Tips To Help You Run Your Business From Afar
Not only do you still own your business, you enjoy the work associated with business ownership and are not quite ready to entertain the idea of retirement. But you’re also interested in the idea of moving south.
Is such a setup even possible?
Well, you may have to let go of some of your preconceived notions, but if you’re diligent about the three T’s – technology, trust and taxes – the answer is yes, it can be done. This article will take a closer look at the “three T’s,” to help you determine if running and protecting your business from afar is a practical solution for you.
Technology
Computers, email, internet, cell phones, Voice over Internet Protocol (VoIP), software and video conferencing have made working remotely logistically possible and virtually seamless. But while having all of this technology readily available is great, don’t overlook data security.
Enact security measures.
Don’t forget to focus on the security associated with the applications you use and your internet connection. When working remotely, many businesses will use online programs such as QuickBooks®. Just remember that online programs can also leave you vulnerable. Even though they come with their own security, you should have your own defenses in place as well. And be sure to maintain smart passwords, too. (Because we just can’t say it enough!)
Protect company data.
From data storage and tracking productivity to safe file transfers and communication, cloud computing has helped us all be more productive from any-where, at any time. Just remember to enact the proper policies and procedures. For example, how often do you back up your data? Are your laptops encrypted? And once you have a plan in place, don’t forget to test your equipment and processes several times before going live. Dry runs are crucial to ensure that everything works as it should.
Trust
Trust is paramount.
Not only do you have to trust your IT department, you must be able to trust that your staff’s dedication to efficiency and productivity doesn’t suffer while you’re running the company from afar. Your home base should be guarded by someone you have faith in to do the job (and they need to know you’re looking to them in this capacity. In fact, you should start training this point person early – preferably as soon as you start preparing for your move.
Train Early.
It is critical to get the processes cemented and confidence built up before you physically exit the business and transition to working remotely.
Put In The Face Time.
Weekly check-in meetings are a great idea and instead of paying regular travel expenses, consider utilizing video conferencing. “Face time” can have several benefits – your staff needs to know that you are still present and actively engaged in the business. It’s also important to set clear and specific expectations with regard to this communication, including establishing a regular day and time to conduct these meetings.
Taxes
As you can imagine, working remotely comes with a lot of state and local tax considerations. This type of arrangement will undoubtedly result in an increased level of nexus and filing requirements. Be sure to comply with state laws and understand how different tax responsibilities will affect your bottom line.
Tricky tax provisions impact a mobile workforce. If you don’t follow tax rules, you could face fines and penalties, and your business could be left with no legal recourse.
Keep the following facts in mind:
- When you move to a new state and direct your business from there (or hire a mobile worker in another state), you create a filing requirement in that new state.
- Each state is different and has various types of taxes to consider, such as use, sales, income-based, capital-based, gross receipt and municipal.
- Usually you need to register with a state for authority to do business there if you or an employee lives or works in the state.
- Determine where you will file payroll. We often see clients who source payroll to Ohio with employees who live and work out of state.
- “Special” rules are the norm, not the exception. Ohio has a rule that even if you work exclusively from another state, you have to pay Ohio tax on a portion of your wage if you own a certain percentage of your business.
Want to run your business remotely? Weigh your options carefully, get the right advisors and consider the three T’s. Send us a message to learn more.
By Lesley Mast, CPA, MAcc-Taxation (Wooster office); Joe Popp, JD, LLM (Dublin office)
This article is part of our “Small Business Corner” article series, which is designed to address challenges and considerations regularly faced by owners of small- to mid-sized businesses. Check out past Small Business Corner articles at www.reacpa.com/small-business-corner.
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This article was originally published in the Summer 2018 edition of The Rea Report, Rea’s quarterly print newsletter. To start receiving your copy, click here and sign up today.