As we approach 2010, it would be prudent for us to take a snapshot of our businesses right now and perform the following maintenance and polishing programs:

         Review Employee Benefits

        First and foremost, January 1^st is NOT a magical date that must be worshiped as the golden day to trigger new or modified employee benefits, including a new 401k plan.  I see too many businesses shoot their collective feet (and by extension, those of their employees) by needlessly hanging onto a bad or too-expensive plan for the sake of paying homage to New Year’s.  You can change these any time of year, but for the sake of this article, I will use the time honored tradition of New Year’s Resolutions.

       Let’s not forget about group insurance programs like our group or individual medical insurance plans. Medical insurance premiums are one of the fastest moving targets in terms of price in the industry.  Premiums are constantly changing due to the extremely competitive nature of these companies. I’ll repeat that – Medical Insurance companies are VERY competitive, especially the smaller ones.  Just wanted to clear that up for anyone who’s been hearing a bunch of bilge bubbling out of Washington lately.

       How about group Long Term Disability or Group Life? These are not shopped nearly as often as the medical insurance plans. Why that is, I will never understand.  There are far more life insurance carriers out there than medical, and they play the same competitive game as Blue Cross, Coventry, Humana, and United.  Shop those lesser appreciated (but all too important) plans each year as well. Looking for something new? Perhaps it is time to look into group Long Term Care?

       So, say it with me people, “I resolve to thoroughly examine my employee benefits program!”  Didn’t that feel good?  Now, promise me this will not fall into the same 2010 resolution category as “lose 20 pounds”. Start this project NOW.

 Review Your Operating Agreement and Buy-Sell

      We dug a bit into this topic back in 2008. I still can not stress enough the importance of not only having a well structured agreement in place should something terrible happen to a business owner or key-employee, but it is just as important to revisit these documents regularly.  It is probably not necessary to review or redraft one of these each year. Most businesses do not have the kind of changes each year that would trigger the need to do this, but if you have not even looked at yours in 3 or more years, it is time to pull it out the file cabinet, blow the dust off, and read it with all the owners together over coffee.

       Some things you need to look for are tweaking issues that need to be done. Have any of the owners had a divorce? A disability? A significant health change like being diagnosed with cancer or heart disease? How about one of the owner’s children now working for the company? When is the last time you had your business appraised? Have you adequately prepped for the estate tax changes coming up in 2010 and 2011?

       Here is a big one: Is that life insurance policy still adequate? Is the term nearing expiration? Is it enough coverage? Is it owned in the right manner? Having a life insurance review is something you need to do every other year at a minimum. Just like group plans, individual rates change too. What about a Disability Buy-Sell? (Hmmm….perhaps we need a column on that one). How about your Disability Overhead Expense Plan?

 Tax Preparation

     I’m not a CPA or a Tax Advisor, but I can tell you that if you plan on staying ahead of the curve, you had best stay in contact with one. With our new administration in D.C., we can expect a lot of change for small businesses to come in the near future that will likely amount to higher tax burdens. If you want to protect your work from the greedy hands of Washington politicians, you have got to know the 30,000 page Internal Revenue Code…or you can just do a review with a good CPA who specializes in working with small business owners.

       Next month we will have a special guest to review some 2010 changes to qualified retirement plans to help you get ready to perform your fiduciary responsibilities to your employee’s 401k plan next year.