Have you made sure that your business is ready and your personal assets are protected in case of economic downturn or disgruntled employees? Are you hoping to be able to retire in the next 10 to 15 years? Here is a list of "must do" items for every savvy business owner to meet these goals:
- Incorporate! You can protect all of your personal assets by establishing a corporation or an LLC to own your business. Why risk your home and retirement savings in the event business goes bad for a while and your business creditors won't wait for things to turn around? There simply is no excuse for remaining a sole proprietorship.
- Go Beyond Incorporating! OK, so you incorporated, but have you kept up with your legally required filings with the Secretary of State and preparation of Annual Minutes? If not, you wasted your time incorporating in the first place because creditors can "pierce the corporate veil" and get to your personal assets.
- Separate Your Assets! If you own the building where your business operates, you should separate the ownership of the real estate from your ownership of the business you operate there. This separation will not only give you an extra layer of protection in the event of economic downturn, but will also give you an extra avenue of retirement income.
- Train Your Managers To Avoid Discrimination Claims! You would not let your business go without the protections of property and liability insurance coverage. Similarly, you should never let your managers (or yourself, if your business is small) go without the training needed to avoid -- or at least minimize -- discrimination claims by disgruntled employees.
- Create Policies To Avoid Disgruntled Employees! Not every business can afford Cadillac benefits, but every business should establish (and follow) standard employee policies so that employees will know what is expected of them and realize that all employees are treated the same. Establishing standard employee policies and publishing them in an Employee Handbook will be a benefit to every business.
- Protect Your Business With Mandatory Noncompete Employee Agreements! Every business owner spends time training and coaching employees. Requiring your employees to sign a Noncompete Agreement which is carefully drafted to be enforceable under current Indiana law will help ensure you that your investment in your employees does not ever later benefit your competitors.
- Tie Key Employees To Your Business! If you are lucky enough to have a key employee upon whom you know you can rely to handle your business while you are not there, you have a potential avenue for your own retirement. Creating a written employee contract, with "golden handcuffs" to incentivize your key employee to stay for the long term can give your business the security of longevity, provide a potential buyer for your business when you retire, and give you peace of mind in the meantime.