There are a lot of things you should think about before running a business, such as the success of your product, whether or not anyone would want to buy it, and how much money you might make. However, if you don’t know what taxes are and which kind of do’s and don’ts there are when it comes to hiring employees, then you’re running in the dark. This brief guide will help with all those basics.
When starting a successful business without any knowledge of tax law or how to hire employees, this guide will serve as an overview of all the basic mistakes that can cost your startup thousands.
1. Business Insurance
When you start a business, you will need the proper insurance to protect all your business assets and activities. Business insurance protects your company from lawsuits, theft, property damage, and more. Your business is an asset that needs to be protected, and business insurance offers you a wide array of legal coverage you would otherwise not have. For more information, visit kbdinsurance.com.
2. Contracts
You will have to draft contracts for every type of employee or service provider you employ. All contracts should include information regarding employee wages/salaries/welcome bonuses, if applicable, as well as benefits, such as medical care or paid time off, if the job provides such things. Depending on the industry your business is in, there are going to be other types of contracts you need to draft as well.
3. Payroll
The most important part of running a business is making sure that your employees are properly trained, supervised, and compensated. It’s also very important to understand the laws and regulations relating to payroll taxes. You should also be aware of any payroll benefits such as insurance or pensions offered by your company. One of the best ways to make sure you comply with all the laws and pay your employees proper wages is by conducting an audit annually.
4. Banking
To present a good image for your business in front of the public, it’s best if you keep good records. Do not use your personal accounts or the accounts of the business entity to pay for the business expenses if you are a sole proprietor. You should set up separate bank accounts and keep accurate records of all transactions. When a transaction is completed, it should be recorded in a general ledger and then posted to the appropriate subsidiary asset account.
5. Payroll Taxes
Filing payroll tax is also something that every business owner must follow if they want to avoid being audited. Failure to file payroll taxes can result in penalties or even jail time for a business owner or an employee. There are multiple payroll tax programs available to help startups get off to a good start and avoid penalties or problems.
Starting a business may be the hardest thing you do in your life, but it can also make you wealthy if you have the right knowledge and know-how of what to do and what not to do in business. You should always consult with a trusted professional before making any decisions regarding your business or taxes.
