Hold That Bottom Line The Big Ten of Business

Are you a business owner? Like many in the Greater Tampa Bay Area, you probably have a list of concerns about the health, wealth, and sustainability of your business. As the principal or owner, you are in a unique position of control, and in turn, a far more vulnerable role – both financially and legally – than any other individual within the company. Without a clear, focused plan to manage what bumps in the road may appear in the future, you could find yourself in deep regret, or worse, financial ruin. Planning ahead is essential to protecting the success of the business you have worked so hard to build.

Putting off until Tomorrow, What Should be Done Today

Although it may be obvious that planning is critical, you would be surprised how frequently business owners avoid this process. Lack of knowledge or awareness is rarely the problem. Procrastination, on the other hand, is a familiar culprit. As the owner of a growing enterprise, your time is valuable and your attention is focused on the pressing issues of today – be they employment-related matters, solidifying partnerships, growing your customer base, and so on. You are not alone. While many business owners excel in certain aspects of their businesses, so too do they share in common weaknesses and mistakes.

Top Ten Mistakes Business Owners Make

Business owners are decisive people. They need to be to survive in today’s highly competitive, fast-paced, and even volatile, marketplace. Knowing what mistakes are most often made may provide the specificity you, as a business owner, need to close in and target these areas to better prepare for the future.

Mistake #1: No Succession Planning.

What will happen to the business when you, the business owner, are no longer around? This can be devastating for “founder-dependent” businesses, and becomes an issue upon either your disability or death. Will your business end up in the hands of those you want?

Mistake #2: Failure to Protect Intellectual Property.

Do you have legal protections in place to guard your intellectual property, which is vitally important to the value of your business? If you own a professional services company, your services and processes would not be as effective in creating market advantage if revealed to your direct competitors. By not protecting that value, you may be limiting your business’s full potential.

Mistake #3: Failure to Do Asset Protection

What happens when the business owner does not have asset protection? Do you keep your corporate minute book up-to-date to ensure your corporate shield is sound? Failing to do so means you could be sacrificing a whole lot more than just the business itself should you ever be sued.

Mistake #4: Failure to Do Financial Planning

What happens when you do not have a financial plan? Your business may be your most valuable asset, but it is not the only asset requiring financial attention. Strategizing a plan that integrates all of your assets will enhance the overall level of protection available to you.

Mistake #5: Failure to Do Estate Planning

What happens when you do not have an estate plan? Businesses are unique assets requiring unique treatment. Simple wills or trusts will not provide the sophisticated and comprehensive planning you need to ensure both you and your family are provided for.

Mistake #6: Complaining to Children and Key Employees about the Business

What is the harm? Many of you may do this without realizing the detriments of sharing personal gripes or issues with those who you may want to take over the business in the future.

Mistake #7: Not Using the Advisory Team as Advisors

What happens when you do not use the collective expertise of your advisory team? This may include your attorney, CPA, financial advisors, partners and executives, and others. Several experienced heads working together are better than one.

Mistake #8: Not Grooming and Keeping Key Employees

What happens when you do not retain your best employees? Your business cannot thrive without the help of your employees. It is important to have a growth plan to ensure you retain the best talent among your employee pool.

Mistake #9: Not Having an Exit Strategy

What happens when you want to sell your business? Have you thought about when and how you would want to sell your business? Without an understanding of the value of your business and a taxation strategy in place, exiting the business may become a very complicated matter. You want to be able to do it well.

Mistake #10: Not Having a Strategic Plan

What happens when you do not take the time to recharge and think strategically about the future path and growth of your business? The important thing here is to be proactive rather than reactive. Procrastination may give you an easy out, but you are only delaying what is fundamental. Take the time to work on your business, not in your business.

Knowing what areas many business owners fail in, you may have recognized one, two, or all ten mistakes of your own. Take stock of how well you have planned (if at all) in each of the above areas in your own business. The key is to take initiative and do something about it NOW!

About the Author

For more information about our firm, visit www.covertlaw.com or contact us at (727) 449-8200. To discuss our feature Your CorporateCounsel Advantage program and how it may help protect you and your business, please contact Neil Covert at ncovert@covertlaw.com or H. Michelle Yang at myang@covertlaw.com.