Becoming an entrepreneur is a huge milestone, so ensure you start off on the right foot by improving compliance.
Starting a small business is a dream that many have, yet very few get to experience. It’s no secret that it’s a difficult journey, with a low long-term success rate. One of the most challenging aspects of running a small business is operating in a compliant manner.
Whether you are a small mom and pop retail operation with a physical brick and mortar location, or run an online service, you need to ensure compliancy in multiple areas. Doing so helps you run a smooth operation and it can protect you, legally, down the road in the event of any issues.
There are several things you can do to help improve the compliancy of your small business. I recently spoke with 10 small business owners and asked them to provide their best compliance tips, which are highlighted below.
1. Ensure Your Document Management Is Secure
“Using one central location to store all company documents and files is very convenient, but it can also make you extremely vulnerable. For example, services like Dropbox allow you to assign passwords to each file download link. Doing this allows you to create an additional layer of security.
This ensures that only your employees that need access to a particular file are able to access it, and in the event that an email containing a download link is compromised, someone wouldn’t be able to access the file without the required password. I would highly recommend protecting all company documents with very difficult passwords.”
—Kris Lippi, Broker & Owner of Get LISTED Realty
2. Have a Tracking System in Place to Log All of Your Expenses Daily
“The longer you wait when it comes to expense tracking, the more chaotic tax time will be. It’s easy to say you will get caught up on expense tracking at the end of the week or month, but that can quickly turn into several weeks or even months, creating a complete mess for your accounting.
There are many expense tracking solutions that allow you to effortlessly track and record all of your business expenses without extra effort. When you combine the ease of expense tracking software and the dedication to keep on track of expenses daily, it ensures your business is always up-to-date. This is especially helpful for small business owners that file his or her own taxes.”
—Steve Rad, Co-Founder of Display Overstock
3. Use Time Tracking Software to Evaluate Productivity and Monitor Accountability
“When you track the hours that you have spent on a particular client or project, it helps you to evaluate your overall productivity. This is great for identifying areas that need to be improved, but it also serves another very important purpose.
Using time tracking software allows you to record every component of a project, including your employees’ time. If there is ever a dispute involving the number of hours worked, or overtime pay, you will have everything recorded, giving you a historical record for everyone on your team. Even if you outsource your payroll, you should make it a priority to keep internal records as well.”
—Andy Croft, Co-Founder of Font Bundles
4. Manage Every Aspect of Your Projects
“You need to be well aware that disputes between clients and customers will occur, even if you perform every job and task correctly as agreed. When you use project management software it helps you keep track of every step from beginning to project completion.
In the event of a dispute over hours worked on a project or tasks completed, you will have detailed records of everything. You can include employees, outsourced contract workers into each project, helping you to track every component of a particular project. You can even invite your clients to join a project, allowing them to monitor the progress along the way.”
—Jake Braun, Co-Founder of Kapok Marketing
5. Use a Third-Party Invoice & Payment Solution
“Invoicing software saves you time and makes your small business look very professional. You can automate your entire accounts receivable department, eliminating the need to chase down payments, collect checks and waste time at the bank. Not only is the ability to accept credit cards on your invoices convenient for both your business and your client, but it also ensures that your payment processing is compliant.
When you use a payment processing option such as Stripe or PayPal, it keeps all charges—both one-time and recurring—off your website. This eliminates the need to store customer payment information and worry about financial compliancy.”
—James Goodnow, Founding Partner of Lamber Goodnow
6. Invest in HR Software
“There is an affordable SaaS (software-as-a-service) application for almost everything these days, including Human Resources. It’s important that you store all of your employee data in a safe and secure manner to remain compliant, and it can also help you scale your business more effortlessly.
As you grow, you will have more employees to manage and track, eventually requiring a dedicated HR employee. If you use HR software from the start, it will make their transition much easier, giving you a solid infrastructure. Even small budgets can stay on top of their HR departments with the several affordable plug-and-play solutions available.”
—Dr.Vikram Tarugu MD, CEO of Detox of South Florida
7. Hire the Right Attorney for Each Need
“Not every attorney is well versed in every specific legal category, and hiring the wrong
attorney can be costly. For example, if you need to file a trademark to protect your brand, hire a trademark attorney. Just because you have worked with a particular attorney in the past, it doesn’t guarantee they will be the right individual to handle all of your legal needs.
Just like you hire employees for specific needs, you must select your legal counsel in the same manner. When your business is legally sound from the beginning, it allows you to scale growth without costly mistakes, in both terms of money and time wasted.”
—Christopher VanDecar, Owner and CEO of Optimally Organic
8. Keep All Employee Communication Centralized
“All businesses, regardless of their size, should create a company policy that prohibits communication outside of the approved channel. Too many businesses have information floating around on various messenger services, social media and email. This not only makes it hard to keep everything organized, but it can also put your information at risk.
I would suggest finding one communication platform that fits your needs and enforces a policy that requires all company communication reside on that one platform. Many small businesses are finding Slack to be their preferred choice because of its simplicity and many features.”
—Lori G. Polacek, MD, Founder of Polacek Center for Plastic Surgery
9. Create a Safe Online Experience with an SSL Certificate
“If you run a small business, you should have a website. And if you have a website there is absolutely no reason that you shouldn’t be using an SSL certificate. A lot of small business owners think they don’t need a secure website if they aren’t selling goods or services online and accepting payments. This is a common misconception because all of the data—even customer names and email addresses—need to be protected.
When you install an SSL certificate on your server, it triggers the HTTPS protocol and allows secure connections from your server to the browsers your website visitors are using. It’s low-cost insurance to make sure all data remains safe and secure.”
—Eduardo Perez, Founder of Easy Ukulele Songs
10. Obtain the Correct Business Insurance
“Not every business will legally require insurance, but small business insurance is something that you should seriously consider. It will be very difficult to grow your business if you face financial hardships that would have been avoided if you just carried a basic insurance policy.
Not only can it protect your business, but it can also protect your team members, vendor partners and even your customers and clients. It can protect your well-being in the event that a lawsuit is filed against your business. Many business owners only worry about workers’ compensation insurance, yet fail to take out a small business insurance policy, which offers a great deal of protection.”
—Ryan Hulland, President of Netfloor USA
11. Create a Policies and Procedures Manual
“Many small businesses don’t feel it’s necessary to create a policies and procedures manual
simply because of their small size, but it’s something every business needs to do. It doesn’t
matter if you have five employees or 500—consistent policies and procedure need to
be followed by everyone to ensure compliance.
Things like security and storage of employee data, acceptable employee computer use and
personal conduct needs to be outlined in a manual for all to read and sign off on. The key is to reinforce your policies. Doing so can prevent a legal mess down the road.”
—Chris Moberg, President of Slumber Search
12. Ensure That Your Business Isn’t Breaking Any Laws
“The worst thing you can do is assume that your business isn’t breaking any laws. If you miss
even the smallest detail, it could end up costing you a small fortune, or even potentially cripple your company, down the road.
There are several state-specific licenses for some businesses, and it’s always a good idea to
consult with a legal advisor to make sure all of your bases are covered. Markets and laws are
constantly changing, so it’s always a good idea to do a periodic legal check-up. A slight oversight can come back to bite you.”
—Bob Jenson, CEO of Small Business Loans
Don’t ignore simple compliancy as it can come back to bite you down the road. Owning a small business comes with enough risk and uncertainty already, so help improve the odds of long-term success by running a compliant business operation.