Overview
So, you’ve established your business, and you are starting to get your place in your market. You’ve even recently managed to hire your first full-time employee! These kinds of exciting milestones, however, are not free of their pitfalls. As your business expands over time and begins to grow in size and scope, new considerations and risks begin to accumulate as well, and they aren’t likely to have been things you’ve considered previously. For example, when you hire that first employee, aside from adhering to minimum wage laws, you also need to begin doing the proper withholdings for taxes from their pay as well. As you add more employees, you also begin adding responsibility to yourself in the terms of benefits you must offer, like vacation, family leave, and health care if you are in the United States.
These employment requirements, and everything else like them, are the results of laws and regulations from governing bodies that are imposed on business owners with the threat of fines and penalties being levied against the business for non-compliance. From wages, employee classifications, equity issues among owners and more, the pitfalls that surround a newly blooming business are numerous and require careful planning to successfully navigate. And those are just internal operations!
On top of basic things like employment, you also have licensing issues with the community in which you operate. Is your office or retail location in the correct zoning area? Are there environmental requirements for your business? Do you rent your office space? If so, what, if any, insurance does your landlord require? Should you have insurance for your employees? Is your business online? Where are your customers? How old are they? How do you communicate with them and market to them? The larger your business grows, the more these questions become relevant, and it is something that you should plan for from the start of your business. And like any good plan, you need a good team to help you execute that plan.
You need legal experts to craft your contracts and review your agreements so that you can navigate and negotiate with suppliers and landlords. This will not only place you in a more level playing field in terms of knowledge, but will also help to ensure you are getting what you expect to get from such arrangements. Your legal team will also need to guide you through zoning requirements and how to properly form contracts with your employees and partners.
You need financial experts to make sure you are making the correct tax withholdings and that the financials of your business are in line. Without properly managed cash flows, you can wind up with more money going out than coming in. Additionally, as you make more revenue, more regulations can come into play regarding employee treatments and benefits. Often times, your financial experts will have to include banking institutions and accountants, and it pays to know what institutions provide the most benefit to you as a customer.
And finally, you need to know where you can access these resources in an affordable way. These areas can be significant financial expenditures. Legal fees alone can be upward of USD 100 per hour of work. However, there are a number of options you can potentially explore that can mitigate the amount of costs you will face. Between community programs and university outreach, there is a strong chance that you can procure some of these services at a greatly reduced cost, sometimes even free. The important thing to remember is to be prepared and to get your team formed around you as soon as possible after you start. This will let you navigate the path to entrepreneurship with less difficulty, or at least in a more prepared manner.
Further Reading
Not sure where to start?Assess your skills level for regulatory considerations
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