By Gloria M. Petroni, special to bizNEVADA
As the pool of woman business owners continues to grow, so do the complexities of our environments. Social changes, intricacies in tax law and constant introduction of new technology are just some factors changing the way businesses operate from their leaders to their front lines. As more females choose to enter business ownership in one way or another, that environment continues to present challenges and opportunities, of which there are steps that can and should be taken to protect what has been built.
A critical part of ownership is making sure that your legal foundation is safe. While there are many considerations when choosing a legal structure, a corporation, such as an S corporation or a limited liability company render only your business assets available in the event of a judgment against the company. In the event, you personally guarantee debt, that protection is no longer valid. Owners should maintain the policy whenever possible of only signing documents as an officer of the corporation or limited liability company as opposed to individually on a lease, loans, etc.
By the Numbers
Another essential component of protecting your business is ensuring that you have a good accounting system and controls in place. This generally means a qualified individual to enter your income and expenses into an accounting system that then is turned over to an accountant, enrolled agent or other tax preparer. The software chosen should be easily accessible and allow an owner to monitor monthly income and expenses, and compare to other months. If an owner is unable to measure income and expenses, they can’t measure gross and net income goals or business growth.
In most cases, business owners should consider hiring someone to prepare payroll, and file reports with the county, state and federal compliance authorities. A good tax preparer will have the experience to look at the books and determine whether there is anything wrong or if the company is on track with the profit ratios experienced by others in a similar industry.
Technology is a vital element in owning and protecting a business. Computer support personnel can assist with technology, including software to ensure the security of data, system backups, and fraud and security breach prevention. Having a trusted designee to oversee technology promotes internal procedure and security. It is important to change passwords every six months, or with any employee turnover. Implement internal controls and procedures to ensure employees are not granted access to private information regarding the business or have the capability to complete tasks without proper training or permissions, such as wiring money, signing checks or releasing confidential information.
One of the best ways to protect any business is establishing internal procedures and policies. While not always required by law, it is advisable to adopt a written policy that addresses vacations, time off, what happens with unused vacation, etc. A Human Resource professional to help with questions about employees, benefits, and what you need prior to hiring employees is almost a requirement if you have no previous experience in hiring employees.
Solo vs. Partners
When welcoming or considering business partners, owners should not expect anyone, including significant others or family members, to work for free. It can be dangerous to expect third parties to work without compensation, even if the business is just starting off. In the event of a misunderstanding, divorce or dispute, that person could potentially demand an interest in the business, or compensation for work they believed they should have received. A written cohabitation, prenuptial or postnuptial agreement would be the best way to confirm that the business is yours alone. If considering a partner, engage a lawyer to get a checklist of how your business may be affected by a partner and what written agreements must be in place to protect your interests.
One of the most important parts of protecting your business is staying true to yourself and your boundaries. If you don’t collect the money for your goods or services, offer significant discounts often or overspend, sustainability may become an issue. Determine boundaries, what charities you will support and how you will handle those businesses or individuals that will not or cannot pay your fees. It is essential to clearly define your business and draft a mission statement that will help your customers and employees understand your business core values and buy into the success of the business.