Disasters, natural or otherwise, could ultimately lead to your company’s demise. Fortunately, advance planning can keep you on track. Here are seven scenarios to be prepared for with strategies on how your business can survive them.
Can Your Business Survive These Seven Potential Business Disasters?
- A natural disaster.
To paraphrase the old saying, you can talk about the weather, but there’s not much you can do about it – except have a plan in place in the event a natural disaster damages your business premises. Two tips: Maintain adequate insurance and store valuable business data at a secure off-location site.
- A key employee quits.
Cross-training can avoid business interruptions if a key employee leaves unexpectedly. You might also want to consider asking key employees to sign a reasonable noncompete agreement to protect confidential information. Typically, these agreements prohibit an employee from working for a competitor for a certain period.
- An employee embezzles company funds.
To safeguard your business assets, divide responsibilities so one person doesn’t have complete control over the books. Set up a system of checks and balances.
- Your biggest customer leaves.
To keep your business from going under, update your marketing plan, stay in touch with former customers, establish an emergency budget, and diversify your revenue stream.
- You become disabled.
“Key-person” disability insurance can provide funding to keep your business afloat. The policy may also cover employees who are vital to operations.
- Your company or partnership splits up.
Draft a buy-sell agreement to ensure a smooth transition due to the sale of a business interest, including a forced sale on the death of one of your shareholders or partners. The agreement can establish the terms of a buy-out and set a value for the respective business interests.
- Your computer system crashes.
Extra hardware, such as tablets or laptops, regular off-site backups, and cloud storage for important documents can avoid a crisis when your computer fails.
Planning for potential disasters that can ruin your business is a key step in securing your company’s future.
Stay Ahead of the Deadline for 2016 Required Minimum Distributions
If you’re over 70½ and are required to take distributions from your IRA or other retirement account, remember that you must take your 2016 required minimum distribution by December 31. Due to year-end holidays and transfer time constraints, getting the process started now can avoid a last-minute rush, as well as a steep penalty of 50% of the amount not taken.
If this year’s distribution is your first, you have a one-time option of waiting until the beginning of April 2017 to start taking withdrawals. Just remember, waiting means you’ll have two taxable distributions next year.
Do you have questions about the 2016 required minimum distributions? Please give us a call today. We’re here to help.