Adrian Mastracci, president of fee-only KCM Wealth Management, says "Perhaps, consider my AAA approach: assess, analyze and adopt. That is, assess the future prospects, analyze the present blueprint and adopt the necessary changes."

For Immediate Release

Vancouver, B.C. (November 12, 2002): Conducting an in-depth scrutiny of the business enterprise is a worthy effort.

Adrian Mastracci, president and investment counsel with Vancouver’s fee-only KCM Wealth Management, comments, “Some business plans have veered off course. Perhaps, they need a little refreshing or a second opinion. Accordingly, it may be useful to brainstorm with your professional advisors.”

“A business plan review is about ensuring that the action plan is on target,” indicates Mastracci, “Many businesses, large and small, private and public, continue to endure the fear and uncertainty so prevalent in the past couple of years.”

“Reflect on your progress. Scrutinize what you’re doing,” outlines Mastracci, “Just because something works today doesn't necessarily mean it will perform tomorrow.”

“Make time to contemplate what you would like to achieve,” points out Mastracci, “If the core business plan is appropriate, some small tweaks will keep you on track.”

“Owner/managers who focus on policies and strategies make better decisions,” says Mastracci, “They are also rewarded with results more in keeping with expectations.”

“Perhaps, consider my AAA approach: assess, analyze and adopt,” explains Mastracci, “That is, assess the future prospects, analyze the present blueprint and adopt the necessary changes.”

Mastracci offers these ideas for business owners:

Find a mentor
Find a mentor for your business. Someone to bounce ideas at. Someone with a wide perspective. Someone who can filter different points review and relate them to what you're trying to do. Someone with imagination. That someone can be a terrific sounding board.

Business plan
Fine tune the business plan. You do have one, of course. Start by revisiting your business goals. Followed by where your industry is headed. Be realistic and ascertain if what you're doing today will still get you there tomorrow. Wrap it up with what you have to do to maintain success.

Business structure
The business structure may not be appropriate. Perhaps you have a proprietorship, a partnership, an incorporated company, or a complex set of holding companies. Revisit the business reasons for having what you have. Inquire if you can improve the business by doing something different.

Succession planning
Reflect on the financial ramifications and who will step in if there is a disability, retirement or death. Begin the process that identifies competent management to guide the business. Transferring the reins to a family member may also fit in. Prepare your vision for the business succession. This is one of the best investments you can make.

Estate freezing
As you wrestle with succession planning, ask whether it makes sense to consider some form of estate freeze for the business assets. If warranted, this can be expanded to other assets owned.

Management remuneration
Review the remuneration of owners and key management. Consider the affects of a mix of salary, dividends and a sprinkling of stock options.

Disability & key person coverage
An area too often overlooked is disability coverage for the owner/manager. A long-term disability can have devastating results. Also, review key person coverage for important personnel.

$500,000 capital gain exemption
Analyze whether crystallization of your business or operating farm qualifies for the $500,000 capital gain exemption. The full exemption can save $109,250 of taxes at the BC rates.

Selling one business, buying another
Owners that sell an eligible small business and buy another should review the potential to defer the tax on up to $2,000,000 of capital gain on the business being sold.

$200,000 small business limit
Pay attention to the rate of tax on the first $200,000 of qualifying business income. Many provincial jurisdictions also have a lower rate of tax on qualifying income in excess of $200,000. For example, British Columbia recently extended the low rate of tax on the first $300,000 of qualifying income. A bulletin was recently issued on this matter.

Managers as owners
Consider whether it is appropriate and beneficial for management to be shareholders of the enterprise they are entrusted to guide. Review the arrangements to sell shares to key executives, especially in private companies. Managers that own a piece of the rock think differently.

Loans to employees and shareholders
Businesses can make loans, at the prescribed rate, to employees and shareholders. The rules are involved; therefore, seek professional counsel. Moreover, ensure that an existing shareholder loan will not be included in your income if you’re approaching the second fiscal year end since it was issued.

Corporate interest deductibility
Get to know the new 18 interest deductibility proposals from the tax authorities. For example, you may need to revisit borrowing strategy to pay dividends or make shareholder loans. See my web site at www.kcmwealth.com/Perspectives/2002/101502.shtml for the recent newsletter.

NOTE: The information provided above is intended for general informational purposes only. It does not constitute advice for anyone's specific situation. Everyone should always first consult directly with their advisors to determine the appropriateness of any information contained above before taking any action. KCM Wealth Management Inc. assumes no responsibility for any loss or damage arising from the use of, or reliance upon the above information.