As we close the door on 2020 and look forward to 2021, I think most business owners that we work with seem to have an outlook of “cautious optimism.” Vaccinations for Covid Virus are beginning, but a delivery of the vaccine to the substantial part of the population of the United States alone will likely take some time before it has a positive impact on the economy. We have a likely inauguration of a new president and new Administration for the Executive Branch of our federal government. What changes will that bring?
As the owner and President of McKenzie Law Associates P.C., for thirty – five years, I have learned that I can gaze into the future, but I can only take action on the areas of my business that I can control. So the questions I ask are: What are the things I can do to make my business stronger, more stable, more profitable and a better place to work ?
To answer these questions, I have developed a 2021 Business Owner Checklist that I will be using this year for my business. I think, as a business lawyer, that this Checklist may have value for other business owners. This checklist focuses on
Four Major Questions:
- How can I improve the Financial strength of my business today?
- What am I doing to protect the assets that my business owns today?
- Are you Buying or Selling?
- What concrete steps can I take this year to make my Business a better place to work for myself, my business partners, and our employees?
Comments on these Questions are set forth below:
I. Improving the Financial Strength of my Business now.
(a) Reduce Debt, If you have a “PPP Loan” begin the process of seeking forgiveness of this loan. If your PPP loan is $50,000 or less your PPP Loan Lender should have already opened its portal for filing your PPP Loan Forgiveness Application Form. If your PPP loan is over $50,000, the Loan Forgiveness process will be more complicated. Either way, enlist your Accountant’s help with this immediately, before he or she begins training and preparation of 2020 Income Tax Returns.
(b) What do you need to do to improve your business cash flow? This will vary depending on your business. Reduce your accounts receivable by being proactive in working with your customers or clients that owe your business money. Focus on accounts receivable that are ninety days or more past due.
(c) What is the Status of your current work load? Do you have enough business now? Are you renewing your contacts with your business referral sources? Do you have Annual contracts with customers that need to be renewed? January is a great time to do this. Take specific steps to promote your business to existing customers as well as new potential customers.
(d) Does your business have access to sufficient capital to support your cash flow for the next six months? Most businesses have a line of credit for this purpose. Is your bank focused on the needs of small business owners? Are the terms of your existing line of credit flexible enough to meet your business needs?
II. Protecting your Business Assets
(a) Is your computer system secure? Do you regularly back up your data to an offsite server? Every business needs a “Tech Person” who maintains your system, reminds you of maintenance or steps needed to improve storage capacity, replace old hardware, and improve the security of your system.
(b) Are you protecting the intellectual property of your business? This is often looked by business owners. Customer lists, supplier lists, financial records, marketing plans, website information and functioning, and customer/client files are all part of the “intellectual property” of your business. Do you have your Key producer employees sign Confidentiality, Non- compete, Non-solicit Agreement? You are not insulting your Key employees when you ask them to sign a confidentiality non- compete Agreement. These agreements have become much more common today. At McKenzie Law Associates, we work with many business owners; who want to implement this important protection for their business.
(c) Does your business have “trade secrets”, that is, computer programs, procedures, product formulas, licenses of inventions, which have substantial monetary value, and consist of private information which is original or not known to the general public? Your business may have this kind very valuable intellectual property may be critical to the success of your business; however you can’t legally protect it as a “trade secret” unless you limit access to this information through password protections, security keys to access certain rooms of your business, or other measures to make this information available only to a small number of Key Employees.
III. Are you Buying or Selling?
Every business owner is either buying or selling his business his interest in his business. Often, this depends on age:
If you are…..
If you are between 25 and 50, you are likely to be ” growing your business by buying new assets in the form of other companies, new partners or investors, machinery, equipment, or marketing investments to increase the size, or capacity of your business.
If you are 50 or over, you are more likely to be “selling your business by developing a strategy to sell your interest in your business either internally to existing employees or to individuals or companies outside of your business.
Whether you are buying or selling your business, you need to be developing a ” plan ” now. Then decide what steps you can take now to implement that plan. If you don’t begin the plan now. You may miss the opportunity to buy that small start- up company that’s beginning to take more markets share in your industry. If you are thinking ahead to retirement, your business may be your largest retirement asset, but if you don’t take concrete steps now, you may end up “dying in the saddle” and leave your family no way to capitalize or the business that you have built for so many years.
At McKenzie Law Associates, we have helped business owners to sell their business to Third Parties as well as Existing Key Employees. We have also helped young business owners buy other companies, add shareholders, and take other actions to Buy or Grow their company.
IV. Action Steps to make sure Business a happier place to work.
- Be clear about your directions and expectation with your employees
- Use Bonuses as an incentives for employees
- Make sure your business is invested in your employees.
- Are you regularly teaching employees new skills ?
- Provide regular, positive encouragements to your employees. When employees do a job well, praise them for it!
At McKenzie Law Associates, we are a family owned law firm that focuses on the needs of small business owners by helping them buy or sell businesses, resolve contract disputes, and helping them protect their business assets through estate planning and probate services.
GIVE US A CALL TODAY – MCKENZIE LAW ASSOCIATES PC – 770-476-9793
OR EMAIL US AT: firstname.lastname@example.org
FIND US AT: Suite 206a, Rogers Bridge Rd., Duluth, Ga. 30097.