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Give your business an annual checkup to keep it healthy and
profitable
Business owners and managers spend most of their time monitoring
operations and dealing with everyday problems. But just as
an annual checkup from your physician helps to monitor and
manage your personal health, an annual checkup can do the same
for your business. The benefits of such a review are holding
your company accountable and evaluating current performance
to better plan and execute future operations. Here are seven
things that you should make time to do every year. These are
important for your longer-term business health and personal
success.
1. Review your business
insurance coverage. Don't just automatically
write a check to renew your insurance policies when they
come due. Instead, you should sit down with your insurance
agent every year. Review your business operations, focusing
on any changes. Discuss types of risk that could arise. Ask
about new developments in business insurance. Use your agent's
expertise to identify risk areas and suggest suitable coverage.
2. Review your business
tax strategy. Consider adjusting taxable earnings
for the year, perhaps by accelerating expenses or delaying
income at year-end. If you're a cash-basis taxpayer,
you could boost 2007 deductions by declaring and paying bonuses
in December rather than in early January. Also, you may be
able to defer invoicing or make early purchases to reduce
your 2007 tax bill.
Look into the "Section 179" rule that allows you
to take an immediate tax deduction for most purchases of business
furniture and equipment. By deducting the full cost immediately
instead of depreciating it over several years, you'll
cut this year's tax bill. For 2007, you can deduct up
to $125,000 of qualifying purchases, subject to limits.
As your business grows, it's always good to make sure
you're using the most appropriate form of business — whether
it's sole proprietor, S or C corporation, LLC, or partnership.
Look for other tax breaks, such as specialized tax credits,
that you might not be using to full advantage.
3. Get a pulse on your
customers. An annual customer satisfaction survey
is a great way to assess performance, obtain insight on potential
new products or services, and to let your customers know
how much you value their business.
4. Check the effectiveness
of your marketing. Are your current methods and
channels working well, or are you simply doing what you've
always done?
5. Update succession
planning for your business. Review your succession
planning annually. You should have a specific plan for each
key manager position, including yourself. Be prepared for
a short-term absence or a permanent vacancy. Your plan might
mean promoting from within or recruiting externally. An up-to-date
plan can be invaluable if you have an unexpected vacancy.
6. Review your business
banking relationships. Annually, you should go over
your cash balances and banking relationships with your controller
or CFO. Then both of you should meet with your banker. Ask
about new products or services that could help your company.
Address any service concerns or problems you might have had.
Look for ways to reduce idle cash, boost interest earned,
and improve cash flows.
7. Review and update
your personal estate planning. If you're a
business owner, your company is likely to be a significant
part of your estate. A good estate plan is essential if you
hope to pass the business on to your heirs. Your company,
your personal circumstances, and the tax laws are continually
changing. You should take time each year to make sure your
plans are current.
If you are serious about improving your business, consider
a yearly assessment of your operation. For any assistance you
need, give us a call.
©copyright
2007
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