Best Business Practices

When you start a business, there are endless decisions to make. Among the most important is how to structure your business. Why is it so significant? Because the structure you choose will affect how your business is taxed and the degree to which you (and other owners) can be held personally liable. Here’s an overview of the various structures.

Sole Proprietorship

This is a popular structure for single-owner businesses. No separate business entity is formed, although the business may have a name (often referred to as a DBA, short for “doing business as”). A sole proprietorship does not limit liability, but insurance may be purchased.

You report your business income and expenses on Schedule C, an attachment to your personal income tax return (Form 1040). Net earnings the business generates are subject to both self-employment taxes and income taxes. Sole proprietors may have employees but don’t take paychecks themselves.

Limited Liability Company

If you want protection for your personal assets in the event your business is sued, you might prefer a limited liability company (LLC). An LLC is a separate legal entity that can have one or more owners (called “members”). Usually, income is taxed to the owners individually, and earnings are subject to self-employment taxes.

Note: It’s not unusual for lenders to require a small LLC’s owners to personally guarantee any business loans.

Corporation

A corporation is a separate legal entity that can transact business in its own name and files corporate income tax returns. Like an LLC, a corporation can have one or more owners (shareholders). Shareholders generally are protected from personal liability but can be held responsible for repaying any business debts they’ve personally guaranteed.

If you make a “Subchapter S” election, shareholders will be taxed individually on their share of corporate income. This structure generally avoids federal income taxes at the corporate level.

Partnership

In certain respects, a partnership is similar to an LLC or an S corporation. However, partnerships must have at least one general partner who is personally liable for the partnership’s debts and obligations. Profits and losses are divided among the partners and taxed to them individually.

If you’re like most people, you’ve got lots of paper. Some of it you need to keep, and some of it you don’t. Here’s a look at what to hang on to and the best place to store it.

It’s in the Box

A safe deposit box at your bank or a fireproof box in your home should hold birth ­certificates for you and other family members, marriage and divorce documents, naturalization papers, adoption papers, and death certificates. You may also want to keep property deeds and vehicle titles there as well. And you may want to include stock certificates and bonds that aren’t held by your broker.

Let Your Lawyer Hold It

Your will, power of attorney, health care proxy, trust documents, and other legal papers should be on file with your lawyer. You’ll probably want to keep copies of these documents in your home files and give copies to your personal representative or executor.

On Your Own

Keep records of stock purchases used for determining cost basis, income-tax returns and supporting documents, insurance policies, warranties, and receipts for home improvements in your home filing cabinet where they’re easy to access if you need them.

What To Toss

Credit card statements, receipts, and similar items can be tossed quarterly if you won’t need them for tax purposes. Consider shredding these and other sensitive records before putting them in the trash.

Whether you need individual or business tax advice, give us a call. We’ve got the answers you’re looking for, so don’t wait. Call us today.

Finding the best candidate to hire is often costly and time-consuming. But, if your new hire turns into a loyal, hardworking, long-term employee, your investment may be worth every cent and minute.

Locate Candidates

How do you find good people? In the past, people who were job hunting would look in the “help wanted” section of the newspaper or go from store to store filling out applications. Today, most people use a computer and a mouse and search the Internet for jobs. So if you’re not posting your openings on online job boards and industry blogs and websites, you may be missing talented candidates. Note: Running classified ads may still be a good way to reach out (especially to fill jobs requiring local candidates) since many local newspapers also have an online job board for posting classifieds.

Another way to attract candidates is to add a recruiting page to your website. In addition to posting job openings, you can use the page to attract qualified candidates by highlighting the benefits of working for your company.

And last, but certainly not least, you can use social media to announce openings and solicit job applicants. There’s no better way to reach a large number of people almost instantaneously.

Make an Attractive Offer

If you’re hoping to hire top talent, you’ll want to make sure the benefits you offer are competitive — or better. Many full-time workers have access to employer-provided medical care and/or access to a retirement plan.

Keep Employees on Board

Once you’ve assembled a group of valuable employees, an attractive and competitive benefit package will help ensure they stay. Your financial professional can provide insights and help you review your firm’s benefit package for cost efficiency and competitiveness.

For more tips on how to keep business best practices front and center for your company, give us a call today. Call us at (336) 354-4352 to schedule a free initial consultation and learn more about how our Winston-Salem CPA Firm can help you get your new business off the ground.

The reach of social media goes beyond sharing family photos. Shoppers are reading product reviews online before deciding what to purchase. And disgruntled customers are sharing their displeasure with anyone who will read their rants.

A New Risk

The benefit of social media to small businesses is considerable. It has leveled the playing field in many ways. But it has also introduced new risks. One of the most critical is that bad reviews or negative comments could ruin your business’s reputation — or worse.

A Proactive Approach

How can you protect your business from online attacks? Here are some suggestions:

Join the conversation. If you’ve been visible on social media, you’ll have more credibility if something erupts. But that’s not the only reason to have a social media presence. Even if your business is never involved in an online dustup, social media offers an opportunity to market and promote your business and engage with your customers. Smartphones and tablets have made it even easier for people to go online.

Pay attention. Monitor the Internet for news about your brand. Routinely check online review sites (if appropriate) and social networking sites for references to your company, and run your company’s name through a search engine.

Be prepared. You can’t draft specific responses ahead of time, but you can identify your vulnerabilities and draft a response strategy. You’ll be well ahead of the game if you do this before a crisis hits rather than during one. You’ll also be able to dial down your emotions and respond more objectively. There’s another upside to identifying your vulnerabilities ahead of time: You have an opportunity to eliminate them.

Respond. Make sure you have the facts straight before you do anything. However, things can escalate rapidly online. So if you’re going to respond, do so quickly and publicly. That said, not every attack warrants a public response. The complaint may not be legitimate or the person complaining may be a troublemaker, in which case responding may be a waste of time.

Half Full

Any time your business is under attack — online or off — try looking at it as an opportunity to change some minds and bolster your reputation.

Want to learn more about our small business accounting services? Schedule your free initial consultation now or give us a call at 336-774-9860 today.

For businesses that haven’t traditionally embraced remote employees, it may be difficult to get up to full speed with the current turn of events.  To make the inevitable transition less overwhelming, we assembled a handy checklist of actions to consider while adjusting to the new workplace reality.

Organization

• Access your staff members and/or roles that are able to work remotely, those that can’t work remotely, and those where remote work may be possible with some modifications.
• Conduct an employee survey to determine the availability of computers that can be used for working remotely, as well as availability to high-speed internet access.
• Create company guidelines covering remote employees, including inappropriate use of company assets and security guidelines.
• Develop and conduct work-at-home- training for using remote access, remote tools, and best practices.
• Select a video-conferencing platform for services, such as Zoom, Cisco WebEx, or Go To Meeting.
• Develop a communications plan to involve remote employees in the daily activities of the organization.

 Security

• Create and implement a company security policy that applies to remote employees, including actions such as locking computers when not in use.
• Implement two-factor authentication for highly-sensitive portals.
• If needed, confirm all remote employees have access to and can use a business-grade VPN, and that you have enough licenses for all employees working remotely.

Staff

• Institute a transparency policy with your staff and communicate frequently.
• Check in on your staff, daily if possible, to confirm they are comfortable with working from home. Find and address any problems they may be experiencing.
• Make certain each staff member has reliable voice communications, even if this results in adding a business-quality voice over IP service.
• Don’t attempt to micro-manage your staff. Remember their working conditions at home won’t be ideal, and they will need to work out their own work patterns and schedules.
• Create a phone number and email address where staff members can communicate their concerns about the firm, working at home, or even the status of COVID-19.

Infrastructure

• Ensure that you have ample bandwidth coming in to your company to handle all of the new remote traffic.
• Make sure you have backups of your services so your staff is able to keep working in the event extra traffic causes your primary service to go down.

You may need to adjust or expand this list to match the specific needs of your firm and the conditions affecting your organization.  Use this list to get you started and to help guide you through the process.

What if disaster strikes your business? An estimated 25% of businesses don’t reopen after a major disaster strikes.¹ Having a business continuity plan can help improve your odds of recovering.

The Basic Plan

The strategy behind a business continuity (or disaster recovery) plan is straightforward: Identify the various risks that could disrupt your business, look at how each operation could be affected, and identify appropriate recovery actions.

Make sure you have a list of employees ready with phone numbers, email addresses, and emergency family contacts for communication purposes. If any of your employees can work from home, include that information in your personnel list. You’ll need a similar list of customers, suppliers, and other vendors. Social networking tools may be especially helpful for keeping in touch during and after a disaster.

Risk Protection

Having the proper insurance is key to protecting your business — at all times. In addition to property and casualty insurance, most small businesses carry disability, key-person life insurance, and business interruption insurance. And make sure your buy-sell agreement is up to date, including the life insurance policies that fund it. Meet with your financial professional for a complete review.

Maintaining Operations

If your building has to be evacuated, you’ll need an alternative site. Talk with other business owners in your vicinity about locating and equipping a facility that can be shared in case of an emergency. You may be able to limit physical damage by taking some preemptive steps (e.g., having a generator and a pump on hand).

Protecting Data

A disaster could damage or destroy your computer equipment and wipe out your data, so take precautions. Invest in surge protectors and arrange for secure storage by transmitting data to a remote server or backing up daily to storage media that can be kept off site.

Protecting Your Business

If you think your business is too small to need a plan or that it will take too long to create one, just think about how much you stand to lose by not having one. Meet with your financial professional for a full review.

Want to learn more about our services? Request a free consultation or give us a call today at 336-774-9860. We look forward to the opportunity of working with you!

Source/Disclaimer:

¹Source: U.S. Small Business Administration, www.sba.gov/content/disaster-planning.