There is something refreshing about the start of a new year. For many business owners, the first quarter is a time of renewed motivation. As a business owner, this is an ideal time for goal setting and planning so that you can take advantage of the opportunities in front of you. While there are a plethora of ways to improve your business in the new year, here are a few tips to help improve your bottom line, while keeping your employees happy.
Improve Company Culture
The culture of a company is the foundation upon which the company is built. The culture of your company sets the tone for your employees. By improving and strengthening the culture of your company, it can help you improve your company’s reputation, employee retention and productivity, as well as making your organization a destination for top talent.
Revisit Corporate Guidelines
As a company grows, it must reassess the way it does business. Don’t get stuck in the mindset of “we’ve always done it that way.” This is not to say that the corporate manifesto needs a complete overhaul, but what worked yesterday may not be as on-point today. Empowering your employees to think outside the box and find creative solutions to complex problems encourages growth and may boost morale.
Take Advantage of Current Economic Conditions
Not all business owners in 2018 took full advantage of the new regulations associated with The Tax Reform Act of 2017. If you are the owner of a pass-through business entity (such as a Partnership, LLC, Sole Proprietor, S Corporation), Section 199A may allow you to deduct as much as 20% of the business’ qualified business income (QBI) from your personal income.
Combine this strategy with a qualified plan and you may increase your current tax savings while you build a tax efficient retirement account. If you have a need for life insurance, including it in your qualified plan will allow you to obtain life insurance on a tax-deductible basis.
Reward Key Employees (And Yourself)
Rewarding top talent in today’s competitive environment is a must. It’s vital to offer a comprehensive benefits package to your employees, but sometimes that’s not enough. For those key employees, it may take more. Deferred compensation plans, executive bonuses and split dollar arrangements are becoming more and more commonplace as ways to selectively retain and reward top employees.
For C Corporations, a split dollar loan arrangement for a highly compensated employee (or yourself), may be more attractive given the current 21% corporate tax rate, providing the potential for a more tax efficient compensation package.