11 Things Every Small Business Should Do in January
Whether or not you believe in New Year’s resolutions, there are some things your business should do at the start of every new year to make sure you’re not only legally compliant, but also setting yourself up for success. Here’s our checklist of tasks all businesses should do every January.
- 1. Independent contractor review.* AB5 & AB2257 affect almost every business that works with, or as, an independent contractor. Assess your contractor relationships and make sure you’re in compliance so you don’t get sued or audited.
- 2. Renew licenses.* You’ll need to renew your local business license every year. Don’t forget about any other licenses or registrations you need to renew or update, such as your DBA or a registered trademark.
- 3. Pay your taxes. This might include paying your LLC or corporation’s annual Franchise Tax Board tax. Don’t forget to issue any W2s, 1099s, and schedule K-1s if these apply to you.
- 4. Contract review.* When was the last time you updated your client contract? Vendor contract? Employee contracts? The new year is a good time to review and update to make sure your contracts are still legally valid, protect you, and apply to your actual business practices.
- 5. Employment posters and handbook.* If you have employees, there are always new required employment posters that need to be displayed in January. Your employee handbook should also be updated at least once a year; January’s new employment laws means the beginning of the year is a great time to do this. Brush up on the new employment laws that may affect you.
LLCS AND CORPORATIONS:
- 7. Review your Articles.* Has anything changed that requires an amendment to your Articles of Organization/Incorporation?
- 8. Update your Statement of Information.* Corporations are required to update their SOI annually; LLCs are required to update every two years. If any changes in address or management has occurred this year, you’re also required to update immediately.
- 9. Review your operating agreement/bylaws.* Your business changes over time. Use the new year as a good opportunity to review your operating documents to make sure they still do what you want them to do.
- 10. Review your buy-sell agreement.* These provisions might be in your operating agreement or might be separate. Businesses often outgrow some of these provisions as the business grows. Review annually.
- 11. Hold your meeting.* Although annual meetings aren’t legally required for LLCs (like corporations), ABL recommends doing them anyway. It minimizes conflict and ambiguity, and leaves a healthy paper trail that strengthens your limited liability. Document all events that happen outside the scope of day-to-day operations that happened last year (ratify them), and all events that will happen this upcoming year (vote to approve them).
OTHER USEFUL TIPS:
- -Review your marketing plan. What will you do this year to continue to reach your target market and grow? Is it time to update your website?
- -Review your goals. What do you hope to accomplish this year, in five years, in twenty years? What can you do this year to get yourself closer to those goals?
- -Review your budget. Are there things you can cut down on?
- -Review your security. Do you need to tighten up your building or computer security? Do you need to retrain your staff? Change all your passwords at least annually. Consider using a password manager such as Bitwarden, OnePass, or LastPass. Our video, Cybersecurity for Small Businesses, might be helpful in this regard.
- -Review your pricing. Is it time for a price increase to keep up with inflation and demand?
- -Check with your estate planner. Has anything changed in your life that means you should update your will, trust, advance health care directive, or power of attorney?
- -Check with your accountant. What can you do this upcoming year to maximize deductions? How much should you put aside for estimated quarterly payments? How can you be proactive to set yourself out for ease and tax benefits next year?
- -Check with your insurance broker. Does your coverage still cover all potential issues, and give you enough to cover the likely damage? Do you need to get additional insurance? Can you get lower rates? Do you need to get life insurance, disability insurance, health insurance?
* The ABL Team can help with any of the asterisked items. Contact us.
This article was first published in 1/2020. It has been updated for 2021.