August has a different rhythm for many businesses. Clients take vacations, schedules loosen up, and things can feel a little quieter before everyone comes back at full speed in September.
For a business owner, that makes late summer a surprisingly useful planning window. You have enough of the year behind you to see what is actually happening in the business, but there is still enough time left to make meaningful changes before year-end.
By December, many decisions become reactive. You are trying to close out the year, deal with tax planning, finish projects, handle employee issues, make purchases, and prepare for January all at once. In August and September, you still have time to step back and ask whether the legal, insurance, financial, and tax pieces of the business are keeping up with everything that has changed.
That is the purpose of the LIFT: Legal, Insurance, Financial & Tax Systems™ approach. Rather than looking at each part of the business in isolation, we look at how they work together, because a decision in one area often has consequences in several others.
Start With What Has Changed in Your Business This Year
Before pulling out an operating agreement or insurance policy, I would start with a much more practical question: What is different about your business today compared with January? The answer usually tells us where we need to look more closely.
Maybe revenue has increased significantly. You may have hired employees, started working with new contractors, added a new service, signed a major client, purchased equipment, taken on debt, brought in a partner, leased new space, or changed the way you pay yourself.
Sometimes the changes seem relatively small while they are happening. Taken together, however, they can leave you operating a very different business from the one your legal documents, insurance policies, and financial systems were originally designed around.
This is why I do not think business planning works particularly well as a series of isolated annual appointments. Your attorney may know your legal documents, your insurance professional knows your policies, your CPA knows the tax returns, and your financial advisor understands your investments and long-term financial goals. The question is whether anyone has looked across those areas and asked whether all of the pieces still fit the business you actually have.
Do Your Legal Documents Still Match the Way You Operate?
Legal documents have a tendency to disappear into a file once they are signed, while the business continues to evolve around them. An agreement that made perfect sense several years ago may no longer address the way the company operates today.
If you have business partners, this is a good time to revisit your operating agreement, shareholder agreement, partnership agreement, or other governing documents. What happens if one owner dies or becomes incapacitated? What if someone wants to leave the business? How is an ownership interest valued, and if there is a buy-sell arrangement, is there a realistic way to fund the purchase?
Those questions become more important as the business grows because the financial stakes increase with it. An agreement created when the company was relatively small may no longer make sense when the value of the business, the owners’ roles, or the company’s financial resources have changed substantially.
The same review applies to the agreements you use in day-to-day operations. If your services, pricing model, employees, contractors, vendors, or client relationships have changed, the contracts supporting those relationships should reflect what you are actually doing now.
I also want business owners to connect their business documents with their personal estate planning. If something happened to you, what would happen to your ownership interest, and would that result be consistent with both your estate plan and the company’s governing documents? If you became incapacitated, we also need to know who would have authority to act for you and how that authority would work within the business.
These are easy issues to postpone because nothing appears wrong when everyone is healthy and getting along. Unfortunately, death, incapacity, ownership disputes, and unexpected departures rarely happen according to a convenient schedule.
Has Your Insurance Kept Up With the Business?
Insurance is another area where growth can quietly create gaps. The policy you bought several years ago may still be perfectly appropriate, but that should be a conclusion reached after a review rather than an assumption.
Since the policy was purchased, the business may have increased its revenue, hired more people, purchased property or equipment, entered into larger contracts, expanded into different services, or taken on risks that did not exist before. Any of those changes can affect whether the coverage you currently have still makes sense.
That does not necessarily mean you need more insurance. It means the coverage should be reviewed against the business as it exists today, including the limits, deductibles, exclusions, endorsements, and types of coverage in place.
Depending on the business, the discussion may include general liability, professional liability, cyber coverage, employment-related coverage, property insurance, business interruption coverage, or policies specific to the company’s particular operations. The appropriate coverage is going to be different for a professional services firm than it is for a construction company, restaurant, manufacturer, or retail business.
For businesses that depend heavily on one or two people, there may also be a conversation about key person insurance. If an owner’s death would trigger a purchase under a buy-sell agreement, that raises a different question about whether there is adequate funding available to complete the buyout.
Those two types of insurance planning should not be confused. Key person insurance is generally intended to protect the business from the economic impact of losing an important person, while insurance used to fund a buy-sell agreement is intended to provide liquidity to purchase an ownership interest. Depending on the circumstances, a business may need one, both, or neither.
Disability deserves attention as well. Business owners often spend much more time planning for what happens if they die than considering what would happen if they were alive but unable to work for six months, a year, or longer. That type of absence can affect both the business and the owner’s family, which is why the insurance discussion should take incapacity into account as well as death.
Insurance is not my job to sell, and I do not try to replace the client’s insurance professional. My role is to recognize where insurance intersects with the legal and business plan so we can make sure the appropriate questions are being addressed by the right advisor.
Know Your Numbers Before You Start Making Year-End Decisions
By late summer, you should have enough financial information to see what kind of year you are actually having. If you do not, getting that information together is a good place to begin.
Business owners sometimes know exactly how much revenue is coming through the door but have a much less precise understanding of profitability, cash flow, outstanding receivables, debt, or how much money they have actually taken out of the business. Those numbers matter when you start making decisions about the rest of the year.
Clean bookkeeping is useful for far more than preparing a tax return. It gives you and your advisors reliable information while there is still time to make decisions based on what is actually happening rather than on assumptions.
If revenue and profitability are significantly higher than expected, that may affect tax projections, retirement planning, compensation, purchases, cash reserves, and distributions. If profitability is lower than expected, you may want to understand why before committing to additional expenses simply because the end of the year is approaching.
I would also look ahead to the beginning of next year. Some businesses have a strong fourth quarter followed by a slower January or February, while others have significant annual expenses that hit early in the year. Looking at those cash needs now can help avoid the situation where a business finishes December with strong revenue on paper but enters January short on available cash.
This financial review does not need to become an elaborate forecasting exercise. The purpose is simply to make sure you have accurate enough information to make intelligent decisions during the remaining months of the year.
Tax Planning Is Far More Useful Before December
Tax planning is one of the strongest reasons to have this conversation before Q4 is well underway. By this point in the year, your CPA has actual year-to-date information to work with and can begin projecting where you are likely to finish.
For calendar-year individuals who are required to make federal estimated tax payments, the third 2026 federal estimated-tax installment is due September 15. California does not use the same allocation as the federal estimated-tax system: under California’s standard individual schedule, 30% of the required annual payment is allocated to April, 40% to June, no payment is generally allocated to the September installment, and the remaining 30% is allocated to January, although individual circumstances can affect the calculation. This is a good example of why California business owners should work with their tax advisors rather than assuming federal and state payment requirements are identical.
More importantly, tax planning at this point in the year should involve more than making an estimated payment. Your CPA may want to look at how much cash should be reserved for taxes, whether withholding or estimated payments should be adjusted, how you are being compensated, whether retirement planning opportunities make sense, and whether planned business expenditures should occur this year or next.
For S corporations, shareholder compensation deserves particular attention. The IRS requires shareholder-employees who perform services for the corporation to receive reasonable compensation for those services and has the authority to reclassify non-wage distributions as wages when appropriate. Rather than discovering a compensation problem during tax preparation, business owners should be discussing compensation with their tax and payroll advisors during the year.
Retirement planning has its own set of rules and deadlines, which differ depending on the type of plan, the business structure, whether there are employees, and the type of contribution being made. This is another area where starting the conversation before December gives the business owner and advisors more time to determine what is available and whether it makes sense.
If the business is considering equipment or other significant purchases, tax treatment can also affect the timing decision. Current federal law provides 100% bonus depreciation for certain qualifying property acquired and placed in service after January 19, 2025, while Section 179 provides another potential avenue for expensing qualifying property subject to its own requirements and limitations. California does not necessarily conform to every federal depreciation rule, so the federal deduction should never be assumed to produce the same California tax result.
None of this means you should rush out and spend money simply to generate a tax deduction. The better approach is to identify purchases and business decisions you already need to make, understand the tax consequences with your CPA, and then decide whether the timing should be this year or next.
The Real Value Is Looking at All Four Areas Together
Legal, insurance, financial, and tax planning sound like separate topics, but business decisions rarely affect only one of them. That overlap is where some of the most important planning issues appear.
Suppose your business has grown substantially this year. That growth may mean the valuation in your buy-sell agreement is outdated, your insurance coverage deserves another look, your projected tax liability has increased, and your cash flow now gives you retirement-planning options that were not practical a few years ago.
Or perhaps you hired employees for the first time. That one change can affect contracts, insurance, payroll, benefits, tax compliance, cash flow, and the overall legal and financial structure of the business.
Looking at only one piece can solve one problem while leaving another completely untouched. It can also lead one advisor to recommend something without realizing that it creates an issue somewhere else in the plan.
This is why I use the LIFT: Legal, Insurance, Financial & Tax Systems™ framework when working with business owners. I am not trying to replace the CPA, financial advisor, insurance professional, or other members of the advisory team. My role is to help identify where the legal planning intersects with those other areas, make sure important questions are being asked, and help coordinate the pieces so the business is not operating with four completely separate plans.
Use the Rest of the Year Intentionally
You do not need to overhaul your entire business before September ends. The purpose of a late-summer review is to identify what actually needs attention while there is still enough of the year left to address it thoughtfully.
Maybe your legal agreements are fine, but your insurance needs to be reviewed. Perhaps the financial records need to be cleaned up before your CPA can give you meaningful tax projections, or the business has grown enough that the buy-sell agreement and your personal estate plan no longer reflect its current value.
It is also entirely possible that everything is in good shape. Confirming that now has value too, because it allows you to head into the final months of the year knowing that the important pieces have actually been reviewed rather than simply assuming they are fine.
I work with California business owners to look at the legal, insurance, financial, and tax systems surrounding the business and identify where those pieces may no longer be working together. Using the LIFT: Legal, Insurance, Financial & Tax Systems™ framework, we also look at how the business fits into the owner’s personal estate plan, because for most business owners, what happens to the business has a direct impact on their family and long-term financial security.
If you would like to take a closer look at your business before year-end, contact us or schedule a 15-minute introductory call. We can identify what deserves attention now and what, if anything, can reasonably wait until next year.