(Aug. 24, 2021) — One might think that you don’t need to keep up with the latest news in politics once you become an entrepreneur. In reality, politics can have a direct impact on how you manage the business. Read on.
There is no easy way to run a business. Numerous factors can influence your success. These can include the market, consumer needs, and expectations, along with how you market your brand and the efforts of other similar brands in the market. But if there is one thing many aspiring entrepreneurs fail to consider, it is politics.
You may know very well that there are laws and regulations you need to abide by even before you start your business. There’s the need to get the necessary permits and licenses to operate. This goes beyond the taxes you will have to pay once operations start.
This is one reason business owners are advised to hire a local and reliable business lawyer. With all the legalities involved in starting and running a business, it helps to have a legal professional guiding you every step of the way. In case of legal troubles, you already have someone you can rely on.
A myriad of political factors can affect your business. Some political factors help businesses thrive during their most challenging days. Others are there to guide you on how to run the business better.
The government decides whether to increase or decrease business taxes. Some companies are lucky enough to be included in the list of those that have to pay lowered taxes, depending on their nature of operations. Failure to comply with your business tax obligations can lead to several consequences.
For one, the Internal Revenue Service (IRS) can shut your business down. While this rarely happens, it can still be a possibility. More often than not, businesses are obliged to file past dues and continue paying the taxes owed.
Ever-changing tax obligations can sometimes confuse business owners. This is why the best way to remain compliant is to hire a reputable professional to do your taxes. Aside from having the right knowledge, skills, and experience, they are also up to date with the latest happenings in the tax administration landscape.
Aside from your tax obligations, there are tax breaks and incentives every business owner needs to know. During the pandemic, extensions are made to help businesses during the crisis. The agency moved numerous tax payment deadlines in favor of businesses.
Different business tax incentives exist to make it more affordable for businesses to function. Some states offer more tax incentives as a way of enticing business owners to start their businesses. Leveraging these tax incentives can help you save more money and use the funds for different business endeavors.
Changes in Regulation
Each year, the government alters rules and regulations concerning businesses. Different rules and regulations can either help business operations to be a lot easier or more difficult. But then, business owners have no choice but to comply with the rules to keep the business going.
The government is increasingly becoming more attentive to the compliance of businesses. After a series of highly publicized corporate scandals, the government created the Sarbanes-Oxley Act. They established this law to better protect the public, employees, and shareholders against different fraudulent financial practices and accounting errors.
The Sarbanes-Oxley Act requires public companies to be more transparent about their off-balance sheet arrangements. This means companies need to be more thorough in disclosing their annual audits. Failure to comply can lead to burdensome consequences, including longer prison time for violators.
Such a change in regulation obliges companies to do extensive internal control tests and reports related to their yearly audits. This can be quite time-consuming, considering all the financial reports one has to complete each. This makes running public accounting firms more complicated.
Politics can influence employment laws. Such laws exist to guide employer/employee relationships. These also aim to protect the rights of employees.
Failure to keep yourself updated with the latest employment laws and trends can put your business in great trouble since you can get sued for seemingly innocent cases. If you are not careful, your company’s reputation could be at risk for your lack of compliance with employment rules.
Every company’s HR department should be updated with the latest trends concerning employment laws. The following are 2021’s policy changes you need to be aware of.
- Increased hourly minimum wages in certain states
- New paid leave incentives
- New and expanded training requirements
- Improved workplace safety
- Anti-discrimination compliance
- Improved employment screening
Different political factors can have varying impacts on how businesses operate. This is not limited to the rules you have to impose on your business. This can also change the course of business processes and potentially influence your brand’s ability to make a profit. This shows that even if your business exists as a private organization, you are still part of a bigger community where politics can influence the way you make business decisions.