How Preparing for Tax Season Also Helps Your Ownership Conversion Plan™
Are you the kind of business owner who scrambles through a box of receipts once tax season hits or do you have your records organized and ready to go? The latter, obviously makes surviving tax season a whole lot easier but it also is a big part of having a solid Ownership Conversion Plan™ (OCP) for your business.
As I stress in my book, it is equally important to work on your business as it is to work in your business. Therefore, it is vital for you to spend time making sure that your house is in order as you prepare for tax season and beyond. You can implement simple organizational techniques for your business that will, in turn, help your OCP.
While you are looking at the previous year, you can also look forward on how to best plan for the coming year. What areas can you improve? Are you taking full advantage of the tax benefits available to business owners?
With the new Tax Reform benefits going into place this year, you can also anticipate what additional documentation you will need to file your 2018 taxes next year. Keeping careful, organized records allows you to see the progression of your financial data but it also helps potential buyers see a snapshot of your history and future. Consistent cash flow, growth and sustainable earnings prove the imminent potential of your company. If the business is on a good trajectory, you should be highlighting the healthy financial outlook.
Additionally, you should be looking for risks. Are you compliant in handling human resource matters? Do you have proper chain of command in governance? How would you rate your reputation amongst consumers? As you step back to analyze the answers to these questions, you can also start creating a checklist of processes you can implement to make planning for the future tax filing seasons easier. More importantly, the planning will help your business to turn into a butterfly and that is what will attract potential buyers.
Ganim Financial and GFS do not offer tax or legal advice. Any decisions whether to implement these ideas should be made by the client in consultation with professional financial, tax, and legal counsel.