This winter I was snowmobiling in the Central Oregon Cascades with my oldest son.  Conditions were ideal and we were having a magnificent time.  At some point, while climbing a hill, I buried the back end of my snowmobile in a drift and became stuck.  My son was nowhere to been seen.   I quickly hopped off my sled and prepared to lift the back end up and out of the trench.  I bent over, lifted hard and as the back end began to move I felt a piercing pain in my lower back.

This wasn’t the first time I had strained my back so I knew what to expect. There would be weeks of troubled sleep, extreme caution in doing “every little thing”, and very little of doing the things that I most enjoyed. All accompanied by lots of ice and Advil.

Time has passed and I am now getting back to normal.  I have learned from experience that if I don’t take care of my back it will not take care of me.  Watching my weight, stretching, strengthening my core are all ways that I have kept my back healthy and strong for years.  When I don’t do these things I run the risk of hurting my back again.

As a small business owner I must also be vigilant about the “health and wellness” of my business.  It is often said that small business is the backbone of America.  I believe this to be true.

How can we as small business owners take care of our businesses so that they will take care of us and in turn our nation? Beyond the basics, what can we, as small business owners do to ensure that our companies not only survive but thrive?

• Become involved in industry organizations. Learning what others are doing in your industry can be powerful.  Banding together as an industry to let your voice be heard can have a positive impact.
• Find competent advisors. An accountant with experience and wisdom and with whom you work well is a key asset to your business.  The same can be said for an attorney or other professional.  Trusted professional advisors can be a wonderful resource that provides a perspective that is difficult for a small business owner who is working in the trenches to have.
• Let your voice be heard. Get involved in your local and state government to make sure that policy and law do not adversely impact your business.
• Create and execute your plan. If you don’t have a plan – create one!  Once you have got a plan, follow it and regularly review it to make sure it is pertinent and accurate.  The great thing about small business is our ability to adapt to an ever changing marketplace.
• Make sure you are in compliance. With the Government’s ever expanding appetite for cash and our country’s predatory legal system it is critical that your business’ corporate structure be solid and impenetrable.  Make sure your Corporation or LLC is current on its filings with local, state and federal governments.  If you are not incorporated do so now.  Regardless of the size of your business you should be incorporated for asset protection issues.  Ninety five percent of small business owners do not maintain their corporate record book (minutes and resolutions).  If you are audited or sued this is one of the first things that are reviewed to determine the strength of the corporate veil (the thing that separates you from your business).   Do your corporate records!

There are many more items you could to add to this list.  I would love to hear your thoughts. So would all the other small business owners that form the backbone of our wonderful nation.

I just attended a really great summit at the Flamingo Resort in Las Vegas. It was presented by eCommerce Merchants, the premier industry association for online retailers. In attendance were senior executives from the all over the web including eBay, Amazon, Overstock.com and hundreds of stand alone online shopping platforms.

I was there at the invitation of the eCommerce Merchants Board of Directors. A member of that board, David Hardin (he owns Shoetime, one of the biggest shoe sellers on the web) had attended the Laughlin Associates seminar last month in Las Vegas. At that time he told me that his industry desperately needed what Laughlin was teaching and asked me to come attend the summit. Boy, am I glad that I did. First let me say that I was blown away by the level of cooperation, support, and sharing of “secrets” that I observed among this group. They seemed to really want to help each other grow. They believe that brick and mortar is fading and that digital distribution will soon eclipse the old tried and true. That the local mall is on its way out and that Amazon and its competitors are taking charge of the online capitalistic party. These folks make a pretty good argument and are willing to overlook their own competitiveness for a few days in order to help ensure that this dream of online, retail supremacy come to fruition.

I got the chance to visit with dozens of the key players at the event and the primary issue relayed to me from these industry leaders didn’t come as a surprise at all. They said that many e-commerce sellers had started out working from their kitchen table and that even the companies that had become super-successful sellers hadn’t ever done the foundational work to make their enterprise into a real business.

Four questions they (and all business owners) should ask themselves:

Is my business operated as a Corporation or LLC?
Have I issued stock?
Do I hold regular, formal board meetings?
Do I memorialize important resolutions?

Without doing this work the owners of these companies would never be able to truly develop, protect, grow, and eventually sell or pass down the business that they had built.

These web entrepreneurs have fallen into a trap that many small business owners find themselves in. They are really good at doing some sort of job. They hang out their shingle and start doing that job for themselves instead of for an employer. They become successful. Everything is rosy until they are challenged. Maybe it’s an audit, maybe a lawsuit, maybe a partnership or marriage breaking up. Whatever the situation, the person who was doing great at doing what they did great was now in hot water. They might even lose everything they had built and all because they didn’t build the business on a solid foundation.

It doesn’t matter which industry you are in. In every case you, as a small business person, must do smart things to look out for your business. There is no outside Board of Directors looking over your shoulder. No attorney, CPA, or consultant that is going to push you to do the work that is required to survive. Don’t leave it to others to hold your hand through the boring but necessary issues that you must deal with in order to defend yourself if your business is ever challenged. I just met hundreds of smart people who are doing big sales in cyberspace. Most of them admit that they need to do better at building their foundation. So now, be honest; what kind of foundation is your house built upon?

An irrevocable trust is lawsuit proof because you do not technically own the assets of the trust, even if you may control the assets through underlying entities. In a trust, the “irrevocability” goes to the fact that those you name as beneficiaries must remain as beneficiaries. You cannot change that.  Therefore you have given away that particular asset that you have placed in the trust.  If you are no longer the owner, then your lawsuit adversary can not touch it.  On the other hand, if you had the ability to change the beneficiaries of the trust, the Court would simply tell you to change the trust’s beneficiary to that of your lawsuit adversary. (That is one of the reasons why revocable or “living trusts” are not lawsuit proof.)

Entrepreneurs and business owners crave lawsuit protection and understand its wisdom, but are also reluctant to give up control.   These same entrepreneurs (that’s you) also want some security that they may have use of those assets while they are still living. This is why nearly all estate planning attorneys and certainly all asset protection law attorneys will couple the irrevocable trust with an underlying business entity, such as a family limited partnership, LLC or corporation.  Choosing which entity is best will depend on the type of asset the entity is holding, your circumstances and your myriad of objectives.  The purpose of coupling the underlying business entity with the lawsuit protection trust is to allow the original owner to have as much direct control as they desire over the assets until their death.  The person that makes the decisions on how to invest the assets, when to sell the assets and so forth, is the person who runs and manages the underlying business entities.

As Rockefeller, who used such planning stated, his key to success was “to own nothing and control everything”. As an entrepreneur, this should be your same goal.  Such planning will provide you with increased privacy, enhanced estate and succession planning and lawsuit protection over your current wealth, your retirement security, and those assets you wish to pass down to your children and grandchildren.

With proper planning, all of your objectives can be met: you can gain true lawsuit protection, without depending on individuals outside your personal estate planning, while at the same time maintaining control over the assets.

Now that the Obama Administration has finally prevailed in turning its Health Care Reform initiative in to law, it is time to focus on what this really means to small business owners. And here it is…YOU’RE GONNA NEED TO MAKE MORE MONEY!

Regardless of which side of the debate you were on a couple weeks ago, the reality is that changes are coming and those will include increased taxes for businesses and many business owners. Not only are your taxes going to increase, but so is the level of tax enforcement by federal and state governments. In President Obama’s Fiscal Year 2010 budget delivered last May, it was noted that the IRS stood to receive an overall increase in funding of $764 million, including a $400 million increase in tax enforcement funds. This represented a 13 percent increase for IRS enforcement activities. Among the primary targets of this increased wave of audits will be sole proprietors, single member LLCs, and other closely held businesses. I have personally talked with a number of people who are terrified to take common deductions such as those associated with:+++++++++

They have reason to be fearful. All of these are red flags to the IRS and can trigger an audit. While the thought of an audit is scary, the only thing to really fear is being unprepared for an audit. If you don’t have your records in order then you will have a miserable and expensive experience. If you do have your records in order, odds are that you will zip through the process. I want to be clear about what these records include. In addition to your financial records, receipts, mileage log and so on, in a business audit you must have your corporate record book up to date. If you are a corporation or LLC and your record book does not show that you have been respecting the corporate veil, I guarantee you that the IRS auditor will not respect it either. Every year we hear stories of valuable corporate deductions being disallowed because the corporate record book did not indicate that the shareholder was treating the business like a separate entity. Instead of enjoying the tax deductions and protections afforded by a corporation or LLC, the business formalities were ignored and the shareholder managed the business like it was a sole proprietorship. These are expensive mistakes and hard lessons to learn.

As you navigate in this increasingly challenging environment, you will need every possible advantage you can employ. As a business owner, one of the most obvious and trusted protective shields available is a corporate entity. Using such a shield can keep you and your family safe from all kinds of attacks. But if you don’t take care of your armor as you should, you will find it rusted and worthless when it comes time to go to battle. There is no reason that this should ever happen.

The ride is about to get more turbulent for many small business owners as the government doubles its efforts to exact funds from our bruised and shrinking private sector. Those of us that are committed to being in business for ourselves will have to deal with working more days each year for Uncle Sam. However, the number of days that each one of us works for him will differ based on our thoughtful preparation and targeted plan of action. It’s all up to you.

Laughlin Associates, provides consultation, education and hands on help to thousands of business owners every day to ensure that their corporate records are in order and ready when they need them most.

Author Aaron Young maintains his own blog at http://www.smallbusiness411.com

The team at Brian Tracy International (BTI) has just partnered with Laughlin Associates as their exclusive incorporation, and corporate record book management services provider.

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