5) Get It In Writing
While it is nice to do business with a handshake, there is no substitute for a well-written contract. Indeed, many contracts are not valid unless they are in written form. The exact number of this type of contract varies between states, but here are a few common examples:
– Sales of goods worth more than $500
– Contracts lasting more than a year
– A transfer of ownership in copyrights or real estate.
While contracts can be valid when orally made, they are much harder to prove and enforce. Make sure you get all agreements in writing, it will save you headaches down the line, and could even save your business.
6) Keep Your Edge
There are many ways to gain a competitive edge over other businesses in your industry, you could have a better product, a more efficient manufacturing or distribution process, a more convenient location, better customer service, or a better understanding of the changing marketplace. The best way to hold onto your competitive edge is to protect your trade secrets. A trade secret is that information that is not known to others that gives you a competitive advantage in the market. There are many kinds of trade secrets, and trade secrets receive legal protection as long as their owners take steps to keep them secret. Those steps could be anything from marking confidential documents to requiring partners and employees to sign nondisclosure agreements. Another way to hold onto your competitive edge is to stay proactive. If you know that your business is going to face challenges or encroachment by a competitor, do not wait to react, plan ahead and you will stay ahead.
7) Hire The Right People
Do not just hire the first person to come along with the basic qualifications you need. Look for someone with motivation, creativity and the right kind of personality to make it in your industry and fit in with your business. Then, once you have found that person, treat them well, engage them and make sure that you create the environment that they will thrive and give their all in. Make sure you create the right kind of employee relationship. Lots of businesses try to save money by hiring people as independent contractors rather than full-time employees. The IRS will impose large penalties on businesses that do not withhold and pay taxes for workers that it considers full-time employees rather than independent contractors. Here are some things the IRS will look at to determine whether a worker is an independent contractor or a full-time employee:
– The worker performs tasks that are essential for your business
– The worker only works for your business
– The worker works 40 hours a week, or nearly 40 hours
– The worker receives instructions and training from you, and you exercise control over how the worker does their job.
Also be sure to create an “at-will” relationship with your employees. Employers can terminate at-will employees for any reason, which is essential if an employee is not working out. There are many ways to make it clear that the employment relationship is at-will, including in employee handbooks and through offer letters. Do not make any promises to employees about the length or terms of their employment, as these could become binding on you later.
8)/Pay Your Bills And Taxes On Time
It should go without saying, but it is important to pay what you owe, especially when dealing with the IRS. The IRS can impose harsh penalties and even come after a business owner’s personal assets if the owner does not remit payroll taxes on time. It is also important to pay your regular debts in a timely fashion. If you get a reputation for stalling on a debt, you could find it difficult to form business relationships in the future. Plus, if you stay current on your debts and pay them as you incur them, it will help you avoid being overwhelmed by cash flow problems if several debts come due simultaneously.
9) Get Your Business Off To A Strong Start: Talk To An Attorney
It should go without saying that entrepreneurs wear many hats but “attorney” shouldn’t be one of them. While you will have to get acquainted with the laws and regulations that will impact your business, sometimes it’s important to leave the details to the professionals. Give your business the best chance at success: contact a small business attorney in your area for help.