Prepare by Asking Difficult Questions BEFORE Starting a Small Business
Far too often, The Payroll Department is reminded of the incredible risk taken by entrepreneurs with a strong spirit. We drive down a street and notice some type of new small business. A few months or maybe a year later, we drive again down the same street but notice that the small business has vanished. That’s when many of us scratch our heads, wondering what the story might be regarding the “Now you see it, now you don’t” demise of small business ownership.
In his latest book, Small Business Management, author Michael Ames lists the following reasons why small businesses often fail:
- Lack of experience
- Insufficient capitol
- Poor location
- Poor inventory management
- Over-investment in fixed assets
- Poor credit arrangement management
- Personal use of business funds
- Unexpected growth
Another author, Gustan Berle, who wrote The Do It Yourself Business Book, adds the following to the list of reasons for small business failure:
- Competition
- Low sales
However, while the authors’ lists are adequate reasons for failure, the payroll professionals at The Payroll Department know firsthand about another danger zone for the struggling small business owner. Handling payroll and payroll taxes can be a mine field, especially for the novice.
We understand that a new business owner must very honestly assess her skill set by asking herself personal questions about her professional abilities. Without shoving aside the ego to examine one’s self with brutal honesty, it won’t take very long at all to find yourself in the middle of a big mess. So if you are considering the plunge into business ownership, ask yourself questions the following four questions in regard to payroll.
- Do I possess the organizational skills to promptly and correctly keep necessary payroll records?
- Do I consistently have time to devote to reading about payroll tax law changes?
- Do I immediately comprehend what I read about payroll and all the tax laws?
- If I accidentally make mistakes which result in hefty penalties from the IRS, can I confidently say I have the cash to cover those penalties without putting my business in jeopardy?
If you experience any anxiety when you ask yourself any of those questions, our friendly, informative experts at The Payroll Department are waiting for your call. Outsourcing payroll to a professional payroll provider can save you anxiety, time and money – in both the short- and long-term.
-Sherri of The Payroll Department Blog Team
