Articles Posted in Business Planning

If you are a business owner, there is no doubt you have thought about what might happen to your business once you are gone. At McCulloch & Miller, we specialize in planning for the future, and business succession is no different.

Today’s blog covers some basics that could help you think through your business’s long-term ownership, but at the end of the day, the most important takeaway is to plan early and plan often. By ensuring you have put your company’s plan in writing, you can take care of the business that you have worked so hard to build. As always, we recommend contacting a Houston estate planning attorney to talk through the specifics of your plan and make sure it covers all of the necessary and relevant details.

Option One: Internal Sale

One popular option among those who own family business or have children and grandchildren is to hand over the business to a relative. This hand off could be in the form of a sale or a gift. In this scenario, it’s important to talk to an expert about how to minimize the possible tax consequences that you and your loved one could suffer. It’s also important to have open and frequent conversations with the family member you plan on naming as the recipient of the business. If that family member is not open to the transfer, the long-term success of your business will be threatened.

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As many business owners know, business succession planning is a process, not a one-time ordeal. Succession planning is the activity through which organizations identify, train, and set up future leaders to take over when current management steps down. All companies should have some form of succession planning in place, but the methods and intensity of the planning can vary from company to company. Today, we cover some basics of succession planning that all business owners and leadership teams should keep in mind.

Recruitment

The first basic of business succession planning is recruiting capable, hardworking leaders. In recruiting, it’s important to think about widening your network to attract talented, diverse employees that have a desire to grow with the company. Your hiring decisions should reflect your company values, and you should work hard to retain the talent that you’ve acquired.

Training

The second facet of business succession planning is training. As an employee spends more time at a company, he or she develops institutional knowledge, and it’s key that employees pass this knowledge down to future leaders. It can also be helpful to cross-train, or to have employees learn the jobs of employees in other (sometimes seemingly unrelated) departments. As you train more leaders, it can be valuable to take a step back and observe who is taking the reins and who is implementing your business strategies at the highest level.

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McCulloch & Miller, PLLC is thrilled to officially announce that we are a part of the UpCity community of top B2B service providers!

At McCulloch & Miller, we help guide small business owners and investors through planning strategies such as asset protection, tax consequences, and viable retirement planning. Every investor is different, and no one plan is the same. That’s why we make sure to assist our clients in knowing all of their options to better protect their values, goals, and legacy, in the way that they feel is best.

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UpCity is a resource that helps connect businesses to service providers they can trust. With more than 70,000 listed providers—from marketing agencies to accounting firms to HR consultants to IT specialists, and many more—1.5 million businesses (and counting) have visited UpCity to research and identify the best partner for their needs. 

It takes confidence and courage to start a business. In fact, many believe that the best business owners are those who are comfortable with some level of risk. However, there are acceptable risks and unacceptable risks, and any business owner knows that avoiding unnecessary risk is the cornerstone of running a successful business. Because of this, many business owners take the proactive step of creating a Houston asset protection plan.

What is an Asset Protection Plan?

An asset protection plan is a strategy that business owners can use to protect their assets in the event they get sued or end up going through a divorce. The reasons why a business owner decides to create an asset protection plan vary. For some, it is the fact that their business operates in a field that sees a significant amount of litigation. Examples include certain types of doctors, who may face a medical malpractice lawsuit. For others, it is the fear that they will be targeted for litigation based on their substantial assets. Whatever the reason, an asset protection plan can help preserve what a business owner has worked so hard to create.

6a019b003fe4d5970b025d9b3eaf45200c-300x200The U.S. Small Business Administration (SBA) is offering up to $2 million in Economic Injury Disaster Loans for small businesses impacted by the coronavirus, in addition to a resource page detailing eligibility and how to apply.

It’s estimated that some 30 million US small businesses may fall victim to the coronavirus through closures, cancellations and other revenue losses. With no clear end in sight, the Small Business Administration (SBA) is offering eligible businesses low-interest disaster relief loans to cover operating expenses.

These loans may be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact. The interest rate is 3.75% for small businesses. The interest rate for non-profits is 2.75%. In order to keep payments affordable, they are offering long-term repayments, up to a maximum of 30 years. Terms are determined on a case-by-case basis, based upon each borrower’s ability to repay.

6a019b003fe4d5970b0240a517463f200b-600wi-300x200On March 13 President Trump declared a national emergency due to extraordinary circumstances resulting from Coronavirus. This Declaration opens up new methods for employers to provide tax-favored financial assistance to employees affected by the virus.

As the coronavirus pandemic emergency unfolds, it’s clear that increasing numbers of employees will likely suffer financial impacts … from quarantines, illnesses, workplace closings, etc. President Trump’s declaration of a national emergency on March 13, 2020 now allows employers to make direct disaster-relief payments to assist employees affected by the virus.

These types of payments are not treated as income/wages to the employees and are deductible to the employer as ordinary and necessary business expenses. There is no specific cap on the amount of assistance that may be provided to an employee other than it must be “reasonable and necessary” and must not be for an expense reimbursable by the employee’s insurance.

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