Naughty or nice? Top 3 gift ideas for your business.
Entrepreneurs: here are my top 3 gift ideas for your business
Are you all done with your gift shopping early this year or are you still planning on braving the real or virtual crowds to make sure you've got everyone covered?
Either way, as an entrepreneur, don't forget to take care of your baby (I mean your business)!
Whether business has been naughty or nice to you this year, the end of the year is a great time to do a legal checkup and make sure that your business is well equipped to succeed in the new year.
Here are three gifts you should consider giving your business this year. And none of them involve canned ham or fruitcake!
The gift of good insurance
Good insurance is a great gift idea for your business.
In addition to good business practices and the right business structure, good insurance is the third layer of my recommended "three-layer approach" to protecting yourself and your business from liability. The problem is that insurance policies vary widely (you'd be surprised at what some of them exclude) and the possible risks that face your business seem to be ever-expanding.
The solution? Find a good insurance advisor who knows business and can help you understand how well the risks you face align with the policies you carry. I'm not talking about the average insurance agent who will be happy to just sell you an off-the-shelf business owner's policy (or they are often called a "BOP") without bothering to get to know your business either. You need an advisor who understands your business and who ideally has access to multiple insurance companies (this will often mean finding an insurance broker instead of just an agent) and who can not only advise you what you need, but shop around to find you the best deal.
As an example, one of the top risks facing small businesses these days is cyber-risk (that is, the risk of loss to your data or your customer data from a hacker who breaks into your network). You'd be surprised by how many insurance policies still don't cover this risk.
The gift of lower taxes
Who can't use lower taxes?
Certainly your business can!
Now's a great time to make sure that you're taking advantage of all the tax breaks that your business can legally take.
While this can be the topic of, not just an entire blog, but a long blog series, here are a couple of tax breaks that you should make sure your business takes advantage of:
- S-corporation taxation status. Is your business making well above average income in your industry? If so, you can probably save money in payroll-related taxes by choosing to have your business taxed as an s-corporation. Need more information on how this might apply to your business? I'd be happy to offer you a free consultation to see if this is right for your business.
- Home office deduction. If you have an office at home that you dedicate to your business, this is a must. The IRS has even simplified things and created a simple formula that you can use that is based just on the square-footage of your home office (without having to keep records about utilities etc used for your office). Just make sure that the office is used exclusively for your business and nothing else.
- Vehicle mileage deduction. Almost everyone drives their car for business purposes. The good news is that any time you drive for your business, whether that be to client meetings, to the office supply store when Amazon Prime isn't quick enoough, or to a networking event, you can deduct your vehicle mileage. Just make sure to keep a mileage log (destination, purpose, mileage, beginning and end odometer readings are required) and you'd be surprised at how quickly your mileage deduction can add up.
The gift of the right business structure
Making sure your business is operating under the right structure is a great gift idea for your business.
If you're still operating your business as a sole proprietorship (that is, you're not an LLC, corporation, LLP or other legal entity) now's the time to end that bad idea.
Most small businesses should operate as an LLC. There are a few exceptions, such as when you have selling your business in the near term as an exit strategy, you're planning to attract investors, or you are a regulated professional, but by and large, an LLC is the "go-to" entity of choice that meets the needs of most small businesses.
An LLC is relatively inexpensive and easy to setup, is very easy to run (it doesn't have many of the formalities that a corporation has) and even has some tax advantages that a corporation doesn't have (like when you hold real estate in it). The best part though, is that a properly created and operated LLC will provide you with liability protection that will shield your personal assets from your company's liability. Now that's something worth thinking about!
Ready to see if an LLC is right for your small business? Schedule a free consultation today and I'd be happy to help!
The bottom line
All gift-giving analogies aside, the end of the year is a great time to check-in on the legal health of your business. "Set and forget" is a very bad strategy for your business success (especially when it comes to legal pitfalls). Not sure where to start? I'd be happy to sit down with you for a free consultation to help you get going in the right direction. Let's get your business set up for success in 2018!