1. Do your homework. Ever heard of those lovely little things called business plans? No matter how simple or intricate your business is, outlining every aspect of how the business will run will save you a lot of headache in the long.
From the mission statement to pie charts and projected numbers, the business plan acts as a vision for the healthy growth of the business. It will also help you clearly define who your ideal audience is, which in the end is where you want to spend your energy promoting your product or service.
Need help with your business plan? Head over to the U.S. Small Business Administration's website to get started.
2. Know your numbers. Finance is not a strong suit for a lot of business owners, but thankfully, it doesn't have to be. Align with a Certified Public Accountant who can walk you through the process of setting up your accounting software (i.e. Quickbooks, Wave, Freshbooks), educate you about how to manage your daily Profit and Loss, and answer any questions you may have as the need arises.
CPAs can also assist you in filing your taxes, determining when to pay your taxes--yearly or quarterly--and how much you'll pay out depending on your incoming and outgoing.
3. Pay the IRS. What's more important to minimize risk in your small business than to pay your taxes? The answer is nothing.
I will say it until I'm blue in the face, but you do not want to owe the IRS.
Whether you pay quarterly or yearly, you should always keep tax time on your radar and allot accordingly.
And the answer is yes, if you are running a small business, you need to pay taxes.
4. Get insured. Every business insurance needs vary greatly depending on the type of business, but at the very least, you will need General Liability Insurance. General Liability Insurance provides protection for your business if you, your employees, or products and/or services have caused bodily harm to a third party.
5. Get everything in writing. Whether you're working with a business partner, customer, client, friend, or family member, it's important that all terms and conditions are clearly defined in writing and agreed to by both parties.
For example, when I owned my company as a makeup artist, my bridal clients had to leaf through and sign an eight page contract. Seems excessive, doesn't it?
The reason my contract grew to eight pages in the first place was due to all the policies I had to instill each time something occurred that I wasn't able to protect myself against. Contractual agreements hold definite weight in court in case things do unfortunately go South with a client or customer. Of course, we never wish these things to happen, but they do, and in hindsight, we wish we would've done our due diligence.
This will also safeguard you in the event a customer or client wants to take legal action against you.