Running a successful business usually means juggling a couple of balls at the same time. Clients, employees, facility and equipment management, cash flow and so many more. Sometimes the balls get very heavy, they catch fire, or even explode… Chances are, from time to time, some balls are going to drop.
There is no denying that. But amongst all of those obligations you have as a business owner, there is one that you always have to keep in mind. The ball that can’t be dropped represents your obligations to the law, as well as your taxes.
Keeping your business in check with the tax regulations requires a lot of resources, but not nearly as many as making a mistake does. Although failing at, for example, marketing strategy or a new product can hurt your business, not keeping in line with the tax regulations can have fatal consequences for your business.
Although this matter carries great importance, it’s neither easy nor simple. For this reason, we came up with a short guide on how to make sure that your business is following all of the guidelines and procedures, and that you are not paying more than you should. So, let’s get started!
Start by Checking Which Regulations Apply for Your Business
In order to figure out which taxes apply to you, you need to start with your business structure. A sole proprietorship, a corporation, an LLC… Choosing your business structure will determine which tax regulations apply to your business, so that is a pretty big step. If you end up choosing LLC as your best option, you should definitely do your research on what is an LLC operating agreement and how to properly formulate it.
Once that issue has been taken care of, you need to figure out the types of taxes, as well as tax returns your business is eligible for. If you are creating makeup products, you should pay attention to the environmental laws as well. If you do business with international clients, you need to take a look at regulations for the export of product and services. If your employees are diverse and multicultural, certain reliefs might be available to you.
Regardless of what your business is, there are still some taxes that are universal, such as income tax. But even then, there are some differences between businesses and industries, and you should pay attention to that as well.
Make Sure That Your Staff Knows as Much as You Do, If Not More
Even if you know all there is to know about taxes, you won’t be able to control every single part of your business. This is especially true if your business has a lot of employees, in different locations, or even working in different time zones. In case your business is international, that only further complicates the issue. So, what is the best way to handle it?
Well, first of all, you can’t, and shouldn’t have all the answers. Your employees should know just as much, if not more. The departments of your company dealing with finances, accounting, and legal matters should be the most knowledgeable in this matter. Not only do they need to have a solid base, but they also need to keep track of all the latest changes in tax laws, so nothing catches them off guard.
The rest of your workforce doesn’t need to have all the answers, but giving them a basic education isn’t going to hurt. Educating your employees in all matters related to your business will only help you create a sense of ownership that will result in higher productivity and dedication.
In addition to all of this, you should always be ready to ask for help. Good advice can come from your peers, other business owners, friends, colleagues… Sometimes, all of that isn’t enough and it’s time to call the experts.
Consult with a Tax Expert and Save Yourself from a Lot of Stress
Even if you invest a lot of your resources into this matter, chances are that you won’t be so happy with the outcome. Tax laws are vast, complex and always changing. It is quite possible that all the time you invested will just leave you frustrated and drained when you could use all of that energy to do something that brings more value to your business.
This is when hiring a tax expert becomes your best option. It is a much bigger return of investment to have someone educated and trained deal with the mess that is tax regulations, and have everyone else do what they do best, yourself included.
Make sure that you have hired a reliable person, with good references and reputation, so that you can be sure that your business is in good hands. You will definitely be able to juggle the remaining balls more efficiently if you know that a very important one is already taken care of.