Succession Planning for Family-Owned Hospitality Businesses: 5 Questions to Ask Yourself

Baby boomers privately-own more than 12 million businesses in the U.S., with many of the owners approaching their mid-70s, according to California Association of Business Brokers. A 2016 survey of small businesses in the U.S. indicates, 72 percent of small business owners DO NOT have an exit plan from their businesses and of those, 54 percent intend to leave the workforce in 10 years.

Business owners are focused on growing their companies and often forget to think about their exit strategy from their business. Do you know where your family-owned hospitality business is headed? Building a thriving hospitality business takes a lot of hard work and succession planning is vital to ensure the continued evolution, growth and promotion of leaders.

Benchmarking: Electrical Industry

illuminated light bulb

It is estimated, over 211,000 electrical companies exist across the nation and over 92% of those have less than 10 employees. Although most are small in size, the combined revenue generated by these companies was over $164 billion dollars in 2017. With the low number of employees, along with the minimal property and equipment required to be successful, the industry has seen an increase of companies entering the market.

Good News: Revenue is expected to grow within the industry at roughly 3.5% annually over the next five years. However, with price-sensitive consumers awarding work, often, to the lowest bid, an electrical company’s growth opportunities continue to be tied to their ability to increase margin on jobs by controlling costs.

Start-up Insights for New Breweries: Q&A session with Able Seedhouse and Brewery

brewery bartender pouring tap beer

Able Seedhouse and Brewery is located in Logan Park, Northeast Minneapolis. They brew a wide range of ales, with a highlight on the grains. They literally, and figuratively, started by planting one seed. That one seed turned into many. They are actively working to grow the seedhouse within their brewery, which includes working with local farmers to grow small grains and malting. 

5 Common Succession Planning Problems

business planning paperwork

Succession is inevitable in a business. When the time comes to start thinking about retiring and/or transferring ownership, it is essential to understand common issues related to the process. When a closely-held business owner is asked about their succession plan, it is often a topic that receives little thought, due to the amount of time consumed with day-to-day operations. Every business owner has an emotional and financial investment in their company and often times, is reliant on the proceeds from their investment to fund retirement. The earlier an owner can design a succession plan in their career, the smoother it will make the transition and maximize the financial rewards.

Succession Planning Requires Smart Strategies

Succession planning is important in any business, but it is sometimes overlooked in family-owned operations. This is a big mistake. There are numerous former family-run companies that no longer exist due to poor or no succession plan.

Some studies show that among family businesses, only about 30 percent succeed to the second generation and 10 percent into the third generation.

The plan needs to be well thought out and discussed with everyone affected. Do not just assume a son or daughter will want to carry on the family business. Even if your children say they will take over, they may not have the true desire required to continue a successful operation.

Q & A: Helping Transportation Companies Navigate an Employee Retirement Plan Audit

Audit calculator with reciepts

Does your transportation company’s retirement plan require an audit? An audit is required under federal law to ensure the plan functions, operations and processes are in compliance with established regulations. To help transportation companies streamline their employee retirement plan audit process, we have provided a Q&A summary below to help companies prepare for their employee retirement plan audit.

10 Reasons for a Business Valuation

Business financials meeting flat lay

Most business owners are reactive when it comes to having their businesses valued. But there are many times it pays to be proactive. Some valuations are necessities, such as for determining the value of the business interest in an estate. Others are obtained for more elective reasons, but are helpful to business owners nevertheless and help business owners with planning strategies. 

It is a good idea to review these common valuation scenarios, so you can identify when it is time to obtain your own valuation. Below are 10 reasons to have your business or a business interest valued.

Tax Issues When Planning for Your Business in 2018

business planning at a desk meeting

The Tax Cuts and Jobs Act makes sweeping changes. But some of the new provisions won't necessarily be relevant to your situation. Here is a quick reference guide to the major changes under the new law to help you understand what is changing.

In general, these changes are effective for tax years beginning after December 31, 2017. For businesses, these changes are permanent, unless otherwise noted.

Sales Tax Implications for the Construction Contractors

Construction Workers on site

Success in the construction industry requires the ability to cost effectively create a building envelope, structure or support system and virtually every financial decision regarding your construction company, has a tax consequence. The summary outlined below covers the most common sales tax implications for construction contractors.

Contractors must pay sales tax on the cost of all materials, supplies, and equipment to complete a construction contract. 

Tax Tip: You may pass this tax onto your customers as part of the materials cost. Do not itemize it separately on customer invoices.  

Tax Rules for Tip Jars

tips in a tip jar at restaurant

Are the cash amounts distributed to individuals from tip jars classified as tips under the Tax Code and subject to FICA tax? The tax rules for tip jars are complex. The April 2018 IRS memorandum states the cash amounts distributed to individuals from tip jars are properly classified as tips under the rules in a 2012 revenue procedure and are therefore wages subject to FICA taxes. This cash is also subject to the notice and demand procedures.