When you go into business for yourself, there is a lot to think about. It is doubtful that even the savviest entrepreneur has the energy, attention, knowledge, and time to handle every aspect of operations. So you focus on the things that seem most important at first, prioritizing wisely as all the business gurus advise.
But it would also be wise to keep in mind the things that cannot be put off or ignored. All too often entrepreneurs are overly-focused on making things happen and insufficiently concerned with preventing legal disaster. As a result, they unwittingly break the law. Let's look at three critical considerations that will help ensure your business is sustainable.
Three Critical Considerations
It can seem like the most important thing is getting your business rolling -- hiring the right people and making money. But you should be attentive at every step or annoying little details can become big headaches with major consequences.
Federal Payroll Tax Deposits: According to Forbes, many new business owners avoid making federal payroll tax deposits in the interest of keeping cash on hand. They view it, reportedly, as an informal loan that will soon be paid, albeit with penalties. It is tax evasion, however, so pay what you owe to the government.
Document Retention Policy: It is one thing to keep your inbox uncluttered and another to illegally dispose of documents. As soon as you begin exchanging with regard to your business, formulate a document retention policy. When you have employees, communicate it clearly. Retaining documents protects your business. In case of a lawsuit, you need to be sure that no one has disposed of a smoking gun or some other critical piece of evidence.
Improper Use of Investor Funds: You got a chunk of money from an enthusiastic investor and you are tempted to spend just a tiny bit of it on yourself. Resist temptation. Investment funds are held in trust, meaning you owe a fiduciary duty to the people who put up the cash to follow ethical standards, truthfully report how the money is used, and to allocate it responsibly. Peeling off a bit for yourself is not only an unsound approach to business but it could get you prosecuted for fraud.
Talk to a Lawyer
If you are just starting your business, talk to a lawyer. It is never too late to get organized and always wise to get ahead of issues. Get guidance.