations do not only need to be performed on your bank accounts but also your point of sale system, merchant accounts, credit card accounts and petty cash accounts. There may be other systems you have in place that need to be monitored. If you are watching carefully, money doesn’t lie.
Are you familiar with the regulations or changes in trends for your business? It’s important to pay attention and stay familiar with what’s happening in your industry. For example, the changes in the healthcare industry have prompted an expansion of Accountable Care Organizations and Concierge practices all in response to recent changes. Many doctors began strategizing well in advance of the Affordable Care Act because they saw changes coming down the pipeline. Is your industry heavily regulated such that a change in the law could have a significant impact on your business? The vape industry is an example of that. What is your contingency plan should that happen? What about market changes? Many people in the construction industry have a whole new perspective since the market crashed in 2008. And last but not least, is your Accountant aware of the changes happening now and possibly down the road in cloud accounting and artificial intelligence?
You made it through the article and hopefully you are better for it. Now put that strategy session down on your calendar. There will come a day in the future when you will be glad you did!