“Uneasy lies the head that wears a crown.” If you’re a business owner, chances are you’ve had your fair-share of sleepless nights, worrying and wondering about what may be lurking in the shadows, ready to derail your fortunes. In keeping with the spirit of the season, here are a handful of nightmarish scenarios to ponder over and plan for.
Big government seemingly keeps getting bigger, despite public calls to shrink and simplify it. Whether they’re starting at the IRS, New York State Sales Tax, or a local municipality, regulations of all shapes and sizes are an unfortunate reality of doing business these days. It’s critical to fully understand the rules and laws that affect your daily operations. Especially with a new administration in the Oval Office, you never know when a newspaper headline becomes a new headache for you. Pay attention to larger trends and chatter that may indicate unexpected consequences for your business. Consider performing a legal review or risk assessments to determine whether or not you’re opening yourself up to exposure. Don’t exclude less-familiar subjects from your analyses: human resources, insurance, retirement plan trusteeship, and taxes. It’s often these unattended-to areas that creep out and cause major losses.
Current success only ensures that competitors are either chomping at the bit to challenge you, or that someone is tinkering with a novel approach or idea that may prove disruptive to your business. Don’t rest on your laurels and assume that future wealth is guaranteed to you. Embrace the age-old SWOT analysis. It’s covered in every Management 101 course for a reason. What are your strengths, weaknesses, opportunities, and threats? And how are you managing and positioning your business to either take advantage or overcome them? Try to think objectively and critically about your business to assess where you may be vulnerable, then make investments and take steps to remedy.
Most companies’ largest expense burdens are staff-related: salaries, payroll taxes, medical insurance, retirement plan contributions, unemployment…the list seemingly goes on and on. It begins with finding the right talent that can help drive your business forward though. Is your business filled with like-minded individuals who are following your mission statement and who are future leaders, or are you staffed with transients who will inevitably turn over and cost you time, money, and sanity? Work on your company’s culture. Try to attract energetic, motivated individuals at different levels that can propel your business higher. Pay fairly and treat your employees respectfully. Consider a softer environment (remote access, flexible schedules, and creative benefits packages) that appeals to the millennial crowd. In this age of transparency and entitlement, it’s hard to not evolve and still thrive. Check your Glassdoor reviews. They may be enlightening…or frightening.
4. Exit Strategies
Try as you might, you won’t be running your business forever. One way or another, you will be exiting at some point in the future. As depressing as it may be to consider this, it’s an inevitability that must be confronted. Proactive planning is the only means to a prosperous end. If you intend to sell the business to outsiders, identify a rough end point so you can begin a five-year plan to position yourself to maximize your valuation and put in place attractive staff members to carry your torch. If you’re looking to be acquired from within, dust off those shareholder agreements and make sure you have a reasonable legal mechanism to allow for it. Then make sure you’re grooming able individuals to take your place and carry on in your stead. All too often businesses fail to transition from one generation of ownership to another. Many of those failures could have been avoided with foresight and proper preparation.
This is just a small sampling of the endless list of issues facing today’s business owners. The recurring theme is to not be complacent. Past performance does not guarantee future results. Remain vigilant, question yourself, and plan ahead.