As a small business owner, you are passionate about your craft or products, dedicated to your clients, and always striving for excellence. But you also have to fill many functions in the day-to-day operations of your company. Here are some areas where you may benefit from outside professional help, which will allow you to spend more time focusing on what you do best instead:
Business Structure
When launching a small business, you need to decide what form of entity to establish. This determines what tax return form you will need to file. The most common entities for small businesses are sole proprietorship, partnership, corporation and S corporation, or you can opt to form an LLC (Limited Liability Company) which has great tax benefits and is less burdensome in terms of paperwork. But make sure you’re on a solid legal foundation when forming your business entity to avoid hefty fees and penalties down the line. An online formation service will help you avoid bureaucratic hassles when it comes to setting up a small business.
Contract Review
When you sign a contract with a business partner or with a client, you enter an agreement that is enforceable by law, so make sure both parties know exactly what the agreement entails. A poorly written contract might leave your business exposed to potential lawsuits, so it is imperative that it be thoroughly reviewed before being dated and signed by both parties. If you offer unique products or services, consider having employees and partners sign confidentiality agreements and non-disclosure agreements; those contracts are widely used in business as they protect your intellectual property and trade secrets, and they will prevent an ex-partner or former employee from becoming a competitor and going after your clients.
Tax Audits
In rare instances, the IRS will want to review your small business’s tax records to make sure you paid the right amount in taxes based on your earnings. An audit can be triggered when a higher than average income is reported, when tax deductions seem too large for the business, or when you’ve been operating at a loss for several years–making your work more of a hobby than an actual business. It’s important to keep all business receipts and transactions available and accurate in case you get audited. So if bookkeeping and taxes are just too much for you to handle on top of the other hats you have to wear as a small business owner, consider hiring accounting professionals to help you.
Business Valuation
There comes a time when you may want to sell your business: maybe you’re ready to retire, or you want to do something else with your time. Whatever the reason, in order to price your business appropriately, you will need to determine its worth. To do so, you should get in touch with an appraiser who will provide you with an accurate valuation of your company. Take the time necessary to straighten your books, improve your sales, or gain new customers to make your business more attractive to potential buyers. Take care of any inconsistencies in your bookkeeping, as this could be a red flag for someone wanting to purchase your business. Selling a business may take a couple of years, and when you find a potential buyer, make sure you put any agreements in writing and have them sign a non-disclosure agreement should the deal fall through: you don’t want a competitor to have access to your financials.
Keep your small business in good standing by hiring professionals to help you with accounting, bookkeeping, and contracts. It will save you time and money in the long run, and you’ll be able to do what you truly enjoy: delivering the best products and services to your clients.
Do you need legal help for your small business? Connect with a team of expert attorneys today at the Dorothy Butler Law Firm by calling 512-699-5632.
By: Chelsea Lamb
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