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Rewarding Yourself and Your Best Employees with a Split Dollar Plan

To be successful in today’s competitive business environment, business owners need to understand far more than just the products they sell and the services they offer. They need to be marketing specialists, human resource managers, public relations experts, and sometimes, even the cleaning service. They need to keep their key employees happy and productive.  And if they want to remain successful, they need to be both long-range planners and sound money managers.     But that’s not breaking news. As the owner of a small business or professional practice, you’ve known all of that – and probably taken on all of those roles – for years. But what you may not know is that, under current tax law, there are a variety of planning and money management strat- egies available that can lessen the amount of time you spend playing different roles, and increase the amount of time you spend focusing on your business.   One such strategy involves using dollars from your business or practice to pay for personal life insurance protection on you or select key employees. Commonly known as a “Split Dollar Plan,” this strategy allows you to pay for your personal life insurance with business dollars, or create an arrangement to share the cost and benefits of a life insurance policy on your key employees to whom you want to extend an extra benefit. When...

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Eight Tips for Maintaining Working Capital

Is your business ready for its next big opportunity? If you answered “yes” based on your experience, know-how, or sheer enthusiasm, don’t forget the one thing that can trump them all: cash. Often, the cash to hire, buy necessary equipment, and cover other startup expenses can make all the difference between a great opportunity and a missed opportunity.   So that you can be ready for the next big break that comes your way, help create sufficient working capital with these tips for taking control of your business’s cash flow.   Know where you stand. When it comes to cash flow, knowledge is power. Cash flow crunches don’t appear out of nowhere and they can often be spotted—and avoided—by knowing exactly where you stand with a cash flow statement. Income statements show sales, expenses, and profits at a given moment, but cash flow statements show the movement of money in and out of your business over a specific period of time. This will help you see whether you’re building or draining working capital.   Actively manage outflows. You’re in control of accounts payable, so don’t let spending run on autopilot. When cash is tight, delay payments as much as possible, but without paying late. Using charge cards to cover purchases is one option, but you can also consider bartering for goods or services, or using points and miles from...

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