This late October Saturday morning, I woke up with a shock: Had I failed to consider the tax implications or a major business redesign that has been in the crucial planning stages for the last three months, and has been a concept for future “to do” measures for more than eight years?
We had reached the point where, in informal conversations, all of the individuals and organizations involved (there are several) had agreed to the concept, and the numbers all seemed to add up as a truly positive and creative solution to a multi-year problem.
The lawyers had prepared the first draft of the agreement and, with some technical updates, I thought we would be ready to go this week.
Then the figurative ball flew in from left field — at least in my mind. What does this do to our business and my personal taxes? Will I face a major tax bill for what would in effect be phantom income?
There’s sill time to check out the situation with the accountants. Maybe there are no serious implications, or there could be ways to mitigate them. I’m thankful at least that I realized the question now, and not after I had set things in motion and ended up with a nasty business surprise.
I cite this example to show how there can be unintended and surprising consequences whenever we try anything major — and of course that sometimes these problems seemingly arise out of nowhere.
As an example, your brand new marketing campaign might awaken a sleeping giant in a competitor you hadn’t known; or you might discover that your success in winning a major commission/project results serious business overload where you lack the staff and capital to fulfill your responsibilities. Or, as you can see from this story, your creative business initiative could trigger some truly unwelcome taxes.
The best way to deal with these problems, in my opinion, is to review them before they happen. It never hurts to take a sober second look at any initiative or project and interpret some of the risks that might not seem obvious at the outset.
Of course, that doesn’t mean you should bury yourself with fear to act/respond. If you try to avoid all risk in any decision, you’ll do nothing, and go nowhere.
I expect my business plan will go forward — but I’m thankful that I woke up with the shock this morning and realized there was at least one more box to check before pushing forward. Yes, in business, we should go forward boldly, but always with awareness of the surprises that could mess up with our visions.