19 Ways to Survive in a Tough Economy. Lynn Spry
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needs to be understood thoroughly.
There are a few simple ways to get this information. The most direct is to approach your state or provincial and local government and simply ask what obligations your business has. Unfortunately since these government officials will not be familiar with all the specifics of your business, there are times when the advice you receive from these officials may not be accurate or may be out of date. As a result, you should always follow up with other business owners or the Small Business Association (SBA) to find out how these rules really apply.
5. Post All Required Notices
Make sure to check your state or provincial and local business regulations for any notice you are required to post or display. According to US Federal law there are a handful of Federal notices that you are required to display. For instance, if you have employees, there are federal forms that must be posted such as the “Federal Minimum Wage Notice.” Failure to post the required messages could result in financial penalties and other legal consequences. Similarly, states and provinces often obligate businesses to post certain notices, and the required documentation depends where your business is located. Take some time to research what notifications are required in your area.
Aside from these notices, you may find that there are licenses that you have to obtain. In some cases, these licenses are also supposed to be posted prominently. Since these may vary based on your type of business, you should check the federal, state or provincial, and local offices that regulate your business. Also, make sure to include any notices that may be valuable disclaimers. For instance, if you run a food-service establishment that offers raw (e.g., sushi) or undercooked food on the menu (e.g., medium-rare steaks), you may need to include a menu disclaimer that describes the risks of eating undercooked food.
6. Forms, Documentation, and Disclaimers
Another way to protect your business interests is to ensure that you document what your business does. Instead of trying to create new forms for your business, it is faster and more efficient to get premade forms that can be used by your business. Having some of your day-to-day activities formally documented is helpful as it allows you to have a written history of what your business did and when it was done.
Documentation may be helpful if you ever need to check the history of a customer order, track a purchase, or document an employee termination. This backup documentation is very useful if you ever have a customer issue that has escalated. For instance, once, we had a customer who was dissatisfied with her service. She claimed that she was unaware of the risks associated with fixing an old, failing computer. Instead of telling someone at the store so that it could be resolved, she paid, left quietly, and took the issue directly to the Better Business Bureau (BBB). Having a strong documentation trail allowed us to settle the problem to everyone’s satisfaction. We were able to provide the BBB with the documents they needed to see that we had in fact notified her of all her risks and issues. We attached her signed check-in form that clearly showed we had outlined the risks associated with repairing a damaged computer like hers. We then worked with the customer to make her happy and to retain her business.
Disclaimers are a good way to protect your business and they can also provide opportunities for additional sales. For instance, at most car dealerships the salesperson will review the warranty paperwork with the customer. At this point, when the limitations of the warranty are being discussed (e.g., only 3 years), the salesperson has a perfect opportunity to offer the customer an extended warranty.
If you don’t already have documents in place, they are easy to find or purchase. Self-Counsel Press publishes Small Business Forms; a kit that contains a CD with the forms typically used by small businesses to complete their day-to-day operations including personnel forms (e.g., employee performance reviews, employment applications), financial forms (e.g., invoices, statements, purchase orders), and even general office forms (e.g., memos, telephone messages). Obtaining a low cost premade package like this saves time that you can better use to grow your business.
Another type of document you will need if you are providing a customer service such as repair work or consulting advice is a standard service contract that can be used with your customers. This contract should include the possible negative outcomes (e.g., damage) that could occur and the limits around your company’s liability. Legal forms can be purchased at your local software vendor or on the Internet. For extra safety have your company’s lawyer review the document before you use it. It may be necessary to draft a customer form for your specific business needs.
7. Finding Reliable Information
By now, you may be starting to be concerned that it will be difficult, if not impossible to keep up with the many government, state or provincial, local, municipal, and city rules. Fortunately, there is a way to stay compliant with all the various rules, regulations, notices, obligations, and laws that are out there.
The US government has a site called Business.Gov that helps your business navigate its way through the maze of state, federal, and local laws. This site is designed to help small business understand their legal requirements and to find the appropriate services. This is an official site of the US government that provides links to other resources throughout the federal, state, and local government. It effectively helps organize the resources that are available to make it easier on business owners. If you aren’t sure where to start looking for information on your issue, this is a great place to begin. Some of the items available at this site include easy-to-find links to information businesses need on topics such as taxes, financing, grants, state compliance, industry compliance, local laws, specific industry rules, and much more. This site is a fantastic resource for business owners and their employees.
Canada Business (www.canadabusiness.ca) and Industry Canada (www.ic.gc.ca) offer helpful information and links on their websites. On these sites, business owners can find information about taxes, laws, regulations, and permits, among many other helpful topics.
1. Internal Revenue Service, “Filing Late and/or Paying Late,” http://www.irs.gov/businesses/small/article/0,,id=108326,00.html (May 2009).
2. Internal Revenue Service, “Filing Late and/or Paying Late,” http://www.irs.gov/businesses/small/article/0,,id=108326,00.html (May 2009).
3. California State Board of Equalization, “Special Notice: Tax Amnesty — Related Penalties and Billing Time Limits,” http://www.boe.ca.gov/news/pdf/sntaxamnesty.pdf (November 2005).
4. CRA, “Taypayer Relief Provisions,” http://www.cra-arc.gc.ca/gncy/frnss/prv_2-eng.html (May 31, 2007).
5. Arizona Department of Revenue, “Arizona Transaction Privilege Tax Ruling,” http://www.azdor.gov (July 2002).
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Eliminate the Financial Obstacles
When managing a business, in any type of market, it is vital to track expenses. However, in a tough economy, even the smallest financial waste can quickly destroy your profitability. The business owner and the employees have to understand that eliminating unnecessary expenses isn’t something they should get to when they have a free minute, after lunch, or when Simmons in accounting gets back from vacation. Any financial leak needs to be plugged as soon as it’s found, before it’s too late.
Most company owners value and understand the importance of having a complete financial picture of their company. Unfortunately, when the business is struggling, some business owners don’t take the time to review their company’s entire financial picture.