For some people starting a business looks pretty easy and for some impossible. The reality is that all depends on the information we have about opening a business or putting ideas in action. Starting a business involves planning, having key financial decisions and completing a series of legal activities. This page may help you go through the process of opening your business, plan, prepare and manage your business.
1- Write a Business Plan
A business plan is an important section of your business. A step that can be the map for your business to success. The business plan is a living document that usually projects the next three to five years and shows the routs that your company will take to grow.
1- Executive Summary
And the important part of a business plan is the executive summary where you indicate the idea of your business by explaining the current situation, the plan you have in mind for your business and the reason your business will succeed. The executive summary is where you can attract the investors. The interesting thing is that this section shows the strength of your business plan and logically should be the last part of your plan but it appears in the beginning of your plan.
Based on the stage of your business the executive summary should include couple of important points.
If your business is up and running, make sure you have the following information in your summary:
- The Mission Statement – Explains what you do
- Company Information – Telling a short history of your business such as date of establishment, name of founders, number of employees and the location
- Business Growth Report – such as financial or market highlights
- Products / Services – Short describe of your products or services
- Financial Reports – If you look for financing, your should include reports from your bank and investors
- Future Plans – Where you see your business in future
If you are not an established business and you are starting a business, you need to write about your experience and knowledge and the reason made you to start this particular business.
The executive summary is the last section you write, so the first section of the business plan that you should start writing is the company description.
2- Company Description
- Describe your business and count the marketplace needs that you are trying to cover
- Explain how your products or services can cover the needs
- Mention specific consumers or business type that your company can serves
- Tell why your business can win the competitions by mentioning the advantages such as location, experience or special ability that will bring value to your clients.
3- Market Analysis
Describe your business Industry and Outlook – present and past of the industry.
Target Market – having too many target markets is not a strength point for your business. Narrow them down to manageable size and list information such as distinguishing characteristics, size of the primary target market, the market share you can gain, pricing and gross margin targets.
Competitive Analysis – You also need to do a competitive analysis of your product or services by listing Market shares, strengths and weaknesses, the importance of the market to the competitors, opportunities for you in the market, barriers that may harden your way of entering the market such as technology change, costly investments or lack of experienced and reliable employees.
Regulatory Restrictions – List all type of governmental regulatory requirements or customers conditions affecting your business, and how you’ll comply.
4- Team & Management
Next is to write about the structure of your business or organization, details of the ownership, management and expertise of all members. Their roll in your business, their background and the reason they are part of your team. List their responsibility as well as description of each department and its functions. Include the salary, benefits and promotions you offer to your employees.
You can use this list to gather the information for your team.
- Names of owners
- Percentage ownership
- Extent of involvement with the company
- Forms of ownership (i.e., common stock, preferred stock, general partner, limited partner)
- Outstanding equity equivalents (i.e., options, warrants, convertible debt)
- Common stock (i.e., authorized or issued)
- Management Profiles
It’s a strong factor to success that you have ability and track record of your management team, so a reader should know about key people in your company and their background:
- Position and duties
- Primary responsibilities and authority
- Unique experience and skills
- Prior employment
- Special skills
- Past track record
- Industry recognition
- Community involvement
- Number of years with company
- Compensation basis and levels (not too high or too low)
5- Service or Product Line
Next section of the business plan the description of services and products you offer along with benefits to your customers. The list should include:
- Full Description of Your Product / Service
- Details About Your Product’s Life Cycle
- Intellectual Property
- Research and Development Documents
6- Marketing & Sales
Define your marketing strategy even though there is no single way of marketing. The marketing strategy is an ongoing process and unique for each business. This step is important as it’s the process of finding customer and they are the lifeblood of your business. The most common way of marketing is the communication strategy where you indicate how you are going to reach your customers such as promotions, advertising, public relations, personal selling and printed materials such as brochures, catalogs, flyers etc. At the same time you may use internal strategy that limits to increasing your human resources, buying another business, branching etc. After developing the marketing strategy you can define your sales strategy and plan to sell your product. To make a sale you can do:
- Sales force: Hiring internal or independent representative(s), training them and pay them
- Your sales activities: Make a list of your prospects, optimize the contacts, choose the customers with potential to buy, identify the number of sales calls you will make over a certain period of time, then determine the number of call you had to make to do a sale and amount you have made.
7- Funding Request
You may need funds for your business for any reasons, capital expenditures, working capital, debt retirement, acquisitions etc, so in order to be able to ask for funding you need to list some information:
- Current funding requirement
- Future funding requirements over next couple years
- The end use of the fund
- Any strategic financial situational plans for the future
Your funding request needs to be supported by a historical and prospective financial report.
8- Financial Projections
Critical financial statements that should be included in your business plan (such as data from last couple years, income statements, balance sheets and cash flow statements) are Historical Financial Data (when you own an established business) and Prospective Financial Data (what you expect from your company)
9- Make Your Business Plan Stand Out
Answer the following questions to help your business plan to stand out more:
- Is the market you serve the best one for your product or service?
- Are the benefits of dealing with your business clear?
- And are they aligned with customer needs?
If you don’t have the correct answer, go back and revisit the foundation of your business plan.
Be clear about what you have to offer, don’t become a”master of none”, identify your niche based on your own market knowledge and by getting information about your competitors where they are well-established or areas that are ignored by them as well as potential opportunities for your business.
2- Choose Your Business Structure
There are different types of businesses and companies. You need to get some information about them to be able to choose the one that fits your business.
1- Sole Proprietorship
Simplest and most common structure to start a business. In sole proprietorship type of business one individual owns and runs the business.
How to form a Sole Proprietorship
In reality you own a business without knowing if you have an ability that people will pay you to show it therefore you are a sole proprietor. The only necessity is to obtain a business license and permits for your activity. The regulations for each business in different state might be vary. You can visit your City or State business departments/websites for more details and information.
When you have a sole proprietorship you can choose to have your business in your name. You can also have a different name known as assumed name or DBA name, standing for “Doing Business As” which is a unique name.
In sole proprietorship your will use Schedule C to report your income/losses/expenses and use standard Form 1040. From the Schedule C, the “bottom-line amount” will be transferred to your personal tax return. The income taxes, including self-employment and estimated tax should be paid by business owner as the owner and business are one and the same. For more information about sole proprietorship taxes and other forms visit IRS.gov.
Advantages of a Sole Proprietorship
- Easy and inexpensive to form
- Complete control in decision making process
- Easy tax preparation. (lowest business structure rate)
Disadvantages of a Proprietorship
- Liability for the debts and obligations of the business and employee actions.
- Problem in raising money as you can’t sell stock
- Hard to getting loans from banks because of a perceived lack of credibility when it comes to repayment if the business fails.
- Heavy burden. All the pressure and stresses are on you when you have all the control in business.
2- Limited Liability Company
Also known as LLC which provides the limited liability features of a corporation and the tax efficiency’s and operational flexibility of a partnership. Owners are called members and they can be consist of a single individual (one owner), two or more individuals, corporations or other LLCs.
Opening an LLC
- Choose a unique business name that includes “LLC” and has no restricted words such as “bank” etc.
- File the articles of organization which is a simple document that legitimizes your LLC and includes information about your business with the Secretary of State or other offices such as the State Corporation Commission, Department of Commerce and Consumer Affairs, Department of Consumer and Regulatory Affairs, or the Division of Corporations & Commercial Code.
- Create an Operating Agreement which it structures your LLC’s finances and organization, and provides rules and regulations for smooth operation and includes percentage of interests, allocation of profits and losses, member’s rights and responsibilities and other provisions.
- Obtain Licenses and Permits.
- Hiring Employees. If you are hiring employees, read more about federal and state regulations for employers.
- Announce Your Business if your state requires to. Check with your state’s business filing office for requirements in your area.
All federal income taxes are passed on to the LLC’s members and are paid through their personal income tax.
LLCs must file as a corporation, partnership, or sole proprietorship tax return.
Here are the tax forms that need to be filed out depending on the classification of your LLC:
- Single Member LLC Form 1040 and Schedule C like a sole proprietor
- Partners in an LLC file a Form 1065
- LLC designated as a corporation files Form 1120
Advantages of an LLC
- Being protected from personal liability for business decisions or actions of the LLC, but it’s limited and members are not necessarily shielded from wrongful acts.
- Members share the profits and loss and the percentage each make.
Disadvantages of an LLC
- An LLC has limited life and will be dissolved if a member leaves. There is an option that you can include in your operating agreement to prolong the life of the LLC if a member decides to leave the business.
- Members of an LLC are considered self-employed and must pay the self-employment tax contributions towards Medicare and Social Security.
Also known as User-owners business is directed by elected board and officers that run the cooperation white rest the the members have power to vote and control the direction of the cooperative.
Members can buy shares and become part of the cooperative, though the amount of shares they hold does not affect the weight of their vote. This type of structure is common in the healthcare, retail, agriculture, art and restaurant industries.
Starting a Cooperative
A group of members agree on a common need and a strategy on how to meet that need. An organizing committee conducts exploratory meetings, surveys, and cost and feasibility analyses before every member agrees with the business plan. Some cooperatives are incorporated and to be they must complete the following steps:
- Filing Articles of Incorporation that will legitimizes the cooperative which includes information about the cooperative.
- Create Bylaws that comply with state law and are essential to the success of your cooperative. Bylaws list membership requirements, duties, responsibilities and other operational procedures that allow your cooperative to run smoothly.
- Create a Membership Application to recruit members and legally verify that they are part of the cooperative which includes member’s information, rights and benefits.
- Conduct a Charter Member Meeting and Elect Directors.
- Obtain Licenses and Permits that are needed to run a business.
- Hiring Employees.
Cooperatives do not pay federal income taxes as a business entity, instead, the cooperative’s members pay federal taxes when they file their personal income tax. Cooperatives must follow the rules and regulations of the IRS’s Subchapter T Cooperatives tax code to receive this type of tax treatment
Advantages of a Cooperative
- Less Taxation. Members of a cooperative are only taxed once on their income from the cooperative and not on both the individual and the cooperative level.
- Funding Opportunities. There are a variety of government-sponsored grant programs to help you start.
- Reduce Costs and Improve Products and Services. Suppliers are more likely to give better products and services because they are working with a customer of more substantial size.
- Less Disruption & More Continuity. Members in a cooperative can routinely join or leave the business without causing dissolution.
- Democratic Organization. one member-one vote.
Disadvantages of a Cooperative
- Larger share investment in the cooperative does not translate to greater decision-making power so the big investors hesitate to bring cash flow the the cooperative.
- If members do not fully participate and perform their duties, the business cannot operate at full capacity. Lack of participation could risk losing members.
An independent legal entity owned by shareholders. The corporation is held legally liable for the actions and debts the business creates.
Corporations tend to have costly administrative fees and complex tax and legal requirements that’s why they are good for established, larger companies with multiple employees.
Corporations offer the ability to sell ownership shares in the business through stock offerings.
Starting a Corporation
- Establish your business name and register your legal name and DBA with your state government with corporate designation (Corporation, Incorporated, Limited) at the end of the business name.
- File necessary documents with your state’s Secretary of State office. Establish directors and issue stock certificates to initial shareholders in the registration process if the office required.
- Obtain business licenses and permits that you’ll need to run the business.
- Register with the IRS and state and local revenue agencies if needed, and receive a tax ID number or permit.
- Hire employees.
Corporations is a separate tax-paying entity and are required to pay federal, state, and in some cases, local taxes.
Corporations pay income tax on their profits. Sometimes they are taxed twice; when they make profit, when dividends are paid to shareholders on their personal tax returns. IRS Form 1120 and 1120-A, U.S. Corporation Income Tax Return is for corporations to report their taxes.
Employees pay income tax on their wages if they are shareholders. The corporation and the employee each pay one half of the Social Security and Medicare taxes.
Advantages of a Corporation
- Shareholders’ personal assets are protected. They are only accountable for their investment in stock of the company.
- Easy to raise capital for the business through the sale of stock.
- Filing taxes separately from the owners. When owners get paid by salaries or bonuses they pay taxes on corporate profits which is usually lower than a personal income tax rate.
- Corporations attract good employees as they offer competitive benefits and offering ownership through stock options.
Disadvantages of a Corporation
- Corporations are costly and time-consuming.
- Double Taxing in some cases.
- Highly regulated by federal, state or local agencies which increases record-keeping burdens.
When more than one people share ownership of a single business they created the partnership structure. Partners contribute to the business and shares in the profits and losses. A legal partnership agreement development is strongly recommended for partnership business.
Types of Partnerships
- General Partnerships assume that profits, liability and management duties are divided equally among partners.
- Limited Partnerships – partnership with limited liability. Allows partners to have limited liability as well as limited input with management decisions depending on investment percentages. Good for short-term projects.
- Joint Ventures – general partnership for limited time or for one project.
Forming a Partnership
Register your business with Secretary of State’s office.
Establish your business name as indicated in partnership agreement.
Obtain business licenses and permits. Regulations vary by industry and state.
If you are hiring employees, read more about federal and state regulations for employers.
Register with the IRS, register with state and local revenue agencies, and obtain a tax ID number or permit.
To report the income file annual information return, deductions, gains and losses from the business’s operations. The business passes through all profits or losses to partners.
Advantages of a Partnership
- Easy and Inexpensive
- Shared Financial Commitment
- Complementary skills of each partners
- Partnership incentives often attracts highly motivated and qualified employees.
Disadvantages of a Partnership
- Partnerships retain full, shared liability among the owners. Partners are also liable for the business debts and decisions made by other partners.
- Multiple partners, brigs up disagreements.
- Unequal contribution of time, effort, or resources can cause discord among partners.
6- S Corporation
For information about starting an S Corporation structure please visit IRS website.
3- Choose & Register Your Business
1- Choose Your Business Name
The name of your business reflects your brand identity and needs to be properly registered and protected for long term.
When Naming Your Business:
- See how your name will look like on the website, as part of your logo and in online media.
- Try to choose a name that matches with business philosophy and culture and appeal to your business market.
- Make sure to pick a name that hasn’t been claimed by others yet.
Before you pick a name, use the U.S. Patent and Trademark Office’s trademark search tool to see if a similar name, or variations of it, is trademarked. Picking a trademarked name can cost you fortune.
Website (URL) availability
Do a simple web search and see if the website with your chosen name is available. It’s very important to have a same URL as your business name as it can be used as online address for your business. Also make sure to create or reserve the email addresses with the name of your company in all major free mailing platforms such as gmail, yahoo, bing, hotmail, aol, outlook etc.
As soon as you picked the name of your business, claim your accounts in all social media websites.
Apply for Trademark Protection
The name of your business is your most valuable business asset and it is worth protecting by having it trademarked. Trademark will protect the work, name, symbol, logo and tagline of your business name.
2- Register Your Business Name
By registering your business name (DBA) you are letting your state government know that you are doing business as a name other than your personal name or the legal name of your partnership or corporation. Depending on where you business is located you will be obligated to register your DBA with your county clerk’s office or with your state government.
3- Register With State Agencies
Corporations, nonprofit organizations and limited-liability companies or partnerships require to register with state government. A solo proprietorship does not need to register the business in the state level but many states require the owners to use their own name for business with a DBA. You can find more info about requirements in the state of Nevada here.
4- Choose Your Business Location & Equipment
Small business owners will face this important decision when they think about having a business location.
Choosing a location requires:
- Detailed planning and research
- Looking at demographics
- Assessing the supply chain
- Scoping the competition
- Staying on budget
- Understanding state laws and taxes etc
Answering couple of questions may help you choose the perfect location for your small business.
- Is the location match with the image you want to create for your business?
- Are the businesses around the place complementary or competing?
- Does the area have available potential employees?
- Is there possibility of expanding the business in case of growth?
- Are supplier close to you and Will they find you easily?
- How is the safety of the area? Will you and your employee feel safe to walk to your office? Will you rest assure at night when you leave your office?
- Can you or would you be allowed to do business in your chosen location?
- Is the location business ready or do you have to spend on renovation, decoration or network setups?
- How are the income and sales tax rate as well as property taxes?
- What is the minimum wage of the state?
- Is the area business friendly? Are there any local community resources to help you start your business?
There are zoning regulations that may not let you to do business in certain locations. If a property is a zoned for residential uses you can not do business and use for commercial purposes unless there is a change in zoning ordinances.
The local planning agency has the information about how the property is zoned. Do a quick search by name of your city or state and “planning” to find these agencies.
Home-Based businesses also should be aware of some restrictions regarding the zoning regulations.
A home-based business owner is not allowed to:
- make any exterior physical changes to the home
- do business activities / storage outside of house
- put up displays, signage or park commercial vehicles
You can find more about zoning and regulations here for state of Nevada.
Renting Physical office location
One of the exciting steps in your business life will be leasing a physical location which might be also one of the largest expenses you may have so it will be smart if you do your research well before acting.
- Negotiate on your lease agreement in one or two year lease with renewal option with no change in amount.
- Consult with a knowledgeable real estate lawyer and ask your broker to help negotiating.
- Find our what are maintenance fees, CAM (common area maintenance fee)
- Insurance rate for the location
- Maintenance and repair fees if you are responsible for it such as AC, Plumbing, flooring etc.
There are couple of items in your lease that if you pay attention to them it may help you protect your investment:
- Sublease – Allowing you to lease a corner of your office to another small business.
- Exclusivity Clause – Prevents the leasing company from leasing a space on the shopping center or property to a competitor business.
5- Business Licenses & Permits
1- Federal Licenses & Permits
There are some businesses that need to be supervised and regulated by a federal agency. Starting these type of businesses need federal license and permit. Here are theses type of businesses:
- Manufacture, wholesale, import, or sell alcoholic beverages at a retail location.
- Businesses involve the operation of aircraft; the transportation of goods or people via air; or aircraft maintenance.
- Manufacture, deal and import firearms.
- Businesses engaged in any wildlife related activity, including the import/export of wildlife and derivative products.
- Commercial fishing businesses.
- Importing and transporting animals, animal products, biotechnology or plants across the state.
- Providing ocean transportation or facilitate the shipment of cargo by sea.
- Drilling for natural gas, oil or other mineral resources on federal lands.
- Producers of commercial nuclear energy and fuel cycle facilities as well as businesses involved in the distribution and disposal of nuclear materials.
- Businesses broadcasting information by radio, television, wire, satellite and cable.
- Operating oversize or overweight vehicles
2- State Licenses & Permits
If you are starting a business and going to operate it legally, you need to obtain license or permit. Licensing and permit requirements depending on the type of your business and your state.
You can learn about specific license and permit requirements in the state of Nevada here.
6- Business Financials
1- Estimating Startup Costs
You might be able to start a business that needs a small budget while others may require considerable amount of cash or equipment to start theirs.
- Estimate the cost of doing business for the first month (one time fees or ongoing costs).
- Decide whether they are essential or optional (startup budget should only include those things that are necessary).
- Separate the type of costs to fixed and variables. Fixed such as rent, utilities, administrative, insurance etc, and variable such as inventory, shipping, packaging, commissions etc.
2- Personal Finances
It will take time to get to the point that your business brings you profit, so before starting get your finances in order.
- Write a monthly budget for your household expenses.
- Check your personal credit history and make sure it is in a good shape.
Maintaining household expenses is vital to the success of your business and lenders will check your credit history as you don’t have business financial history.
Starting a business can be a tremendous strain on your personal finances. It takes time before your new venture turns a profit and provides financial support for you and your family. Before starting a business, it is important to get your finances in order.
3- Financial Statements
Financial statements are the road-maps to put you in right direction and prevent costly breakdowns from happening. The primary financial statements are balance sheets and income statements that can be used for tax preparation or loan requests.
Balance sheet includes assets, liabilities and net worth as well as equity.
- Cash, account receivable, inventory and notes receivable are your Current Assets.
- Land, building, machinery and equipment, furniture, fixtures and leasehold improvements are your Fixed Assets.
- Research and development, Patents, market research, goodwill and organizational expenses are your Intangibles Assets.
Liabilities and Net Worth
Liabilities and net worth are sources of cash. Current liabilities are the most nervous creditors. Net worth is the least nervous and never due obligations.
Liabilities and net worth are sources of cash listed in descending order from current liabilities to net worth.
There are two sources of funds: lender-investor and owner-investor. Lender-investor funds consist of trade suppliers, employees, tax authorities and financial institutions. Owner-investor funds consist of stockholders and principals who loan cash to the business. Both lender-investor and owner-investors have invested cash or its equivalent into the business. The only difference between the investors is the maturity date of their obligations and the degree of their nervousness.
If you take out the total liabilities from the total assets you will have the Equity which is the net worth. The last to mature source of funds.
The income statement, also known as the profit and loss statement, includes all income and expense accounts over a period of time. This financial statement shows how much money the business will make after all expenses are accounted for. An income statement does not reveal hidden problems, like insufficient cash flow. Income statements are read from top to bottom and represent earnings and expenses over a period of time.
4- Cash Flow Analysis
For some small businesses, cash is plays a huge role. It’s needed to start, operate and expand the operations. Many small business usually are troubled to manage and maintain their cash. Every day operation needs cash available and inaccurate cash flow analysis will have negative effect on the operation. Cash flow is the money transactions into your business and out of it.
In another word cash flow is “inflow”: money coming from operations such as the sale of goods or services, loans, lines of credit or asset sales, and “outflow”: expanding of business, loan payments or business purchases.
Cash flow analysis statements are:
- Operating activities: Net income and loses.
- Investment activities: Report of inflows and outflows.
- Financing activities: Financing related cash flow trend.
5- Breakeven Analysis
Breakeven Analysis is for to know when you can expect a profit form your business.
Identify your fixed costs (which do not vary with sales volume) and variable costs (that change with sales volume). take out variable cost from unit selling price. divide fixed costs to the result and you will have the breakeven point. The Analysis of the breakeven will help you determine the time your business will cover all the expenses and will begin to make you profit.
7- Filing & Paying Taxes
1- Obtain Federal Business Tax ID
An Employer Identification Number (EIN) is also known as a Federal Tax Identification Number and is used to identify a business entity. You can apply for an EIN apply online. Use these links for questions and steps to obtain your EIN.
- Do I Need an EIN?
- Do I Need a New EIN?
- How to Apply for an EIN
- How Long Will it Take to Get a Number?
- Lost or Misplaced Your EIN?
- How EINs are Assigned and Valid EIN Prefixes
- Canceling an EIN – Closing Your Account
- Who is a Responsible Party?
2- Determine Your Federal Tax Obligations
Each form of business has it’s own type of tax return that needs to be filed. There are different type of business taxes which are State Income tax, self-employment tax and taxes for employers. More information can be found at IRS website.
Federal Income Taxes
Here you can find the federal tax form you need to file according to your business type:
State Income Taxes
The state tax requirements depends on the type of your business. Each state has its own rules and regulations. You can find more info at your state tax website or contacting the appropriate body.
In addition to federal employment taxes, business owners with employees are also responsible for paying certain taxes required by the state. All states require payment of state workers’ compensation insurance and unemployment insurance taxes.
8- Hire & Retain Employees
1- Hiring First Employee
It’s a good new when you are struggling to keep up with the business, and yes, that’s the time to hire some help.
Get your Employer Identification Number (EIN)
You will need EIN which often referred to as an Employer Tax ID (TID) for reporting tax or information about your employees to IRS. You can apply for EIN online or contact the IRS by calling 800-829-4933
Employee Eligibility Verification
According to Federal law employers must verify an employee’s eligibility to work in the United States within tree days of hiring. Use Form I-9 is the employment eligibility verification form that needs to be kept for three years after date of hire.
New Hire Reporting
When you hire or re-hire a new employee you must report to IRS within 20 days
Workers’ Compensation Insurance
If you have employees your are required to carry workers’ compensation insurance coverage. There are commercial carriers or state’s workers compensation insurance program to use.
Post Required Notices
Employers are required to display certain posters in the workplace that inform employees of their rights and employer responsibilities under labor laws.
Be Organized and Keep Workplace Informed
Beside reporting your taxes you may maintain a healthy workplace and provide benefits as well as keeping employees informed about your plans and policies.
2- Hire a Contractor or an Employee?
As a business owner you have option to hire a contractor or employee as help depending on your need. Independent contractors operate under different business name as yours, they may have their own employees, they invoice for their completed work, can have more than one client, they have their own tools and they keep their business records themselves. Employees will perform duties that are given to, they get trained for the work that should be done and they work only for one employer.
When you get help from independent contractor you have saved on labor cost, Eliminated some liabilities and you have freedom of hiring and firing the employee if it’s not a good fit for you.
3- Employment Background Checks
In order to make the best decision in hiring employees you need to have some information from the past of the candidates. A credit report, criminal records, medical records, bankruptcies, military service and school records as well as workers’ compensation records, which ever you are allowed to have access can help you determine if the candidate is a good fit for the position you have open.
4- Employee Benefits
The same way that employer has options to hire employees, employees also have option to work for a company or not. Offering optional benefits beside required benefits can compensate employees. Some benefits are required by law and has to be offered to employees.
- Social security taxes: Employers pay same rate paid by their employees (required)
- Unemployment insurance: Required for some businesses (check with your state’s workforce agency to learn more)
- Workers compensation: A required insurance that a business with employees must carry.
- Disability Insurance: Partial wage replacement insurance coverage that is required in some states.
- Leave Benefits: Not required benefits by law such as holiday and vacation, jury duty, personal leave, sick leave, funeral and bereavement leave.
5- Job Descriptions
Job description is a summary that ensures employees and employer are fully aware of their roles and what they will be held accountable. At the same time job description will help to attract the right candidates for the available position and will give ability to manage employees.
Have your job description clear and accurate with a careful analysis of the important facts such as tasks, the ways to complete the tasks, purpose and responsibilities, relationship between jobs and qualifications.
Try to avoid having things like inflexibility in your job description. When the business grows a flexible job description encourages employees to grow within their position and contribute to your business accordingly.
And at the same time there are important items that need to be included in the job description such as job title, purpose statement (adjective), nature and level of the job, broad functionality and scope of the position, list of duties and important tasks, description of the relationships and role of all the positions inside of the company, job specifications, standards and requirements, the location where the job will get done, and equipment and tools to be used.
Source: Small Business Administration.