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.
Claudia Mollerup-Madsen, Vice-President and Financial Advisor at Morgan Stanley in Houston, was born in Peru, and spent her life as an expat child living around the world. Claudia graduated from St. Mary’s University in San Antonio with a BA in International Business. She is fluent in both Spanish and English and has been in the financial advisory sector for 30 years, serving both U.S. and Non-U.S. citizens.
She worked for Merrill Lynch from 1989-1990; Citigroup Private Bank 1990-2001; UBS International 2001- 2009; and moved to Morgan Stanley in 2009.
Claudia has received several awards and honors including being named as one of Houston Business Journal’s 2018 Women Who Mean Business and being honored as a member of the 2019 MAKERS class, which celebrates the trailblazing women of today and tomorrow. She is also a member of the Morgan Stanley Women’s Advisory Council, an honor chosen by her management team to develop the empowerment and professional advancement of female advisors.
She has been interviewed multiple times as a financial expert on ABC13, Univision, KUHF, NPR, Houston Business Journal and KPRC 950 am.
She is a past board member for The Women’s Resource of Greater Houston and continues to teach financial literacy to women and young women at risk. Additionally, she is a member of the Houston Livestock Show and Rodeo’s International committee and a USTA Texas region board member, an elite group of tennis advocates promoting tennis.Claudia Mollerup-Madsen