Guest post by Eva Rosenberg, author of Small Business Taxes Made Easy.
One of the biggest complaints of business owners is the mound of paperwork that faces us each day. While there are people who find it relaxing (really, there are), most people hate the task and either set it aside, or sit at their desk as their eyes glaze over – and they go into a trance, willing it all to disappear. I understand. Sigh. Sometimes I feel that way, too.
Let Me Tell You a Little Story…
Once upon a time, I worked as a professional headhunter (corporate recruiter – not cannibal). The firm I worked for had printed up pads of worksheets that were about 15 inches x 25 inches filled with 50 rows and about 8 columns. The firm insisted that each headhunter MUST fill out that entire pad every single day with the name, contact information and other useful data of one potential employment candidate or potential employer on each of those 50 lines. As a result, when we walked into the office in the morning, we wouldn’t have to flounder and try to figure out what to do – we could just start making calls on the list immediately. As annoying as this was to those of us having to do it, it was actually brilliant. Not only were we productive, it encouraged us to ask for the referrals from each person we spoke to, even if we couldn’t “close the sale.”
Why Am I Telling You About This?
I used that idea to give you a to-do list every step of the way through Small Business Taxes Made Easy. (Could that be why it won gold – an Axiom Award as the best Business Reference book of 2017?) The first chapter’s To Do List is all about setting up your business. Believe it or not, even if you have been in business for a decade, you’re going to find useful information for your business. Readers tell me that all the time (since this is the third edition).
The main purpose of the Chapter 1 checklist is to help ensure that you set up and comply with all the various federal, state and local licensing and tax filings and reporting.
Many people overlook the local licensing requirements. While you can get away with that for years, there are two drawbacks to that. First, when caught, you face taxes, penalties and interest on prior year fees. Second, if you try to sue someone, you have no standing in court (usually Small Claims) because you are not legally licensed to do business in the area. Customers who understand nuances like this can use that against you to avoid paying you – and it has been done.
By giving you a list of things to do and consider, you can simply review the list and see what applies to you. You don’t need to dream up the steps.
Each item on the list gives you recommendations on where to find the information that may be related to your business – or to resources that can help you. The list includes some things to do that can not only prevent future tax problems – but things that can save you money or time – or increase your profits.
Some Things You May Not Have Thought to Do:
- Have you ever thought of approaching successful people to mentor you? Many people are willing to help, even flattered. Their contacts and guidance can double your profits.
- Have you trademarked your business name? This is very important if you don’t want your business name to be grabbed and used by someone else.
- Did you make sure to get a URL (Internet domain) that is similar to your business? Or pick a business name or DBA that matches a URL you can find – and build brand recognition around that name.
- Are you accepting credit cards? It’s much easier than it used to be – even for a tiny business.
- Have you ever made a business plan? It’s just another checklist – to make it easier to make your business grow. And if you fail, after showing years of losses, it can protect you in case of an IRS audit.
- Re-evaluate all your vendors and sources for your products and supplies at least once a year. Perhaps you can get better deals and better service elsewhere?
As you go through the list, just check off each task as you complete that step – or cross out the things that don’t affect you. Doesn’t that give you a great feeling of closure?