Oftentimes, business growth is held back by a sort of “chicken-or-the-egg” scenario in which the business owner needs to hire or invest in a resource in order to grow, but they can’t afford the investment unless they have grown the business first. Financing can help you jump the chasm of being stuck in that loop.

Two popular financing options are obtaining a business line of credit from a bank and securing a loan. Each has its unique advantages and disadvantages, and choosing the right one depends on various factors, including the nature of your business, your financial health, and your long-term goals. It can get complicated, especially if you’re new to business ownership, but you don’t have to figure it out on your own. Instead, let’s navigate this together, shall we? In a future blog article, we’ll look at another type of business credit, using credit cards and how to do it right so you don’t ruin your credit score in the process - so stay tuned. But, first … 

Rather, the crux lies in identifying a successor who possesses the right qualifications plus the vision and capabilities to steer your company toward continued success. 

During this pivotal decision-making process, it's essential to sidestep these three common pitfalls that often hinder business owners when naming successors, as they can blur objectivity and impede the chosen candidate's ability to effectively assume control of the company.

Let’s dive in.

01 | Overlooking Diverse Leadership Styles

The temptation to seek a successor who mirrors your own thinking and actions can be strong. However, the essence of succession planning lies not in replicating oneself, but rather in identifying an individual poised to build upon your achievements and propel the business forward. 

Working with a tax professional is always the best route to go when making tax decisions for your business, but making sure your tax-filing professional has the most accurate information possible about your business is essential in order for them to provide you with the best possible guidance and file the most accurate return come tax time.

To make sure your tax business tax return goes as smoothly as possible, make sure to avoid these three common employer tax mistakes.

01 | Wage and Hourly Payroll Tax Mistakes

Your business gets to deduct the compensation you pay to employees and contractors. But, minimum wage issues, overtime, holiday pay, and comp hours can complicate your payroll if you have W-2 employees and make your tax filing even more complicated. Plus, miscalculating what you’ve paid your employees, and therefore, how much tax has been paid on their earnings can have legal consequences for your company.

And even more importantly – have you thought about what happens to your loved ones if you’re forced to leave your business unexpectedly because you die or become ill?

Like most entrepreneurs, your business and your family are your greatest loves. Show them just how much you care for them by making sure there’s a plan in place for their care, and the management of your business, when you’re no longer at the helm.

The Business Owner's Dilemma

Picture this: You're lounging on a beach, sipping a colorful drink with an umbrella, and basking in the glory of retirement. Sounds dreamy, right? Now, imagine your business, left to fend for itself like a lost puppy in a rainstorm. Without a clear plan for succession, your business could face uncertain times ahead, and the thought of your hard work going down the drain is anything but relaxing.

Plus, it keeps more money in the family and out of the hands of Uncle Sam.

In return, you get employees who are committed, work well in a team, and are loyal. This might even set the stage for a long-term succession plan for your family business. 

Adding to these advantages, bringing your kids into your business can also lead to some helpful tax savings. Thanks to the Tax Cuts and Jobs Act (TCJA), these tax benefits are now bigger than ever.

However, it's crucial to ensure that if you hire your kids, they actually do real work, and you pay them fair wages. Otherwise, you might draw unwanted attention from the IRS. Some of the benefits of the TCJA will be expiring in 2025, so make sure to take advantage of these benefits this year while you can. I'll provide more details on this below. 

In a world where skepticism and misinformation prevail, nurturing authenticity and reliability in your brand is essential to building and keeping your client base. 

In this blog post, we will delve into effective strategies that will not only build client connections, but also foster trust through the power of your business' branding and communication.

Plus, we’ll explore how living your brand of trust, transparency, and fairness throughout your company’s Legal, Insurance, Financial, and Tax systems will set your company up for success. 

Show Clients You’re Serious By Using Consistent Branding 

To attract and keep clients, they need to trust that your business isn’t just making things up as it goes or running on fumes - that it might close shop in a year or completely change its style as it discovers who it is.

Consider this: the mark of a great leader often lies in their emotional intelligence. Reflect on the leaders you admire, and you'll likely find a common thread—they leave you feeling uplifted and connected. On the flip side, think of those who fall short in the leadership department—they might come off as reactive, inscrutable, distant, or chilly, leaving you with a sense of uncertainty or even fear.

What you're experiencing is the stark contrast between someone with well-integrated emotional intelligence and someone lacking this crucial skill. Elevating your emotional intelligence isn't just a touchy-feely concept; it's a strategic move that can empower you to take risks, champion your ideas persuasively, and trust your instincts even when doubts loom large. 

Failure to invest in your emotional intelligence can be a pricey misstep, leading to financial and legal blunders like seeking advice from the wrong sources, disregarding your gut feelings, or withholding crucial communications from partners, vendors, and team members.

Through the handbook, you get to introduce your team to the company's values and culture, offering a clear understanding of expectations on both ends—what you anticipate from them and what they can anticipate from you.

Each company’s handbook needs to be different depending on the size, structure, and nature of the business, but every handbook should achieve these three things:

01 | Set Expectations, Cultivate Understanding

In any workplace, an employee handbook should nurture the company’s healthy growth. It's not just about laying down rules; it's a means of transparently setting expectations. By clearly defining roles, responsibilities, and the values you hold as a business and as a person, you cultivate a mutual understanding between you and your team. This shared vision becomes the backbone of a positive work culture, where everyone is aligned, motivated, and contributing to the company’s success. 

The key to a successful partnership is getting the support to craft a robust partnership agreement from day one. 

This agreement serves as a framework that ensures all partners are on the same page, which leaves less room for disputes and more room to grow the business. 

While I’ve provided six essential clauses that every partnership agreement must include, here’s a little secret: it’s less about the agreement itself and more about the process of getting to the agreement.

In a future article, I’ll share more about the agreement process, and how to work with your advisor to ensure the agreement process itself protects the future success of your business. 

01 | Decision-Making Protocol

Establish a clear decision-making protocol. Do decisions need to be made using a consensus or a majority vote? What happens if there is a tie or a consensus can’t be reached? Laying out the policy for how decisions for the company are made will help avoid issues and conflicts in the future.

What components of your business worked the best? Which areas need focus or improvement? Are there areas of your business that have been neglected? (Don’t worry, we’ve all been there).

Wherever your business stands as this year comes to a close, the new year is the perfect time to assess ways to improve its processes and set your company up for next-level growth and success in the new year. It all begins by looking at the foundational systems that support your business from the inside out. I call those systems your LIFT systems. 

As your dedicated LIFT Business Advisor, I'm here to guide you through an examination of the Legal, Insurance, Financial, and Tax components of your business and help you build a LIFT Dream Team of trusted experts in these areas who will work together to bring your business into full alignment with your goals and needs.