My Small Business Health Quiz (Part 1)

"You have brains in your head. You have feet in your shoes. You can steer yourself any direction you choose." - Dr. Seuss

The 'Small Business Health Quiz' is designed to help you evaluate the underlying foundations of your business moving forward. Many of our clients have already addressed (at least some of) these issues, and we believe it's crucial for all small business owners to do the same.

These questions might raise a few concerns, and that's fine -- it's what we're here for. Alongside establishing clear measurables for success (Key Performance Indicators, KPIs), these are the things that effectively growing small businesses need to get a handle on, regardless of their tax situation.

I share these questions occasionally with my people simply because it's good practice to continuously revisit them and ensure we're headed in the right direction.

Further, as a business owner, you must take a REGULAR, clear-eyed look at your business's underlying legal and financial foundations.

This is the perfect time as we all pull our tax documentation together.

This is why I will raise some issues and ask you questions. It's a bit of a different approach than I usually take in my Strategy Notes, but it can be a transformative process if you take it seriously.

Behm's Small Business Health Quiz #1 of 2

#1: Is the value of your business firmly established?

Questions to consider:

• Have I ever had my business value appraised by an outside party?
• Do I have a formal buy/sell agreement in place?
• Is my buy/sell agreement funded?
• Does my buy/sell agreement protect my heirs, business, and partners?
• Has this agreement been reviewed in the last 3 years?

These are critical questions if you plan to extricate yourself from your business someday (and you should ALWAYS consider your exit strategy).

#2: Is there an emergency plan?

Questions to consider:

• Do I have a will, and is it up to date with my business wishes?
• Do I plan to retain key employees if something happens to me?
• Are my assets protected from potential litigation?
• Have I identified and written down my trusted advisers?

Unless you plan to cheat death forever, a business owner would be foolish not to prepare for that event.

#3: What happens next?

Questions to consider:

• Do I have a formal succession plan prepared and on file?
• Does my succession plan have a disability provision?
• Have I involved family members AND key employees in my succession planning?
• Do I have a disability buy-sell or overhead expense coverage?
• Do I have contribution protection for my retirement if I become disabled?

Again, these eventualities always seem remote on the front end ... but if your answer is "no" to more than a couple of the above questions, it would be a good idea to contact someone competent to help you fix it.

I'll be back next week with a few more questions for you...

I'm grateful for our chance to serve you and your business, through these blog posts. We are dedicated to its success in every measure.

Remember, in the business world, it's essential to 'BE THE ROAR not the echo® '. This means standing out, being bold, and making your mark rather than following the crowd. It's a reminder to always strive for excellence in your business practices.

Feel free to forward this article to a business associate or client you know who could benefit from our assistance. While these particular articles usually relate to business strategy, as you know, we specialize in tax preparation and planning for families and business owners.

Warmly, Janet, The Tax Wizard