Small businesses are the lifeblood of America. Even so, if you believe the critics, the odds are stacked against you when entering into a business. At Anderson Business Advisors, our small business clients achieve phenomenal results because they understand that planning is crucial.
The obstacles for businesses actually are fairly simple. They are those things that rob a business of the necessary money to remain a going concern. The most likely culprits that sink businesses are taxes and exposure to liability.
Planning
The first step of your plan needs to be an honest assessment - from where you are starting, going and exiting. This is more than just deciding a particular line of business. It means you need to determine what assets you have at your disposal, the individual owner's net worth, as well as factoring in a variety of other considerations.
Unfortunately, small businesses are typically under extreme financial pressure in the beginning and do not think that a professional evaluation is plausible. Nothing could be farther from the truth at Anderson Business Advisors. Anderson Business Advisors, unlike most professionals, typically does not charge for assessments. We believe strongly in this philosphy, because you cannot determine where you are going unless you know where to begin. Our commitment to education and providing an honest assessment has made ABA a leader in business planning for small businesses. We make it as simple as possible for people to contact us and to get an honest assessment. How can someone offer you directions unless they know where you are starting from?
At Anderson Business Advisors, we strive to help our clients become more successful in business. We provide our clients with the tools necessary to maximize profits while limiting exposure to liability. If our clients do not prosper, we know that they will not come back, so we focus on ways to help our clients save every possible nickel, then we show them how to turn those nickels into dollars.
Tools For Business Owners
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To combat these adversaries requires wielding the proper tools. Some of those tools include Corporations, Limited Liability Companies, and Limited Partnerships. Each of these entities has the unique ability to lower taxes and reduce your exposure to lawsuits. Take the example of Cory who owned and ran a small asphalt paving company in Ellensburg, Washington. Cory operated his business as a sole-proprietor. Every dime Cory made was taxable to him as active income, and every asset Cory owned, personal and business, was exposed to lawsuits.
In Cory's situation it made business sense to remove his business assets from his personal name to protect him from the business' liabilities. It also made perfect sense to keep the business assets separate and apart from the asphalt business. By maintaining the business assets apart from his asphalt business, Cory further limited his risk of loss. If someone sued the asphalt business, the equipment could not be attached by the businesses creditors. Why? The equipment is not owned by the asphalt business.
By deciding on forming business entities to conduct his asphalt business, Cory will benefit from a reduction in taxes and an increase in corporate fringe benefits. With a formal business structure there are a number of ways a small business owner can receive non-taxable benefits that are unavailable in the sole proprietorship setting. Cory will benefit from the use of a dual entity strategy that capitalizes on the benefits of a Corporation and a Limited Liability Company.
There are, of course, other business structures that are available to the small business person. Depending on the type of business, another structure may be more appropriate. At Anderson Law Group, our planners will help you decide what tools will be the best for you to utilize in your venture. As businesses go through different stages, the laws covering business structures have been developed to allow structures to change and plans to be flexible. However, you need to know your options at the inception so that you can create the most effective plan for your particular business. This is where Anderson Business Advisors can help.
To speak with a representative, call us at 800.706.4741 or email us.
