10 Smart Financial Resolutions for Business Owners Before the Calendar Turns

As the year draws to a close, many business owners find themselves wrapping up projects, closing the books, and preparing for the year ahead. But December isn’t just a time for reflection: it’s one of the most important months for financial strategy.

Here are 10 smart financial resolutions to help business owners finish 2025 with confidence and start the new year from a position of strength.

1. Refresh Your Business Valuation

Even if you’re not planning to sell soon, knowing what your business is worth is essential. A current valuation helps with everything from tax and estate planning to succession discussions. It can also uncover opportunities to improve efficiency, reduce risk, and enhance long-term value.

2. Revisit Your Tax Strategy for a Stable Inclusion Rate

With the capital gains inclusion rate holding steady at 50%, there’s less urgency to crystallize gains, but still good reason to review your position. Consider whether deferring, realizing, or rebalancing gains makes sense for your situation. Planning around the Lifetime Capital Gains Exemption (LCGE), now indexed to $1.25 million, remains a key opportunity.

3. Review Your Compensation Mix

For incorporated owners drawing both salary and dividends, review how you’re compensating yourself. The right balance can optimize your RRSP contribution room, reduce overall taxes, and align your income with future retirement or succession goals.

4. Maximize Registered and Tax-Advantaged Accounts

Before year-end, make sure your RRSP, TFSA, and First Home Savings Account (FHSA) contributions are up to date. Each offers valuable tax sheltering opportunities that can complement your corporate planning and personal investment strategy.

5. Optimize Corporate Surplus and Dividend Planning

If your corporation holds retained earnings, review whether it’s time to extract funds. Strategic dividends, transfers to a holding company, or investments through an Individual Pension Plan (IPP) can all help manage cash efficiently and tax-effectively.

6. Strengthen Your Exit or Succession Strategy

Succession planning isn’t just for owners preparing to retire, it’s a cornerstone of good business governance. Whether your transition will be to family, management, or an external buyer, ensure your corporate structure, share ownership, and valuation strategy are aligned well in advance.

7. Incorporate Philanthropy into Your Year-End Plan

Charitable giving through your corporation can create meaningful impact and tax savings. Donating publicly traded securities can eliminate capital gains tax and create a full deduction for the fair market value of the gift. It’s a smart way to give generously, and efficiently.

8. Reassess Your Insurance and Estate Planning Tools

Life insurance remains a powerful tool for business continuity, liquidity, and estate equalization. Review corporate-owned policies, estate freezes, and shareholder agreements to ensure they’re current, compliant, and aligned with your goals.

9. Meet with Your Advisory Team Before Year-End

Before December 31, meet with your accountant, lawyer, and financial planner to review your corporate and personal tax positions. Coordination across advisors ensures nothing is missed, from trust distributions to income-splitting opportunities.

10. Set Your 2026 Vision: Plan, Don’t React

Economic uncertainty will always exist, but strategy brings stability. Use December to set clear business and personal goals for 2026. Think beyond taxes: consider your investment strategy, legacy goals, and risk management approach for the year ahead.

Final Thought

Year-end planning isn’t just about wrapping things up; it’s about positioning yourself for what’s next. With the capital gains inclusion rate holding steady and inflation showing signs of moderation, Canadian business owners have a valuable opportunity to plan proactively rather than reactively.

If you’re unsure which strategies best fit your situation, connect with your advisory team before year-end. Together, we can help you strengthen your financial foundation for 2026 and beyond.

Disclaimer: This article is for informational purposes only and does not constitute financial, legal, or tax advice. Please consult your financial advisor or qualified tax professional before implementing any strategies discussed.