New Year is the time when businesses begin to consider making changes. After all, it’s easier to come up with resolutions at the turn of the year. Sadly, twelve months is a long time in the industry and the wait could harm the firm. Businesses have to be flexible and ready to adapt and react at the drop of a hat, hence the six-month rule.
These are the things a business must contemplate before it’s too late.
You started a sole trader enterprise six months ago and everything is going to plan. So, everything should stay as it is, right? No, not necessarily because you can use success to make a positive change. A sole proprietorship may be the best option in the beginning, but it’s a liability in the long-term. And, that isn’t an exaggeration because it is literally the case. By going limited and incorporating the business, you are less vulnerable from a personal point of view. Yes, you may have to give up a modicum of control but it’s a small price to pay for extra security.
The business started off in your living room and quickly moved into office space. Thankfully, the search is over and you can stay put for five years or longer. Maybe that is what’s best for the business but you shouldn’t accept it as the truth. The only way to know for sure is to check out rent serviced office space on the market. Sure, there might be nothing to write home about, and you continue to stay put. But, there might be a diamond in the rough which is cheaper and has a fantastic location. If you only signed for six months, you should be on the lookout anyway.
A tax return isn’t due until the end of the year, which is why bosses leave it until the last minute. The thing is that tax is a complicated process and can get messy. By the time the firm checks its contributions, there might be issues that need addressing. An excellent trick is to prepare tax for the end of the year throughout the year. Of course, the company should put away a small amount each month to cover the costs. However, the tax prep accountant in charge should also make sure there are no changes which impact the overall contributions. Plus, are there any expenses the business can claim to cut tax costs?
Many businesses leave this until the end of the year, but it’s best to do it every six months. Why? It’s because any problems, big or small, can escalate over the course of a year. Employees will never know whether they are doing a good job if there is zero feedback. Instead, they will continue down the same path and potentially harm the company. Also, even if everything is going well, it could be better. It is a dangerous mentality but it is possible to improve business processes. To do this, you need to disseminate information to the workforce.
Every six month, there needs to be a review and the areas above are the best places to start.
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