Starting a business can be both exciting and challenging at the same time. You may concentrate on innovation, creativity, ROI, and independence. But, how do you ensure that your business is safe? Never ignore any process that legally and financially protects your startup. The lifespan of your business depends on your financial strategy and the legal protection you use.
Here are some ways to ensure that your startup enjoys maximum protection.
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Register and Structure Your Startup
This step is more critical for any startup, especially if you don’t want to cat and mouse games with the state authorities. Consider registering your startup with the state. A good business structure starts with your plans which will guide you on the best type of business you should register. For instance, the frame defines your liability and taxes you’ll be paying the state. You’ll have to structure your startup as Corporation, Partnership, Limited Liability Company or Sole Proprietorship.
Liability Company (LLC) is the most preferred type of business for a startup because it ensures the separation of your personal belongings and property from your business property. In this case, should there be a risk of seizing your business, your personal property remains untouched. You can apply for LLC to help you structure your business without limited liabilities at no extra cost. Also, don’t forget to apply for a trade license, permits, and tax identification number.
Insurance is very crucial to any startup. As you start your investment, there are many risks involved, which insurance may cover just in case of anything. You may think your business is secure and don’t need a commercial liability cover. Medical insurance companies can help you protect your business finances, especially when you’re sued by a vendor, client, or any other third party. If your workplace is prone to employee errors or accidents, consider having professional liability insurance and medical insurance to cover workplace errors and injuries.
Also, commercial auto insurance will help you cover any damages to your property, such as vehicles or machines. Remember, the medical or wellness cover can significantly boost your employee’s morale if it’s extended to their immediate family members. Insurance policies are crucial in ensuring that you don’t dig deep into your pocket should emergencies arise; hence acts as financial security for your business.
You may think you don’t need to track your business income and expenses because you’re just a startup. Not paying taxes is a severe offense in the US, and you must follow your transactions from the beginning. If you don’t focus on taxes, you may make some mistakes, and the state will be on your neck. Consider hiring an expert accountant or bookkeeping professional to help you keep the required documents, information, and track records, as well as advice on the specific taxes you’re required to pay. They can also help you file your tax returns and claims professionally.
Give Your Employees a Valid Contract
Hiring employees without complying with the law can land you in serious trouble. Whether you’re starting with one employee or a number of them, ensure that you have a valid contract with them. The agreement shows their rights as your workforce and your responsibilities as an employer. Consider working with an attorney to help you design a contract covering all elements, including code of conduct, health and safety, company culture, working hours, discrimination, termination policies, and much more. Remember, a safe working environment is crucial for everyone, and you should include the clause in the contract.
Embrace Cyber Security
Technological advancements have made businesses and their networks vulnerable to malicious cyber attacks, hacking, or phishing. Investing in cyber security ensures that your startup data is protected from any online theft or damage. Consider adopting a secure way of operations to avoid cyber attacks or hacking. Cyber attacks can negatively influence your business regardless of the type, size, or location. If you don’t invest in cyber security, your startup may suffer financial losses, reputation damage, legal liability, and other insecurities.
Unfortunately, many startups ignore the importance of business protection. It doesn’t matter whether you a startup or you’ve been in business for years; you must protect your business. It will go a long way in ensuring the smooth operation of your startup in the long run.