As 2013 ended, many business owners scrambled to finish the last minute necessities. Now that 2014 has arrived, however, it is time to do a check up of your business and ensure that everything is up to date. To reduce the stress of that task, here is a list of seven major activities you should check up on before proceeding any further into the year.
1. Speak with an insurance representative about any potential insurance needed for your business.
Do you run a restaurant? How about a copywriting business? The majority of businesses need insurance, but far too few have it. In the event that a patron or client were to be injured while at your business, you could be held accountable for that injury and face lawsuits. An insurance representative can inform you of the various types of insurance available for your business and what the best plan might be for you, to make sure that you are fully protected against lawsuits. If you run any sort of business that delivers products or services, look at the possibility of errors and omissions insurance - these policies protect the business and the business owner against lawsuits for a faulty or under-peforming product.
2. Evaluate your estimated tax payment.
The IRS is not accepting tax filings until January 27 of 2014; however, you should know roughly the amount you will have to pay. This allows you to set aside the necessary funds to cover the taxes and prevent a financial crunch, or worse, late fees. You should also be aware of any lapses in your record keeping that might result in an audit, and prepare yourself for the possibility of answering to the IRS. While the matters are usually minor, it can be time consuming and stressful; having all the necessary documentation prepared beforehand can make the entire process flow more smoothly.
3. Examine your business structure.
If you are not yet incorporated, do you need to be? If you run a freelance business, should you form an LLC? The benefits of doing so means that, in the event of a lawsuit, the business itself can be sued - your personal assets are not on the line. However, a business owner who has not incorporated can be held personally liable in the event of a lawsuit, for all of his assets. These include his home, his vehicle, and more. Not all businesses need to incorporate, but it is important to be aware of the risks and know when the time is right.
4. Make sure all permits are up to date.
If you own a local restaurant or other business that requires specific permits, make sure they are up to date. Liquor licenses, health permits, professional licenses, and more all have expiration dates that can easily pass by unnoticed. If found in violation of any of these permits, you can face substantial fines, or even have the business shut down in the worst case scenarios. Take the time to review the paperwork and ensure that all of these permits are up to date and viable to prevent this from occurring.
5. Register your business name.
If you haven’t been in business long, then you should ensure that your business name is not taken. If you form an LLC, then the name is automatically registered; however, you can also file a DBA - a "Doing Business As" — which prevents anyone else from using your business name and legally enables you to conduct business under that title. However, a DBA does not stop anyone in the other 49 states from using your name. Trademark protection can be claimed to protect your name across the entire country, though.
6. Know the employer laws.
Two things change every year, without fail: tax laws and employer laws. Stay up to date on both of these, and you’ll live with much less stress. In the event that your business is expanding and you feel the need to hire an employee, brush up on employer laws to make sure you are in compliance. Failure to do so can result in fines, or open you up to litigation on part of the employee.
7. File your annual income report.
This only applies for LLCs and other incorporated businesses. If you haven’t filed your income report for 2013 yet, make sure to do so. The deadline for filing varies, and is largely dependent upon the state you conduct business in. Failure to meet this deadline can result in penalties and late fees, some of which are rather large. The result should include your total income for the year, broken down into profit margins, net loss, and net gain.
James Daniel writes for Insureon, which has created Insurance University to help business owners with their insurance needs.