Because of COVID-19, 76% of businesses are planning on long-term IT changes. It is not enough to have the basics with technology and hope for the best any longer. Small business owners, as well as corporations, need to provide protection online that is worthy of their customer base's trust. The department of IT is not the only area that has been changed by current events. Here are three other things you may want to consider before starting a business in this new era.
Taxes are different
The IRS can audit any business tax returns within three years of filing. The federal government can also collect back taxes owed for up to 10 years. Many business owners start out with full intentions of staying current on their taxes. A lack of knowledge about tax laws coupled with financial shortages, however, can thwart your plans to remain compliant with the rules.
You should consider hiring a bookkeeper from the start when trying to cope with business taxes. The IRS does not provide a clear scope on what items are deductible as well as how you should file taxes if you are a sole proprietorship versus a limited liability company (LLC). A bookkeeper at least has knowledge on how much you should set aside in your monthly earnings for taxes. He, or she, can at minimum help you remain compliant in terms of paying.
Hiring a lawyer is best
Corporate lawyers are typically shunned by small business owners. Not only are these legal professionals generally expensive, but they can also be quite intimidating. Having a lawyer on your side can be helpful for the future. If you are ever in a situation where trade secrets were leaked or your company was illegally sabotaged, you could possibly obtain relief. The three types of relief are compensatory damages, punitive damages, and injunctive relief.
You will need to overcome your fear of an attorney if you want to start your business on the right foot. Corporate lawyers provide guidance on how to establish your company's structure. Not every entrepreneur needs to incorporate their business. You do, however, need to understand the risks associated with sole proprietorship that stretch beyond having to pay the IRS more money every year.
You may have to personally pay for damages caused by your company if you do not incorporate the business or, at a minimum, establish it as a limited liability company (LLC). There is more to paying to incorporate or registering as an LLC, though. A corporate lawyer can walk you through the process of each business structure option, so you are fully aware of what you are getting into before paying for something you may not need.
It is important to note the difficulty associated with deciding to switch from an LLC back to a sole proprietorship if you decide the business structure does not work for your company. Such is even more reason to hire a corporate lawyer from the start to help you establish your company's structure.
Commercial insurance is necessary
Insurance is often something consumers take for granted. You do not realize how much you need auto insurance until after the accident. By the same token, commercial insurance is crucial to your company's financial success.
People who frequent your brick-and-mortar building can file a lawsuit for damages if they suffer an injury at the facility. You need a good insurance plan that pays for medical bills as well as lost wages if a customer falls over a display in your store.
Workers' compensation insurance is also required if you have employees. It is not wise to pay your workers under the table to avoid having to purchase workers' compensation coverage. Such a decision could cost you in the long run as government agencies have the right to heavily fine your company for non-compliance with this law.
Opening your business has been a dream for many years. Consider these facts as you determine a plan to make entrepreneurship your reality.