Today’s business owners are much preoccupied with running the day-to-day operations for 2017 and beyond. They need plenty of encouragement to step aside, take a few moments and plan their tomorrows.
Owners know that curve balls can suddenly appear practically every day. A continuous challenge for many is trying to improve their business prospects.
Business plans can easily veer off course, often beyond one’s control. I suggest that a refresh of your business elements delivers good value.
First, mull over what you would like to achieve with your business. Then brainstorm with some solid ideas.
I call this my “AAA” approach. That is: Assess, Analyze, and Adopt like this:
- Assess business goals.
- Analyze action plans.
- Adopt sensible changes.
Businesses who employ up to 50 people are the backbone of a thriving economy. It’s prudent for business planning matters to be prioritized for periodic reviews.
Arranging a meeting to brainstorm with your professional advisors is productive and insightful. Say the accountant, lawyer and money manager.
Contemplating business matters is best done in a coordinated way. That is, review all the implications at once and design one comprehensive sensible plan.
I highlight seven important planning priorities for business owners to consider in 2017:
1. Business structure
Perhaps, your business structure that served for years could use a tweak or fresh face. It may now be a partnership, an incorporated company, or a set of holding companies. First evaluate valid business reasons for the current structure. Then examine if you can further benefit by modifying the setup.
2. Owner remuneration
Review the composition of your 2017 owner remuneration. Revisit your mix of salary, management fees, bonus and dividends best applicable to you. Maximum 2018 RRSP of $26,230 requires “earned income” of $145,700 to be paid in 2017. Some family members may be able to receive dividends while paying little income tax.
3. Business continuance
The continued operation of the business is also neglected too frequently. Specifically, who will take the helm if you become disabled, ill or deceased. You want someone qualified to step in your shoes temporarily, perhaps longer. In fortunate situations, there may be a family member or someone in the organization.
4. Family trusts
Many business owners have various family trusts that have been set up over the years. Some of the rules have changed some trusts are approaching their 21-year life. Take this opportunity to revisit your family’s planning needs and a trust benefits. Those who don’t have a family trust can assess whether it makes sense to establish one.
5. Lifetime capital gain exemption
A lifetime capital gain exemption nearing $835,700 per spouse is available during 2017. It exempts gains from the sale of qualifying small businesses, farm property and fishing assets. Review the eligibility steps for the special gain if you own such assets. Usage of the full exemption implies a tax saving over $190,000 per spouse across Canada.
6. Disaster recovery
Plan for the day you require alternative business premises in very short order. Start by backing up your key computer data and store it off-site on a regular basis. Consider how reliable your supply chain can be in an emergency. Ensure that all your key people are on board.
7. Find a business mentor
Find a mentor with a broad, thoughtful perspective for your business. A person who can filter different points of view with logical reasoning. Someone who relates to what you are trying to achieve. One with imagination who can be a terrific sounding board.
Implementing my planning priorities helps achieve your family business goals. Always check that all your professional advisors are on the same page as you. There is only one client.