January, it’s a new year, new you! Resolutions and new health regimens. Planners and organizers. We take steps to get our health, and our lives back on track after a crazy year end. But it’s not just your body and your desk that need attention – your business needs a check-up too!
Your business in January of last year, may not be the same business it is today, so it’s a great idea to take a moment to check your business’ pulse and see if there are things that need updating or shoring up!
What should I review in my business at this “check-up?”
Entity
Is your business organized as an entity? If, it is – when is your annual report due? For LLCs it is typically on the anniversary date of filing. For Corporations, your annual report may be due not on your anniversary but within a certain period from your fiscal end of year. In Massachusetts, for example, your corporate annual report is due within two and ½ months after the end of the fiscal year. This would mean a March 15 filing for fiscal year end of December 31.
If you are a corporation, did you hold your annual shareholder’s meeting and Board of Director’s meeting? Don’t forget your minutes and any written votes.
If you are a sole proprietor, you should review your business revenue and expenses, profits and loss with a trusted CPA, EA or accountant and see if forming an entity would and making certain tax elections (like an S-Corp) would reduce your tax liability.
Tax Elections
Part of your annual business check-up should include a review of your P&L and forecasting where your business is headed financially.
If you’ve made an S-Corp election and are on salary, you may need to review with your CPA or EA whether your “reasonable” salary is still “reasonable” under IRS determination.
Insurance
Are your current insurance policies up to date and still adequate to protect your business and personal assets? Review your policies with your agent.
Website
Do you have a website? If your website allow for purchasing products or services, processing payments, uploading or downloading documents or information, or collects any personal information you should have a Terms of Use and Privacy Policy. This should both be reviewed annually and indicate the date of the latest review/update.
You should also be updating the copyright notice on your website to reflect the new year.
Contracts/Agreements
How are your client services contracts? Do these agreements still accurately cover the policies of your business? How about prices and payment processing? Have you experienced frequent pushback or full breaches by clients? It may be time to tighten up the terms.
Not using client contracts? If you are exchanging money for services, you really need client agreements in place and there’s no better time than the present to get that done! Start your year off right!
