Now that you've officially launched your business, you're ready to start being an owner! Running a business is an active, highly involved process with countless aspects to it, so you'll need to be prepared.
Since running a business is a complex topic, we will cover some common areas below. Make sure to do additional research to ensure you have all the steps covered. Let's get started!
Chances are you will be hiring employees unless you're a sole proprietorship. If you do, you'll need to know and do several things to stay compliant with the law.
Before you start hiring, you'll need to set up your payroll. This process has several steps, which you can read about in more detail on the U.S. Small Business Administration (SBA) website. These steps include things such as sorting out W-4 forms and creating holiday, vacation and leave plans.1
You will also need to decide whether you want to hire an employee or an independent contractor. This will affect how you can manage and withhold income tax from these workers. You may be asking," What is an independent contractor, anyway?" An independent contractor is a person who operates under a business name other than yours but works for your company. Contractors invoice your company for their services and are usually not employees in the traditional sense. In some cases, however, they may count as legal employees.1
You must classify your workers correctly as either an employee or contractor. This is because the IRS penalizes employers who misclassify an employee as a contractor.2 Check the Equal Employment Opportunity guide if you're unsure about this.
Next, you'll need to make sure you offer your employees certain benefits required by federal law. These benefits are:
There are various optional benefits and employee incentive programs you can offer. You can read more about them here.
Finally, you will need to follow any federal and state labor laws, which you can read more about in the below section.
Staying compliant with the law is a complex topic that could, and probably does, have books written on it. For our purposes, here is a quick rundown of some of the things you should know as a business owner.
First, your business may have internal requirements that the law imposes based on your business structure. For example, corporations have very strict requirements, like mandatory meetings, recording minutes, and bylaws.3
Second, you will likely need to pay business and personal taxes. Again, this depends on your business structure. If you have employees, you need to get withholding and income tax squared away. Also, you will need to follow any state filing requirements for your business structure.3 Some common filing requirements include annual reports and filing fees.4 If you want to read more about dealing with taxes, check out the IRS' Employer's Tax Guide.
Third, you need to make sure you stay licensed or certified. In our previous article, we mentioned that you will usually need one or more licenses to do business. Remember that being licensed is not a one-time thing. You'll need to maintain your licenses to stay in business. So, as you run your business, make sure you're meeting any renewal requirements.3
Fourth, know what your responsibilities are as an employer in Illinois. These areas follow:5
Last, follow any state and federal regulations. These include the laws laid out under EEOC and the Fair Labor Standards Act (FLSA), to name two examples.
While running your business, keep these important points in mind.
First, don't forget to follow your standards 24/7. Quality isn't a "once in a while" thing, and letting it slip once could have dire results. For example, you can't say "let's not worry about food safety today" in business.6
Second, constantly keep track of everything. This includes record-keeping, taxes, bookkeeping, and other information you need to track to run your business effectively. Actively track your finances such as cash on hand and what expenses you need to pay to keep running. Knowing whether the money you are investing, such as advertising, is yielding proper returns is important in guiding your future decision. Forgetting to monitor these things could lead to problems further down the road.6
Third, make sure you have enough customers. One of the biggest mistakes people make when starting (and running) a business is not making sure they have enough customers. Since you need customers to stay open, be on top of this, both initially and while you're running. Have a strategy to get enough customers interested and, equally as important, keep them interested. Businesses run into problems when either not enough people are interested, or they aren't targeting the right customers – the ones in your "crowd."6
Finally, remember to keep growing! Simply put, business is a world where you need to be constantly moving. Things are changing every day, and one of your jobs as the owner is to keep up with them.6
Your image of the all-American entrepreneur may be a superhero-like figure who does everything by himself or herself. Remember though, it's perfectly okay to use tools and services that help small business owners. The digital age has given rise to many small business tools. For example, instead of handling marketing completely alone, explore tools like HubSpot. For customer service, there's Zendesk; for accounting, there's FreshBooks. These are only a few examples of all the small business tools and services out there. If you look, you can find services aimed toward almost every aspect of owning a small business.7 You can also read more about the different tools from various categories on Forbes.
Now that you've read about running a business, learn about building an online presence. If you'd like more info about managing a business and hiring employees, check out DCEO's Publications & Business Guides and Illinois workNet's Hiring for Employers page.
Sources
1 https://www.sba.gov/business-guide/manage-your-business/hire-manage-employees
2https://www.irs.gov/newsroom/understanding-employee-vs-contractor-designation
3 https://www.sba.gov/business-guide/manage-your-business/stay-legally-compliant
4 https://www.sba.gov/business-guide/manage-your-business/pay-taxes
5 https://dceo.illinois.gov/smallbizassistance/beginhere/stepbystepguide.html
6 Kevin Lust, Director, SBDC (Springfield, IL)