Deidra Graves, attorney with Graves Hawkins LLP, provided the 10 minute business presentation at the April 22nd, 2008 Network Plano Meeting. Deidra is a business attorney in Plano, TX and helps clients grow their business in a compliance and strategic manner. Below is her list of the "Top Ten Most Common Mistakes Business Owners Make":
Not forming a legal entity for your business
Not just forming an entity but forming the appropriate entity for your business, cash flows, taxation and liability protection.
Not keeping accurate books and records
How many of you at tax time can't find the deductible receipts you need to get the tax deductions you need? Get organized so you don't miss eligible tax deductions.
Not filing timely employment tax returns
The IRS has no patience with non-filers of employee related taxes. They will shut you down quickly and you do not have the "grace period" you may get with non-filing of personal taxes.
Treating Employees as Independent Contractors
The IRS will really come down on your company. The IRS may categorize your contract employees as W2 employees and impair you with back taxes and penalties and if you can't pay immediately they have the rights to seize assets, even close down your company. Call me and make sure you are handling those employees properly.
Co-mingling Personal and Business Assets
This will get you in big trouble with the IRS. They will assume you are cheating them out of taxes. What's worse is that you can possibly sever your liability protection. If you co-mingle these accounts and don't keep the line clear as far as cash-flows, then the courts won't see a seperation between the two if you are sued, even if you have a corporation for liability protection.
Not following Corporate Formalities
This includes having an annual meeting with officer's minutes. Your attorney will be instrumental in helping you with these "formalities".
Not planning for retirement early enough.
Owners tend to put everything into the company and see the company as their retirement. It is important once you get past the first few years and get the business established that you setup retirement accounts in case something happens to the business.
Giving away ownership too easily
Too often ownership is given to key employees, and given too easily. There are ways to give ownership-like rights in so far as incremental income based on business growth without passing on ownership rights which can cause problems if that employee leaves the company
Trusting others too readily - trust but verify
Make sure your agreements are written and not verbal. Involve an attorney to provide analysis of risk areas in new relationships, strategies, etc.
Not Talking to their attorney until it's too late
Partner with an attorney you feel comfortable that you can make a 5 minutes phone call to your attorney to get a quick viewpoint on your decision before you make it
Deidra Graves, attorney with Graves Hawkins LLP, did a great job in offering a thorough and very informative presentation for business owners. For more information about Deidra Graves, her attorney firm, or information about the 10 Mistakes Businesses Make, contact her at dgraves@graveshawkins.com
Graves Hawkins LLP
Looking to connect your business to other business professionals? Visit our next meeting of Network Plano.com and see if a professional business networking group is a fit for you. We meet every Tuesday in Plano, TX at La Madeleine restaurant in their private room at the Preston Road and Park Lane location. Contact us at info@networkplano.com for more information.
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