February 2, 2017
At the beginning of the year, many people decide they’re going to get in the best shape of their lives. Similarly, many business owners declare that they intend to cut costs and operate at peak efficiency going forward.
But, like keeping up an exercise routine, controlling costs takes an ongoing effort. You need to not only review expenses now, but also commit yourself to doing so regularly. Here are some key points to keep in mind.
Choosing where to slim down
A good cost-control plan starts by clearly identifying manageable expenses in every business area — no exceptions. Prime candidates include:
Controlling expenses in these and other areas doesn’t mean one-time cost cutting, which is really just a reaction to a problem. Cost control requires foresight and strategic management.
Going the distance
Indeed, many business owners sometimes confuse cost-control programs with cost-cutting initiatives. The difference is that a cost-control plan should be a long-term solution — not just a quick-fix measure to make budget or shore up a bad quarter.
Managing expenses should be a strategic decision that starts at the top and is clearly communicated down the organizational chart. Train and encourage your managers to accurately track costs with an eye toward maximizing profitability. In turn, team leaders should work with their employees to solve the problems driving up expenses. It’s always better to be proactive than reactive.
Boosting cash flow
Controlling costs is among the best ways to maintain or increase cash flow. Tightly managed expenses free up dollars for profitable operations, prevent excessive inventory and wasteful spending, and keep cash available for business growth. Need help with your cost-control regimen? Please contact our firm.
If you’re among the families with less exposure to estate tax liability post-TCJA, it’s time to adjust your estate planning strategy to concentrate on reducing income taxes. If state income taxes are a concern, one tool to consider is an incomplete nongrantor trust.
Family businesses often depend on their founder to maintain the company’s success. But eventually that owner will have to depart the business. Depending on the circumstances, the family itself may be thrown into chaos. A solid succession plan can help prevent this.
If you’re thinking about giving holiday gifts to employees or customers or throwing a holiday party, be sure to consider the tax consequences, both for you and for the recipients of your generosity.