If summer is a slow time for your business, it’s probably a good time to take care of some of the chores you’ve been putting off for a while.
With customers away or having some down time themselves, you’ll have more freedom to evaluate your company’s finances, think about formulating some employment policies and have some maintenance work done around the office.
Perhaps the top item on your agenda should be a financial checkup for your business.
“It’s a good time to, halfway through the year, do a tax projection,” said Gordon Spoor, a certified public accountant with Spoor, Doyle &Associates in St. Petersburg, Fla. He said business owners should ask “are their estimated payments sufficient – not just to avoid tax penalties, but more important, are they overestimating?”
Tax planning isn’t only about how much you’ll owe the government; it’s part of your overall business planning. So this is also the time when owners should be thinking about the capital spending they might want to do between now and the end of the year – and maybe in early 2005.
“They want to do cash-flow budgeting and try to time their purchases,” Spoor said.
The timing has to do with taking advantage of the Section 179 deduction, which allows businesses to deduct upfront the cost of equipment bought and put into service during the calendar year. The maximum deduction for 2004 is $100,000, the same as in 2003.
Spoor also noted that many companies are doing better now that the economy is stronger; those owners with improved cash flows might want to consider setting up a retirement plan for themselves and their employees.
The summer is also a good time to put together an employee handbook, a helpful item that many small businesses don’t have. Such a handbook spells out policies on a variety of topics related to employees, including hiring, firing and discipline; hours and pay; time off, including vacation, personal days and jury duty; benefits; health and safety; and sexual harassment.
Lisa Guerin, an attorney and co-author of “Create Your Own Employee Handbook,” says there are three main reasons for having an employee handbook. The first is to answer common questions that many employees are likely to have.
Another reason is for business owners to make sure they are consistent in the way they treat workers. “Be sure everyone’s treated the same,” Guerin said.
Moreover, having a handbook in which policies are written down can give a company legal protections in the event an employee sues, she said. And in some states, some policies are required to be in writing.
Creating a handbook can help you formulate policies if you don’t already have them. It doesn’t have to be difficult; there are guidebooks that can walk you through the process.
Slow periods are also great times to take care of your company’s physical plant. Get the office painted (there are plenty of college students on summer break willing to do it for considerably less than the pros) and replace those beat-up desks and chairs. If there’s major work to be done, such as getting a ceiling replaced, it’s probably easier done when some of your employees are on vacation.
This also might be a good time to replace a failing computer system or change your software. With less demand from customers or clients, you’ll have more time to work kinks out before business picks up again.
Of course, for some companies, the summer is their busy time. For them, the arrival of September and fall will be their time to get some of these chores done.
Small Business is a weekly column on the topic by the Associated Press.
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