Starting a new business is an exciting time, but it can also be stressful. For many entrepreneurs, the last thing they want to worry about is being sued or facing other financial penalties from the government. Luckily, you can draw some simple steps to avoid these problems. Here are five ways new business owners should keep their business out of trouble and running smoothly.
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Understand Labor Laws
Labor laws are meant to protect you, the employee. You could face severe sanctions if you are caught violating them, including fines and jail time.
- Work with employees who have proper documentation
- Ensure that a reputable company handles your payroll
- Vet any employment contract offered to you for errors or omissions
- Ensure you are paying the minimum wage
- Report all wages you pay to your employees
All these laws must be complied with, so you don't find yourself in trouble. There are several steps you can take to make sure you aren't violating any labor laws:
- Know what federal and state laws apply to your industry; read up about everything from minimum wage rates to health care reform laws
- Consult a lawyer when necessary before hiring new people, making changes to employee benefits, or outsourcing work
- Make sure you have an employment policy manual and that all employees are familiar with it
- Post required notices in a conspicuous place where employees will see them
You can keep your business out of trouble by following these simple steps.
Avoid Settlement Annuity Penalties
One thing you'll want to avoid as a business owner is settlement annuity penalties. It can happen if you don't follow the proper procedures when issuing payments related to a legal settlement, cashing in an annuity, or making a withdrawal from a retirement account. Make sure you understand the settlement annuity rules in your state and follow them to the letter.
Get Everything in Writing
It is essential to get every agreement in writing when you start a business. It includes all agreements with clients, employees, and other companies. Having everything in writing can help avoid misunderstandings or disputes further down the line.
It is also essential to have an attorney review any contracts you sign to ensure you get the best deal possible. Then, if something goes amiss, you will have proof of what was agreed upon.
Avoid Tax or Licensing Penalties
One of the simplest ways to slip into trouble as a business owner is failing to comply with local tax or licensing laws. Ensure you are up-to-date on all regulations and pay any necessary fees on time. Otherwise, you could face steep penalties that can quickly put your business in danger. Consult an accountant or lawyer if you're unsure what you need to do to stay compliant.
You can do a handful of things to keep your business out of trouble. Make sure you understand labor laws, avoid settlement annuity penalties, get everything in writing, get insurance cover, and avoid tax or licensing penalties. Following these tips should help you run a smooth and successful business.
This is a contributed post.
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