Why Business Owners Should Plan on the Obvious

Some things are just obvious.

Seen that new study about how a dog is as smart as a typical 2-year-old? If you're a parent of a 2-year-old, I'm sure that this comes as no surprise. And was anyone surprised that the governor of South Carolina who preached family values ​​and frugal living was having having an affair with an Argentinean woman on the taxpayer's dime? Anyone wants to take a guess where his South American hottie's going to end up once he loses his job and power? Obviously.

Just like some of the things going on in the economy right now. There are obvious trends. These events will affect how people run their businesses. A lot of smart business owners I know have recognized the obvious. And are doing something about it.

For example, there will, without a doubt, be a health-care reform bill. That's obvious. The President's party overwhelmingly controls all three branches of the government. He's going to get his health-care overhaul. It's also obvious that it will not be all that he wants. There are just too many powerful interests who depend on the benefits of our current health care system. Like the insurance companies, pharmaceutical firms, plastic surgeons, Alex Rodriguez, and Andy Dick. So there will be a compromise. And there will be additional costs to individuals and businesses.

Taxes Are Going Up. Most business owners I know have already accepted this. They're talking right now to their health insurance brokers. They're not committing to any long-term plans. They're telling their employees that no one's going to lose their insurance and how much they're valued. They're following the news of this legislation very closely and will be ready to act when things finally shake out.

It's obvious to me that those Somali pirates are actually going to hijack a cruise ship, the Iranians will very much develop a nuclear bomb, and Mad Men will run away with next year's Emmys. Oh, and our taxes are going to go up. That's obvious, too.

The President has already promised to raise tax rates for people making $ 200,000 or more per year. The deficit is ballooning and even my dog ​​(who's as smart as that pain-in-the-neck 2-year old down the street) can figure out that more taxes will be needed to pay for this.

So that's why many smart business owners I know are trying to report as much income as possible. They're speeding up collections and invoicing wherever possible. They're pushing deductions ahead into the next year. Why? Because if they're going to pay taxes on our income, they might as well pay them now, while the rates are lower, then later, when they're inevitably going to go up.

And that goes for estate taxes, too. The President wants to freeze these rates permanently at 2009 levels. But many in Congress feel it's still not paying for itself and look to estate taxes as another potential revenue source. As the government looks for more funding for its programs, estate taxes look like a great way to raise that money at a low political cost, so do not expect those rates to stay where they are.

Smart business owners who have worked many years to grow their personal wealth to see this storm on the horizon, too. These business owners are doing things in the background right now. They're transferring assets to their children and family members. They're talking to their attorneys. They're setting up trusts and making their plans. Right now a 55% tax may be a bargain.

Chasing Down Government Money

Here's another obvious thing: Vladimir Putin is ripped! Have you seen those bare-chested photos of him circulating the Internet? Uspekhov! There's a man that believes in a strong, large government. Just like our President. You can agree or disagree with Mr. Obama's motives. You can complain all you want about more regulation. But it's obvious to anyone running a business that there's never been a better time to do business with the government than right now.

Just check out recovery.gov, fedbizopps.gov, grants.gov, and all the other feeling-the-government's-love-dot-gov Web sites. Why? Because thousands of business owners are already doing it. They're learning the ropes for bidding, working, and then collecting from the government (or the government's beneficies). Sure, many business owners believe in less government, the right to bear arms, and the freedom to listen to Lynyrd Skynyrd any damn time we want. But for now they're chasing money from the obvious source: Uncle Sam.

Come to think of it, maybe they should be chasing Ryan Seacrest instead. He just did a $ 35 million deal with American Idol. Obviously their payroll costs, like many small businesses' costs, are going up. The minimum wage is already up more than 24% from three years ago. Social Security needs funding. People who thought they would retire … now can not. Oh, did I mention health care? Ask any business owner and they'll tell you that the most important part of their company is their people. But they're not getting any cheaper.

Real Estate is a Good Investment

Luckily there are a lot of smart unemployed people out there now. So they're outsourcing more work to them. And they're asking our own people to do more and more often, rather than hire additional workers. Smart business owners who plan for growth in 2010 are planning to do so with as few people as possible. And to invest their money wisely.

And one good place to invest that money is real estate, where the market has bottomed out. A lot of those empty storefronts you're seeing are not because someone went out of business. It's because they've relocated to a better spot for less money. The recession has brought property values ​​within reach of many of us and lowered rent rates at the same time.

Many business owners think it's obvious that inflation will go up and the value of the dollar will go down. So they're making their overseas bets. They're hiring agents in developing markets, like China and India. They're outsourcing sales jobs so they can identify more potential overseas customers. They're looking for low cost (and hopefully local) sources of supplies and locking in prices for as long as they can. They're building out their web site and communications systems to handle the 24/7 demands of selling and servicing to markets around the world.

Ah yes, the obvious. Right in front of our eyes. Some business owners see it. Others do not. My wife and I saw the obvious a few years ago. That's when we decided to get a dog rather than having another pain-in-the-neck 2-year-old running around.

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