Insights From Experts Who Call This Community Home
By Mark Brumbelow, Tax Shareholder, LBMC
Key Takeaways
- Tax planning decisions in 2026 require earlier action.
- AI adoption should focus on practical business improvements.
- Prepared businesses will gain an advantage in M&A activity.
Chattanooga Businesses Are Navigating a Different Kind of Growth
When I moved to Chattanooga to be closer to family, I immediately recognized something remarkable about this city: the business community has a way of navigating complexity with resilience and a kind of quiet confidence.
With 2026 well underway, business leaders across the region are facing a familiar mix of promise and pressure. From shifting tax laws and AI disruption to tight labor markets and deal uncertainty, the same questions echo across boardrooms and kitchen tables:
- “What do we need to be preparing for now?”
- “What can we control?”
- “How do we make smart moves, not reactive ones?”
The reality is that many businesses still believe they have time. In several areas — tax strategy, AI readiness, succession planning, and operational scalability — waiting may quietly become the most expensive decision organizations make in 2026.
At LBMC, we hear these questions every day from privately held companies, middle-market organizations, and high-net-worth families across the Chattanooga region. The insights below are grounded in what businesses here are experiencing right now — not abstract national trends.
Tax Planning Needs Immediate Attention
2026 could usher in one of the largest tax shifts in decades. With provisions from the Tax Cuts & Jobs Act (TCJA) set to expire and new rules emerging under the One Big Beautiful Bill Act (OBBBA), the window for proactive planning is now.
LBMC’s tax professionals recommend revisiting strategies now rather than waiting until year-end. Many businesses built their planning assumptions around rules that may no longer exist a year from now. Companies that revisit structure, deductions, and investment timing early will simply have more options than those forced into year-end reactions.
Areas Businesses and Families Should Review
- Reevaluate gifting, trust, and estate strategies. Changes to exemption amounts may offer favorable wealth transfer options.
- Maximize deductions strategically. Leverage temporarily expanded SALT and standard deductions through donor-advised funds or expense timing.
- Plan capital investments carefully. OBBBA provisions around qualified production property and R&D deductions may create short-term advantages.
Tax planning in a time of change is complex. The businesses gaining the most flexibility right now are the ones treating tax planning as an operational strategy discussion — not a December compliance exercise.
For many leadership teams, the challenge is no longer understanding that change is coming. It is determining which planning decisions deserve attention first.
AI Adoption Should Start With Real Business Problems
For Chattanooga’s manufacturing, logistics, and technology sectors, AI is quickly moving from conversation to operational reality. The gap between organizations experimenting with AI and organizations operationalizing it is widening quickly. In many industries, efficiency gains are already becoming competitive advantages.
But successful AI adoption rarely starts with the technology itself.
Start Small and Build Confidence
LBMC’s AI and Data Strategy professionals recommend focusing first on workflow bottlenecks and repetitive processes. Organizations seeing the most success are:
- Starting with targeted pilot programs
- Prioritizing clean, usable data
- Establishing governance early
- Training employees alongside implementation
The companies seeing the strongest returns are not necessarily spending the most on AI. They are moving earlier, testing faster, and creating internal confidence before competitors do. In many cases, early adopters are already seeing gains in speed, margin protection, and decision-making capacity.
The goal is not workforce reduction. The goal is freeing talented people from repetitive work so they can focus on decisions, relationships, and growth.
AI should make organizations more effective and more human — not less connected.
M&A and Private Equity Activity Is Picking Back Up
LBMC’s Transaction Advisory Services team continues to see strong buyer interest in Chattanooga companies from private equity, strategic acquirers, and family offices.
According to Kim Pace, Director, Transaction Advisory Services, momentum in 2026 will favor companies that prepare now.
What Makes a Business More Attractive to Buyers
- Financial clarity. Clean financials build confidence and streamline diligence.
- Operational scalability. Buyers want proof that systems and talent can sustain growth post-close.
- Valuation alignment. A readiness assessment or quality of earnings analysis can reveal adjustments before buyers do.
- Strategic positioning. Clearly articulating differentiators — client base, IP, or niche — commands a premium.
- Leadership continuity. Keeping key people engaged through transition reduces perceived risk.
Many business owners still wait until a transaction opportunity appears before assessing readiness. By then, negotiating leverage is often already reduced.
“In this market, preparation directly impacts valuation,” says Pace. “Businesses that invest in readiness before going to market typically move faster, negotiate from a stronger position, and create more buyer confidence.”
Buyers have become significantly more selective. Strong businesses still attract capital, but gaps in reporting, leadership continuity, or operational scalability are being identified earlier — and priced accordingly.
Wealth Transfer Planning Is Becoming More Complex
For Chattanooga’s long-established families, wealth transfer and legacy planning have become increasingly nuanced. Families are balancing more than tax efficiency. They are trying to preserve flexibility, minimize future conflict, and prepare the next generation for leadership and stewardship responsibilities.
Nicole Jeppesen, Tax Shareholder, High Net Wealth, LBMC’s private client specialist, encourages families to evaluate their current environment.
Key Areas High-Net-Worth Families Should Revisit
- Trust structures and timing of wealth transfers
- Charitable giving strategies
- Insurance and asset protection
- Integrated tax and investment planning
Early action provides flexibility in the face of future legislative change. Waiting for legislative certainty may feel safer, but it often limits planning opportunities that are only available before changes occur.
Prepared Leadership Will Define 2026
From start-up to succession, one theme stands out — 2026 will reward prepared, community-minded leadership. We believe strong businesses strengthen communities. Many organizations are discovering that traditional compliance relationships are no longer enough. Leadership teams increasingly need advisors who can connect tax strategy, operational scalability, technology, cybersecurity, transaction readiness, and long-term growth planning in one coordinated conversation. The businesses that outperform in 2026 likely will not be the ones reacting fastest. They will be the ones that prepared earlier, invested intentionally, and built the operational capacity to move decisively when opportunities appear.
Originally published in Chattanooga Edge Magazine
Content provided by Mark Brumbelow, Tax Shareholder in LBMC’s Chattanooga Office. Contact him at mark.brumbelow@lbmc.com.
LBMC tax tips are provided as an informational and educational service for clients and friends of the firm. The communication is high-level and should not be considered as legal or tax advice to take any specific action. Individuals should consult with their personal tax or legal advisors before making any tax or legal-related decisions. In addition, the information and data presented are based on sources believed to be reliable, but we do not guarantee their accuracy or completeness. The information is current as of the date indicated and is subject to change without notice.
