Those who have a large taxable gain from the sale of a stock, asset, or business and who would like to defer that gain with the possibility of excluding some of it from taxation should investigate a new investment called a qualified opportunity fund (QOF), which was created as part of the recent tax reform.
The process of starting a small business can be an arduous one; there are numerous steps that need to be taken — and often in a precise order — to legally establish a business. As a result, the process can be overwhelming. Unfortunately, it’s also easy to overlook some important details and steps along the way. By being aware of a few of the most common legal and compliance mistakes made by small business owners when starting out, you can be better prepared for future success.
- Misclassifying Employees as Independent Contractors
Regulators are coming down hard on misclassifications. The IRS estimates that this problem includes millions of workers. It is best to talk this through with an expert, but you can get some background on the guidelines at the United States Department of Labor website.
- Choosing the Wrong Business Structure
One of the first major decisions you’ll need to make in regards to your small business is the type of business structure you will select. This can range anywhere from a basic sole proprietorship (which doesn’t require any special forms or paperwork) to a more complex structure, such as a corporation or LLC. Keep in mind that different types of business structures offer different tax benefits and other protections, so it’s important to thoroughly explore your options and select the structure that’s best for your unique needs. You’ll also need to go through the legal process of establishing your business under your desired structure, which may require help from a legal or other type of professional.
- Failing to Apply for an Employer Identification Number
Unless you plan on operating your business strictly as a sole proprietorship (in which case, you will use your personal Social Security number when filing taxes), you’ll also need to apply for a unique Employer Identification Number (EIN). This number will be specifically associated with your business, and it can be helpful to think of it as a business Social Security number of sorts; it’s used to file your business taxes, open up dedicated business bank accounts, and the like.
- Overlooking Important Permits and Licenses
Depending on the specific industry in which your business will be operating and your location, you may also be required to obtain specialized licenses and/or permits in order to legally operate. Otherwise, you’ll run the risk of being shut down or finding yourself in serious legal trouble down the road. Take some time to research the specific types of permits or licenses that you may need to obtain, as well as the steps you’ll need to take in order to acquire them. Sometimes, this process can be time-consuming and even costly, so it’s not something you’ll want to put off until the last minute.
- Not Knowing When to Speak to a Professional
When starting up a small business, it’s not uncommon to run a one-man (or woman) operation. After all, you may not have the cash flow or even the need to hire outside help in the early stages. Still, when it comes to making sure your business is squared away from a legal/compliance standpoint, it can certainly be worth the money to consult with tax and accounting professionals early in the game. You don’t necessarily need to onboard these experts full-time, but being able to turn to them for advice and guidance when you need it will help you avoid serious legal issues later on.
- Putting Off Domain Name Registration
As soon as you have your business name picked out and registered, it’s also in your best interest to go ahead and register your website domain as soon as possible. Even if you don’t plan on setting up and launching your website any time soon, domain names are cheap, and having yours registered now will help you avoid a situation where the domain name you want is taken by somebody else later on.
- Lack of a Comprehensive Business Plan
One of the biggest mistakes small business owners make when first starting out is that of not having a well thought-out and articulated business plan. A business plan is an important document that outlines in detail what your goals for your business are and how you will achieve them. This document is important not just for you and other members of your immediate team, but for potential investors as well. Should you seek financing for your company at any point, an investor is going to want to see and scrutinize your business plan — and it will likely have a major impact on the final decision.
- Not Having Finances Squared Away
Another common mistake new business owners make is that of poor financial planning, which can lead to a lack of funding to get you through your first months successfully. Ideally, you’ll want to make sure your business plan accounts for all the company-related expenses you’ll incur during the first year of operation, as well as any personal expenses as well. Unfortunately, this is something that many small business owners overlook or miscalculate with disastrous results. The easiest way to avoid this mistake is to consult with a small business accountant during the early stages of drafting your business plan.
- Failing to File Patents on Products or Ideas
It’s (hopefully) no surprise that you’ll want to be proactive about filing for patents for any unique products, prototypes or designs you may have. However, what many small business owners first starting out don’t realize is that they’ll also want to file patents on ideas, such as intellectual property, that could otherwise be stolen or copied and used by other entrepreneurs. After all, intellectual property can be just as valuable as a product prototype — so you’ll want to plan and protect these kinds of ideas accordingly.
Be careful to also avoid the mistake of waiting too long to file for relevant patents; the process can often be long and drawn out, so getting started as early as possible will be in your best interest.
- Being Blind to Important Compliance Requirements
Last, but not least, make sure you’re aware of any and all compliance requirements that may apply to your business based on its structure, location, industry or other factors. For example, even if you’re keeping things “simple” by operating as a sole proprietorship, you’re going to be required to file and pay quarterly estimated taxes under that structure. Failing to meet compliance and other requirements can result in serious legal trouble, including fines and penalties, down the road.
When it comes to compliance requirements, such as annual reporting and tax filing, it’s always a good idea to keep a calendar of important dates, so you don’t forget anything. After all, you’ll have enough deadlines to worry about and remember on your own — especially during that first year of business operation. This is yet another situation where having a compliance expert, such as a tax or accounting professional, can really come in handy. He or she can assist you with annual compliance reviews, reminders on impending deadlines and the like.
From selecting a name and business structure to making sure your small business remains in compliance at all times, there are, unfortunately, a lot of opportunities to make mistakes as a new business owner. By keeping this information in mind and by working alongside the right types of professionals as you prepare to launch your new business, hopefully, you’ll be able to avoid these issues. From there, you can maximize your chances for success in the first year of operation and beyond.
Isler Northwest LLC is a firm of certified public accountants and business advisors based in Portland, Oregon. Our local, regional, and global resources, our expertise, and our emphasis on innovative solutions and continuity create value for our clients. Our service goals at Isler Northwest is to earn our clients trust as their primary business and financial advisors.
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Building a business is a process that requires careful attention to many individual points, all with the goal of increasing customers, improving products, and building profit. There are many elements that contribute to the ability of a company to grow. One key area to focus on is the budget. From the foundation of the business, a well-planned budget can create a financially sound business with clear directions. To achieve that, consider these nine key ways to create an effective budget that spurs and guides the growth of your company. Read more
Article Found on Knowridge Science Report
Few companies or organizations are looking to fail when they plot a new strategy. However, turning a blind eye to the possibility that a strategy may fail can have disastrous consequences.
According to Rita McGrath, a professor at Columbia Business School and leading expert on strategy and disruption, there is an “intelligent way of failing” that can leave organizations stronger.
Professor Rita McGrath, Faculty Director and Associate Professor of Management at Columbia Business School, concluded that with a strategic approach, you can use failing work to your advantage. Failure doesn’t have to be a setback. When learning from it, it can point you in the right direction. Read more
Article By Andrew Griffiths | Found on Inc.com
In business most of us are pretty good at allocating money for the bills, things that have to be paid, perhaps buying new equipment, new resources to use around the office, staff training and all kinds of fairly tangible expenses (as much as we might not enjoy paying them each month). But how much do we allocate each week/month/year for our own personal growth and development?
If we don’t budget for these things, it may be because we don’t see any value in them. One thing I’ve learned over the years is that the success of a business really is directly related to the state of mind of the person in charge. And we need to do everything we can to make sure our state of mind is as good as it can be, all of the time. Read more
Article by Laura Shin | Found on Forbes
Fueled by speculation that a bitcoin ETF could be approved by the Securities and Exchange Commission in the next week or so, the price of bitcoin has risen steadily, finally surpassing the cost of an ounce of gold on Thursday.
The market capitalization of all outstanding bitcoin also surpassed $20 billion for the first time in bitcoin’s history, according to Coinmarketcap.
The SEC is expected to make a decision on a bitcoin ETF proposed by Tyler and Cameron Winklevoss, the former Olympians who now run the cryptocurrency exchange Gemini and venture fund Winklevoss Capital, by March 11.
Article by Derek Shoettle | Found on INC.COM
It’s natural to assume major players, from Salesforce to Facebook, will always have the advantage over the little guys. But even those two giants started small and had to battle larger companies on their own path–think Oracle for the former, and every single social media website (e.g. MySpace) for the latter.
Figuring out how to play ball with these larger companies can accelerate the path to growth–and one day becoming a larger industry player yourself. In understanding how these companies accomplished it, you can set yourself up for success even in markets with seemingly unassailable incumbents.
By Quora | Found on INC.COM
You’ve heard of people like Elon Musk and Jeff Immelt (General Electric CEO). Reading about them leads us to assume that business greatness requires little sleep and even less time with loved ones. Immelt, for example, has worked.
But is that the true way to reach success? To sacrifice everything else in your life, from your health to your relationships, just to achieve career success?
There is a better way.
Article by John White | Featured on INC.COM
Before I invested in my personal brand, I was in a field I no longer liked and working for a company that didn’t listen to a single one of my ideas, EVER. I was in a major career slump, and I needed to pivot in a big way. I decided that going all in on developing my personal brand was the way to get back to doing something where I felt fulfilled and challenged. Now, I run my own social media marketing company, and I wake up every day excited to be investing in my future.
Recently, I’ve had some conversations with several people online that insisted that they don’t have a personal brand. What I told them is that whether they like it or not, if they’re in business they have a reputation. Today, that reputation extends online.
It’s up to you on how you manage that reputation. Those that are serious about their reputation are using social media to grow their business and used their personal brand to become influential in their field.
Consumers have been over-marketed to by companies, and they have become resistant to many traditional forms of advertising. Research shows that people are now more likely to be influenced by individuals more than organizational marketing. Thus, it’s more important than ever to have a personal brand.
Here are the eight life changing steps I took to use my personal brand to help me pivot into doing something I love for a living:
Apple is planning a large-scale expansion of its Prineville, Oregon data center, according to The Oregonian. The report claims Apple is likely to expand upon its current 338,000-square-foot data center with a matching facility and massive solar array this year, after Oregon governor Kate Brown signed a tax bill last week that will exempt Apple and other tech companies from facing millions of dollars in additional property taxes.