I love January. There is something so invigorating about wiping the slate clean.
I usually take the first few weeks to pick a theme (Joy and Ease this year), set personal and business goals, and figure out what I need to clean up in the New Year. It’s a perfect month to look over things like contracts, insurance coverage, and estate planning documents. You know, all the stuff you put off and then wake up in a cold sweat about at 3 a.m.
Mind you, I’m not suggesting you do everything on your list in January but checking one or two things off every couple of months will make a big difference come next December.
To that end, here are eight things that every business owner should think about early this year.
Estate Planning, please don’t put it off. It’s one of the first questions I ask every business owner when I meet them. You owe it to yourself, your family, and your employees to get it done immediately. You also need to update it every few years and make sure your business documents line up with the plan. I have to do that myself this year.
Have a business and thinking about selling or transitioning it? Make sure you get your “house” in order if you want to maximize the sale price of your business. The best time to start seeking expert help is two to five years in advance of your exit. Don’t put it off another month. Really, there are many great exit planning resources out there.
Remember the minimum wage for employees went up January 1. It’s also a great time to make sure you are fully complying with the paid sick time portion of the Fair Wages and Healthy Family Act, assessing your experience with it, and revisiting your decisions if appropriate.
When was the last time you reviewed your primary customer contracts? If you never have, it’s time. Just because you’ve never had an issue doesn’t mean you should tempt fate. The odds are you will have a dispute with a customer, vendor, or supplier at some point and it’s much better to have strong contracts. I promise it won’t cost as much as you think.
Do you use independent contractors? If so, you must have a contract with them for lots of reasons. You also need to make sure they are actually, legally independent contractors.
Speaking of independent contractors versus employees, make sure you know whether your employees are correctly classified as exempt or non-exempt. If you don’t have position descriptions, you should. This will help in the event of an audit.
The Revised LLC Act goes into effect in September of this year for new businesses and next year (2020) for all businesses. If you don’t have an Operating Agreement, now is the time. If you have an existing operating agreement then, in light of the revised act, it’s probably time to review the provisions - especially if you have more than one member in your LLC.
Finally, more and more of my practice is becoming monthly general counsel services for businesses. It’s a true retainer and a win-win. We assess your needs and then set a monthly fee that works for your business. What I love about the general counsel model is that it allows me to serve as a real advisor and member of the team. Feel free to reach out if you want to know more.
I hope 2019 is everything you wish it to be!