The Greater Palm Springs economy is dynamic, with the business environment here filled with opportunities, but it also faces unique regional considerations in travel and visitor-driven demand, as well as a concentration in hospitality, health care and professional services.
How can area business owners plan for 2026 and beyond, considering the dynamic, constantly evolving landscape? Here are five strategies to consider with year-end quickly approaching.
- Separately assess business and personal finances.
Year-end offers an opportunity to step back and evaluate one’s current business and personal financial positions. With a strong tourism-driven market in Palm Springs, cash flow patterns can shift quickly, and having a clear picture is critical.
Consider assessing your personal and business assets separately, and in particular, the following for each –
- Cash-flow trends through the year: including seasonal fluctuations and what you might need in the coming year.
- Liquidity: assets you are likely to require for immediate needs. They can be held in cash, money markets, treasuries, and fixed income vehicles that can be more easily converted to address expenses, downturns, or to pursue new opportunities.
- Longevity: what your business might need to sustain growth or handle transitions over the longer term. This can include savings, investments in equities, etc., to cover financial needs for the next two to ten years. These assets are important to ensure a “buffer” to help insure against risks such as market volatility, unexpected medical expenses, and other longer-term expenses. Having awareness of and access to longer-term assets is important in being able to help overcome changing market conditions and in planning for selling a business or retirement.
- Legacy: what you wish to leave to the next generation or to give back to others. In examining and determining your legacy strategy, business owners may be able to gain greater control over their financial futures and what they are able to leave to others, through planning and growth-oriented strategies. You may also want to consider timing donations for tax efficiency, while also supporting philanthropic goals.
Business owners should consider their personal and business balance sheets separately based on the above three factors. When it comes to personal finances, longevity and legacy might be most important. On the business side, liquidity should often have the greater focus.
A good rule of thumb for business owners is to have about two to three years’ worth of expenditures in liquid assets on average for their businesses. For personal expenses and needs, they may want to have enough savings for two to three years as well
2. Diversify holdings.
A large share of many entrepreneurs’ wealth is tied to their businesses. However, too much exposure in one’s business(es) can expose an owner to risks from concentration in one industry.
Consider ways you might diversify –
- Review your portfolio and consider how much of your net worth is not related to the business. How much is in stocks, bonds, alternate investments outside of your business, versus those that are tied to your business?
- Consider allocations in other sectors, investments and geographies that are not correlated with your business.
- With many businesses in Greater Palm Springs often facing seasonal or tourism-driven volatility, seek to ensure that there is ample liquidity and cash reserves for fluctuations. Overall, business owners should hold more liquidity than average investors. A business is an asset that can also present a lot of risk. Hence, it is important for business owners to hold more liquidity overall.
- This is a good time to also consult with your financial advisor to review current financial allocations alongside changes in your business that may have exposed you to new risks. An advisor can work with you to assess if you are too heavily exposed in one area or sector over others and to create a plan to help to diversify. Often a mix of stocks, bonds, and even some alternative investments, which might gain value when the stock market drops, can provide diversification options.
- Get ready for taxes.
Whether your business is an S-Corp, C-Corp, partnership, or sole proprietorship, it is important to engage with a professional and review entity structure, deductions, timing, and opportunities earlier, rather than later. Having more time is important to be able to implement strategies and avoid surprises.
Business owners might –
- Review capital gains and losses. For instance, if you own commercial property or vacation-rental assets that may generate gains or allow losses, timing these might impact your personal and business tax positions.
- Make sure the current business structure is optimal, given the growth or changes that your organization has experienced this year. If you added employees, increased or decreased revenue, acquired assets—these might all be taken into consideration on whether your current structure still is the best one.
- Assess potential deductions. For instance, you might want to consider whether you qualify for the Qualified Business Income (QBI) deduction or may want to consider Qualified Small Business Stock (QSBS) options. Working with a professional can help business owners to understand rules around these, including proceeds, tax-deferral and eligibility or exclusion.
- If you haven’t already, you might consider establishing a SEP IRA, Solo 401(k), or SIMPLE IRA and potential tax-deductible contributions that you might make this year.
- Additionally, if you are planning to sell your business within a five year window, you might want to reach out to a tax professional and your financial advisor for feedback on how to best get ahead of potential financial gains and consider how to offset capital gains from a tax standpoint.
- Finally, determining what should be left on the company balance sheet versus the personal balance sheet is another important consideration that tax professionals should be able to assist with.
- Look to the future.
Given the pace of change, increasing customer expectations, and tighter margins in many industries, business owners need to be constantly innovating.
At UBS, we see AI as one tool with potential. AI adoption rates were 9.2% in the second quarter of 2025, up from 7.4% the previous quarter, and 5.7% from the last quarter of 2024. At this pace, AI adoption is anticipated to soon reach the 10% threshold that took US e-commerce 24 years to reach. In industries from tourism, to healthcare, real estate and financial services, AI presents opportunities to scale and disrupt industries.
How might AI advance aspects of your business? From accelerating training, research, and operations, or simply gaining insights? Simultaneously, how can you ensure governance and controls to safeguard privacy and customer, employee and stakeholder information privacy? These are questions for every business owner to consider.
5. Consider plans for exit and retirement.
End of year is also a good time to reflect on wishes for your business and retirement.
- What do I most want to accomplish in my lifetime personally and through my business?
- What do I want for my organization in the next 3-5 years? Growth, sale, transition, new investment? If a sale or transition is of interest, is there a potential path to transition the business to heirs, employees or others?
- What do I wish to leave to my family, community, employees or the local area?
- How can I achieve this?
Many business owners underestimate the length of time and breadth of factors involved in the sale of a business. For those business owners looking to transition from their businesses in the next three to five years or less, it is important to start talking with a financial advisor early. Long-term planning can be a critical aspect of a successful sale. Meeting with advisors early on may also provide more time to employ strategies to maximize proceeds from a sale on an after-tax basis.
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Pat Lizza, CRPC™, CRPS™ is a Financial Advisor and member of Aligned Wealth Partners at UBS Financial Services Inc. a subsidiary of UBS Group AG. Member FINRA/SIPC in Indian Wells, California. The information contained in this article is not a solicitation to purchase or sell investments. Any information presented is general in nature and not intended to provide individually tailored investment advice. The strategies and/or investments referenced may not be suitable for all investors as the appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives. Investing involves risks and there is always the potential of losing money when you invest. The views expressed herein are those of the author and may not necessarily reflect the views of UBS Financial Services Inc. Neither UBS Financial Services Inc. nor its employees (including its Financial Advisors) provide tax or legal advice. You should consult with your legal counsel and/or your accountant or tax professional regarding the legal or tax implications of a particular suggestion, strategy or investment, including any estate planning strategies, before you invest or implement Pat is also a Certified Exit Planning Advisor®. Prior to UBS, Pat spent 17 years in the high end hospitality industry. He can be reached at pat.lizza@ubs.com
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