In times of economic struggle, companies look for new ways to reduce costs so they can continue to make a profit. Unfortunately, one of those areas that many small and mid-sized businesses think that they can cut costs is with their commercial business policy. Some will cut their small business insurance down as low as possible, leaving themselves open for financial tragedy, should an incident occur, while others decide to forgo getting a commercial business policy altogether, which can lead to legal and financial problems that could ultimately cause their business to be shut down entirely.
Here are five things that every commercial business owner should do as soon as possible to protect their business from liability or from potential financial pitfalls. While it may be tempting to cut your small business insurance, it is more important than ever before to get commercial insurance in Fall River. If you are currently uninsured or under-insured, speak with your Fall River insurance agent as soon as possible to get the coverage you need.
#1 – Proper Legal Structure
Regardless of the type of business you are running, it is important to think about how your business will be structured. Are you running as a sole proprietor or are you part of a larger corporate entity. Most businesses start out as a sole proprietorship, especially if they are small or mid-sized businesses. As they grow, they can evolve into a larger corporate structure. It is cheaper to run your business as a sole proprietor because you don’t have to do corporate tax returns or create corporate documents. However, there is a lot of risk associated with operating as a sole proprietor and you will miss out on the protection that comes with working as a corporation.
#2 – Pay Your Taxes
There are a lot of misconceptions on how small and mid-sized business owners are required to pay taxes. Corporations must begin filing their taxes on the income that they earn as they earn it and pay taxes on it quarterly. Sole proprietorships do not need to begin paying taxes immediately, although the letter of the law says that you should file taxes quarterly if you make over $400 a year doing business. The best advice when it comes to taxes of any sort is to speak with a qualified and experienced tax attorney or tax accountant. Hiring these professionals is not just smart business, but it is also a tax write-off!
#3 – Learn About Self-Employment Taxes
Another type of tax that often bites small business owners in their first year is the self-employment tax. As an employee, your employer withholds taxes from your income to fund Social Security. Half of the money that gets paid into this program comes right out of your check and your employer covers the other half. However, when you are self-employed and run your own business, you need to pay the entire amount. While you don’t have to make quarterly payments for self-employment tax, you do need to know how much you will be held accountable for at tax time so you can start setting money aside to pay it when it comes due.
#4 – Get Commercial Insurance in Fall River
It just makes good sense to get a commercial business policy for your corporation or small business insurance for your sole proprietorship. While you don’t actually need to have insurance until you hire your first employee, it makes sense to get small business insurance – even if you are just working out of your home. If someone comes to visit you for business purposes and slips or trips on your property, yu could be held liable. Check with your Fall River insurance agent to find out what is covered under your homeowners insurance and what need to be protected under a commercial business policy. You don’t want to lose your business and your home because of one single accident.
#5 – Ask for Money
A lot of small business owners have a hard time asking a client for money. Get into a habit of asking for a fee upfront when you take on new jobs – somewhere between 10-50 percent. It isn’t just smart business for you, but it will help your client to stay on top of the fees that they owe you and better afford your services if they know what to expect upfront. Contracts are also a smart way to go, especially for small business owners that are just starting out. Knowing how much you are charging and when you will be paid is an important part of doing business. Being firm in your policies shows that you are serious and that you should be taken seriously in return.
Where to Get Small Business Insurance in Fall River
If you need a commercial business policy to protect your small or mid-sized business in the Southeastern Massachusetts or Rhode Island area, contact Sullivan Insurance. With a wide variety of policy options available for small business insurance on up to corporate policies, Sullivan Insurance can help you get the coverage you need to protect your business. Contact your Fall River insurance agent with any questions you might have about getting comprehensive commercial insurance in Fall River for just about any type of business model.