The holidays are here, and another year is coming to a close; that means as a business owner, there are special considerations you need to keep in mind during this time of year.  Of course, you want to end the year strong and begin 2019 with an energized and healthy financial standing so here are some recommendations as you round out 2018.

Staff Up and Order Supplies

If you provide goods or services that tend to ramp up during the holidays, ensure you have adequate staff in place to keep up with the demand.   You may need to institute a “no time off” policy during the month of December.  If so, make sure your employees know this before they are hired. Good communication from the beginning is key. Additionally, let your staff know ahead of time which days or time periods will be busiest so that everyone can be prepared and more productive. If critical employees are ill or have an emergency, make sure you, as the business leader, have contingency plans to fill their role.

While you are scheduling and maintaining adequate staffing levels, confirm you have supplies stocked.   This includes not only office supplies, but supplies for manufacturing products or providing services for customers. There is nothing much worse than running out of critical inventory during the holiday peak period.

Do Not Ignore Finances

As you gear up for the end of year, do not neglect your financial affairs. Ensure your bookkeeping, especially your income and expenses, is correct. Look at your finances to see if you should be setting aside money for taxes or arranging for other means to pay the IRS.   You may be better off making  estimated payments quarterly than making one payment in April to the IRS.  Paying taxes quarterly allows you to manage your business’ cash flow more efficiently. Speak with your accountant for more information.

Contribute to your Retirement

As a business owner, make sure you are taking advantage of your company benefits. They are not only for your employees, after all. If your company offers a 401(k)-retirement plan, make sure you take advantage of it before the end of the year to maximize tax benefits. If your company does not offer a 401(k), make sure you are contributing to an IRA. The maximum employee contribution to a 401(k) for 2018 is $18,500. The limit to an IRA is $5,500 for 2018, if you are under 50 years of age.

Consider Bonuses and Gifts

If your business has done financially well this year and you have greater discretionary income, you may be considering giving out bonuses. While there is not a one-size fits all approach to how much is appropriate in a bonus, do make sure you provide consistency when giving them. For example, giving a percentage of employees’ salaries might be a good guideline.  An added bonus for the business owner, bonuses can be tax deductible for a business.

Think about Succession Planning

You may be too young to retire, or just starting your business, but it is never too early to have plans for the future in place.  Whether you will transition your business to family members or sell to an outside buyer, putting succession plans into place now can be helpful as you look toward the new year.  Ask your financial advisor for guidance.

Minimize the stress and holiday bustle by planning ahead to help usher in a smooth transition from end of year to the new year.  By preparing for potential problems and outlining ways to keep the trains moving on time, as they say, you will be able to enjoy some well-earned time off.

Claudia Mollerup-Madsen is Vice President and a Financial Advisor with the Wealth Management Division of Morgan Stanley in Houston.


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