Basic Blunders: Are These Four Common Mistakes Harming Your Small Business?
Many times the small business owner is focused on running and growing the business, and can fall prey to common missteps that can be lethal to the long-term interests of the business. As a small business owner, you need to make sure to steer clear of these common mistakes:
- 1. Lack of Employment Agreements: This is an especially important need for family owned businesses, so that compensation and expectations are spelled out for all parties. For any business, employment agreements are necessary to set forth the rights of both employers and employees, and can save the company significant money in the long run in litigation costs and fees.
- 2. Lack of Corporate Formalities: The only way to shield your personal assets from the liabilities of the company is to make sure that your corporate formalities are in place. if you own your own business, in order to maintain the corporate shield to personal liability, you must properly set up your company and then update your corporate books and records appropriately. Accessing sunbiz.org is not setting up a company properly and does not protect your assets.
- 3. Commingling Assets: Many small business owners fail to maintain separate accounts and accounting for their business and personal finances. Mixing the two together can create a circumstance where you could be held personally liable for a business liability. This goes hand-in-hand with corporate formalities and choosing the correct corporate entity for your business needs.
- 4. Corporate Succession Plan: It is important to plan for what you want to happen to your business and your employees when you are no longer with us. If your company is family owned, this is imperative and should be done in concert with your estate planning. Without succession planning, many times your business dies when you do.