Inadequate Planning and Procrastination…Two of the Main reasons Businesses Fail

1. I KNOW WHAT MY BUSINESS IS WORTH!

As business owners, we all have a sense of what our business is worth…right? There are many problems that can occur if we make random assumptions about the value of our company; especially when it relates to our succession/exit plan agreement. Should this matter require professional attention and periodic review?

2. I’M TOO BUSY RUNNING THE COMPANY

Running a successful business is time consuming – Estate Analysis; who has time for that? Many owners think the reduction in the Federal estate tax code means they can avoid planning. In reality, the actual taxes due at the death of an owner are only a small piece of the problem. The larger issue is Business Succession and the need to identify the intentions for ownership, transition and leadership in the company. Critical situations can be avoided by simple strategic planning.

3. THAT’LL NEVER HAPPEN TO ME

As we do business with other companies and industries we realize the importance of human capital and the costs associated with the lack of quality people. Similarly, the disability of owners, key executives and key employees who make our business happen can have a significantly negative effect on the ongoing operation and growth of the company. For instance, in a small to mid-sized firm, the owner typically provides the greatest leadership, vision and, in many cases, sales, for the company. Those valuable business relationships can also be compromised if the owner were disabled for an extended period of time.

4. THERE’S PLENTY OF TIME FOR THAT

We always think there will be plenty of time for business planning. After all, we’re running a business, which demands our constant attention. However, not planning for succession and retirement (especially in a family-owned business) is one of the primary reasons why businesses fail to continue after the founder leaves the company.

5. MY BUSINESS IS MY RETIREMENT

We all reinvest in our growing businesses. And we dream of the day that all of this hard work will assure us a comfortable retirement. But in this new, global economy, there is no way to anticipate outside factors quickly eroding the value of our business.

6. YOU CAN’T BEAT UNCLE SAM

As business owners, we probably pay more taxes than we care to remember. Plus, the rules regarding exemptions, regulations, fees and taxes seem to change endlessly. But with the changing tax environment comes opportunities to reduce taxes, if you know where to look. But with early planning, you can be ready for tax season

If there are some gaps or mistakes in your planning when would you want to know? Now or later?

Doesn’t it make sense to spend time making sure that your plans and your dreams are the same?

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