A To-Do List for Starting a Small Business


BusinessPlan-webThere are certain actions all small businesses must go through in order to be successful. This doesn’t even take into account the process of coming up with the brilliant idea for the business, which is oftentimes half the battle. An entrepreneur has at least five main considerations that should not be taken lightly before even considering adding to his or her corporate team.

  1. Know the legal inevitabilities

This step is listed first because it’s the most crucial. Failing to make yourself aware of these guidelines will kill your business before it even has the chance to get off the ground. First, you will need an Employer Identification Number (EIN) for tax purposes. IRS form SS-4 will help you begin this process. After that, you must register with the labor department.

“Unemployment taxes are a requirement when you take on employees. Contact your state’s labor department for information on how to register and the amount of tax you can expect to pay per employee,” states online hiring resource ZipRecruiter.

You will also need to have worker’s compensation insurance and maybe even liability coverage. Local agencies can give you more information on the types of insurance your certain form of business may need.

Furthermore, just know that you must file a W-4 form with the government for all new hires. This sheet will tell you how much tax to withhold from each paycheck. You will also need to file an I-9 form to show that your employees are legally able to work. This and other information will need to be reported on the state and federal levels, and everything should be kept on record for at least seven years for auditing purposes.

  1. Evaluate your financial situation

Now that you have a basic knowledge of what business owners need to legally do throughout the process of hiring additional employees, you can consider if you have the funds to actually do so. As mentioned, taxes and insurance are costs in addition to basic payroll that need to be calculated. If your business will offer benefits, including vacation time and a retirement package, you will need to add that to the budget, and don’t forget to include your own salary as well. This will tell you how much you will be able to pay prospective employees.

“If you have any concerns about falling short … consider working with a contract agency or freelancer until your situation is more stable,” suggests Eric Siu, contributor for Entrepreneur.com and CEO of his own San Francisco-based digital marketing agency, Single Grain.

  1. Assess your needs

Next, you need to consider what type of worker or workers you want to hire. In what areas will they work? What should their strengths be? There is no pre-determined answer to these questions. You should aim to hire someone to work in an area that is not at the top of your job description as the boss or business owner.

“Take stock of what you spend the most time on every day, then decide what you can cover yourself and what should be delegated to employees,” ZipRecruiter notes.

Moreover, you will want the person’s skills to complement yours and help you to make the most of your company’s bottom line.

  1. HelpWantedChoose the right person

Easier said than done, right? Well, it’s actually not that hard if you know how to go about the hiring process. To begin, advertise the job opening(s) via as many channels as possible. Go old school and list it in the newspaper’s classified ads, or embrace technology and put it on websites such as CareerBuilder. Social media sites such as LinkedIn is a great way to reach qualified potential employees, and Facebook or Twitter can be useful as well. Finally, don’t discount good, old-fashioned word of mouth. Ask for recommendations from family, friends and business contacts, as they would not likely send an unqualified candidate your way that they themselves do not stand behind.

Once you choose the best applicants on paper, you will need to conduct thorough and objective interviews. Ask relevant questions that will clearly tell you if the interviewee will be a good fit for your company. Be precise about the duties involved in the position and your expectations of employees.

According to Siu, you may also want to consider if the candidate has past experience with startup businesses, as they are a unique culture, very different from the structure and hierarchy of large firms.

“Working for a small company requires that employees work autonomously, and it rewards those who are able to wear many hats and work beyond their stated job descriptions,” he said.

  1. Lawyer up

Yes, more legal stuff, but the advice in this step is much more basic: consult a lawyer. As Siu notes, there are vast and various laws and restrictions that govern employee-employer relationships, depending on your location and industry, so save yourself some future headaches and potential expensive legal disputes and talk with a lawyer right from the start. Paying for a few hours of consultation and document review is a much better option. Think of it as an investment in your company’s long-term growth.

This is the point where you would set up a payroll system and develop an orientation process, but those steps are cakewalks compared to the process of gearing up to have people work under you. Though tedious, it is necessary to show attention to the above concerns if your small business is to become successful.

 

Related Articles

Leave a Reply