Kudos!  Your Business is Growing... Avoid these TRAPS!

Posted by Mary Thomas, CPA-Attorney on Jan 16, 2020 10:15:00 AM

iStock-983629936

Congratulations! I LOVE to hear that anyone’s hard work is translating into more money.  After getting off the initial happiness high of hearing this, I go into protection mode.  What’s protection mode?  If we have ever met, you know that I guard any progress like a hawk!  I want you to keep, grow, and enjoy the fruits of your labor. 

Because I can’t meet everybody…more’s the pity!  Here are my top three no-no’s when your business is growing. 

1.  Not having a system in place to check that everything and everyone is working to maintain the quality of your product, service, or brand.   Who hasn’t made a mistake?  We all do….Optimally, you want to identify and address mistakes or oversights before they impact your client.  During any expansion, part of the transition is letting the new system operate.  Some people let the new system work with no apparatus to quickly identify things that don’t work well.  Don’t assume that every new process or person is going to work out as expected.  Have some system that tells you what needs to be addressed.  In the beginning, there’s usually something.

2.  Not addressing all registration, tax, and other regulatory aspects of business expansion.  When expanding into a new jurisdiction, carefully plan the expansion.  Are you required to register to do business in the state or locality?  Are you required to pay corporate income tax?  Are you required to register with the state tax authority?  Should you collect sales or use tax?  Is your product or service taxable in the new jurisdiction?  When should you register, if there is a requirement?  How are you going to comply with all your responsibilities?  Do you need to have support until you get your footing?  These are a lot of questions.  This list is not exhaustive.

3.  Not responding to client efforts to communicate with you.  Who hasn’t dropped a ball or hired someone who didn’t deliver the expected quality product?  I could tell you stories!..but I won’t.  The deal is that it’s not uncommon or a deal-breaker to make a mistake with a client’s account.  A deal-breaker is the appearance that you don’t care.

When you transition an account to someone, pay attention to your client’s experience.  Read and respond to emails.  Call back when someone reaches out.  I know it sounds like common sense.  It is.  But monitoring someone or an account can be a challenge when you are off doing other things.  The truth is you are not doing anything more important than valuing  the clients you worked so hard to get.  It’s easier to take of care of an existing client than to get a new client.

So there you have it.  I have lived through the efforts of several vendors who have scaled their businesses.  Some vendors did this very well.  Other vendors did not and were quickly replaced.  Most people cheer the success of others.  But they won’t pay for a perceived decrease in the value of a service.  Scale responsibly.  Scale well.  And make sure that when you scale, you make money and enhance your reputation.

Topics: Goals, Business Management, Nexus, State Tax, Business Owners

“The content of this website is intended to convey general information only and does not represent accounting, tax or legal advice or opinion. Because tax laws, policies, and applications are dynamic and fact-specific, please consult with a state tax professional for a complete analysis of law as it may apply to your specific situation at a particular time. If you require an in-depth review of a specific fact situation, please contact our offices to establish a client relationship for opinion and advice.”