World Class Mergers & Acquisitions  |  For Companies $5 Million to $100 Million in Revenue

Starting 2014, the Right Way


So far at least, the consensus is that the economy will be relatively stable in 2014.   With an average of 140,000 jobs being created each month last year and most economic indicators showing positives, this year should be better than last.  Too often, business people wait until late in the year to do their strategic planning.  While there are some actions that can be taken at that point, those who work proactively throughout the year implementing business and tax strategies perform far better than those who put planning off to the last minute.  There is plenty of business and tax planning that should be planned and executed throughout the year.

Business Operations

According to the latest Beige Book report, the overall United States economy is continuing modest or moderate growth.  Given this, businesses should work hard to increase revenue and look to hire additional staff.    As of late, there has been a trend toward businesses hiring temporary staff ahead of hiring full time employees.  While many businesses have never explored this option, it is worth developing a relationship with temporary labor organizations.  It is expected that business will continue to build and stabilize during 2014; it is therefore the appropriate time to ramp up labor and inventories.


Instinctively, businesses tend to cut investments when business is slow.  Ordinarily, purchasing less in leaner times would be appropriate. However, given Internal Revenue Code Section 179, there is still an incentive to make additional investments.  So far in 2014, the deduction has fallen to $25,000 and Congress has not reenacted the higher amounts.  Given the importance of advanced depreciation, it is likely the limit will once again be increased to $250,000 to $500,000.  We will have to monitor legislation to keep the readers updated.


The past economic down turn has also brought lower financing rates that are currently remaining in the recovery.  Financing of buildings and equipment may be eligible for lower refinancing rates.  Check with your bank to see if your loans can be refinanced.  Just be sure to check the fees and costs before committing to any refinancing.

Estate Planning

Many business people have complex estates.  Along with the complexity, the average net worth of a business person is substantially higher than an employee.  The 2014 estate tax exemption is 5,340,000.  It is best to begin estate planning early in the year so issues can be resolved throughout the year and the estate plan can have time to be implemented during the year.  Please review your total estate value and start the process of a complete estate planning process now.

Succession Planning

Along with estate planning, comes business succession planning for those who own businesses.  Business succession planning is not as simple as drafting a will.  Business succession planning, when done properly, provides a smooth transition for the succeeding generation.  The process includes the valuation of the business and the creation of legal documents, such as a buy/sell agreement (the most important legal document a business owner can have.)  When succession planning is not done or is done improperly, it usually means the loss of the business and therefore the loss of your lifetime of hard work.  Don’t procrastinate, start the process now!


Beyond the items discussed herein, there is plenty that can be done to improve your financial and tax situation throughout the year.  Too often people approach financial, tax, and business planning as an after-thought of running the operations of their business.  Running a business without a plan to exit and retire is similar to driving a vehicle with no destination in mind.   Proper planning and implementation of an exit, succession and tax strategy allows you to keep more of your hard earned wealth and allows you to have a better retirement when the time comes.  If you are not sure where to start or how to start, please contact the experts at the Center to assist you.

By: Dr. Bart Basi at the Center for Financial, Legal and Tax Planning for Transworld M&A Advisors