I have grown business to sell. I have grown businesses for passive income. And, unfortunately, I’ve had to shut businesses down. But the one thing I can never get over is the loss that happens with business when someone steals hard-earned income.
Yes, it’s happened to me and mainly because I was too busy to pay attention or to follow up on the red flags I saw. It was a hard lesson, but I finally learned that there are problems that you can’t solve by just throwing more money at them.
There are three main types of people you need to watch out for:
Insider: These are partners, pseudo-partners, employees and independent contractors who take your money, time, materials or ideas.
Outsiders: These are people who drum up reasons to sue you. And trust me, in today’s world, there are a LOT of people who try this scheme. I believe as the drummed-up class warfare and the 1%, 2%, 5%, whatever percentage it is touted as the bad guys escalates, you’re going to have a whole lot more suits. After all, if someone else is to blame for an economic problem, then it not only absolves guilt but it can provide a payday when people settle just to make the problem go away.
Tax Agencies: Make no mistake, taxes are going up. And it’s not just the feds you need to watch. Many states are increasing taxes at staggering rates of increase. And everybody has more auditors.
How do you keep your money? First of all, have a good strategy for each of these three types of theft.
Insiders: In our book “Smart Business Stupid Business” Megan and I gave a lot of suggestions to minimize employee theft. You also need to watch partners. In some ways, a stealing partner can be the worst because you trust the person and might turn a blind eye, figuring there is no reason for a partner to steal from a company he partially owns. But it happens all the time.
Outsiders: There is only one way I know to protect yourself from the stupid lawsuits that are going to come along if you’re successful. Create an asset protection plan and then be careful who you invite into your business. The most painful betrayal I ever had was from a former partner who created all kinds of nonsense lawsuits (or threatened lawsuits). I am happy to say in the end he didn’t get a dime, but wow, there was a financial cost to get there.
Tax Agencies: Get a strategy. Have good records. Properly file your returns.
Let us know if we can help!