Part Two: Planning, Regulations & Taxes

Last week, we discussed the main challenges that small businesses face in terms of cash flow and leads. We reviewed each and presented solutions to help you deal with an unsteady income, lack of clients, lack of diversity in your clientele, keeping your passion for the job, and finding new employees. Today, we will look at problems related to planning, regulations, and taxes.

#6 Health Care


The health of your employees is vitally important, and there is no second opinion about that. However, healthcare costs seem to continue to rise, and that makes things difficult for business owners. “Obamacare” does have its benefits, but you will certainly agree it is the business owner that receives the financial blow in the end. 

On average, small business owners pay around $6,480 per employee for single coverage premiums and another $13,000 for administrative costs per year. 

So, what can you do?


  • Compare plans online. There are websites that allow you to compare different health insurance plans and help you find the most suitable one for you. You can set a budget, customize your search with your employee information, check what insurance plans similar businesses have chosen, and more.
  • Understand the different plans for solopreneurs and multi-person businesses, as well as the available tax deductions and credits. More details here.
  • Discuss it with your accountant and/or business consultant.
  • Ask your industry colleagues for advice. It’s free!

#7 The State of the Economy

A: Knock-knock.

B: Who’s here?

A: Your father, the Economy.


The economy is like that parent who gave your business life, but also restricts and punishes it. The sad reality is that not even Wall Street experts can predict what will happen and what won’t. Will there be a recession? Is automation going to replace humans in business? Is the bank going to approve your loan? In the uncertain economic times we live in, those are the questions that keep circling around.

  • After the Great Recession of 2009, banks almost stopped giving out loans to small businesses. This means you need to stabilize your cash flow. It also means saving up for a rainy day. You never know when business will slow down for reasons beyond your control, so you need to be prepared.
  • Differentiate your product/service to cover as many needs as possible.
  • Keep track of innovations in your industry to know where things are going in terms of best practices, equipment, technology, pricing, etc.
  • Establish a loyal customer base. This can happen through better offers for repeat clients and other bonuses.

#8 Growth vs. Quality


Sometimes you just find the right formula and your business booms beyond your expectations. If you haven’t planned for this to happen, you can find yourself struggling with the increase in customers and workload.  


Scale your business. It sounds easier said than done, BUT, it can be done. When your clients begin to increase, it’s time to sit down, evaluate and plan. Ask yourself:

  • Do I have the people to cover this number of clients?
  • Do I have the technology, equipment, infrastructure, and systems to meet this kind of demand?
  • What other resources do I need to nurture my growth?

Be as specific with your questions and answers as possible. 

Think about any funding you may need (to buy new equipment, hire more people, etc.). At the same time, you need to secure your leads and establish a steady flow of new clients, so you don’t end up tumbling down. If technology can help cut costs like finding more staff, be bold, and use those opportunities. 

#9 Government Regulations


It would seem that the collar around small business owners’ necks gets tighter and tighter each year. New regulations keep surfacing, and many of them apply to all, no matter if you can afford to buy new technology or comply with other restrictions. 

For example, the Clean Air Act of 1990, however well-intended, is a challenge for business owners who don’t have the proper environmental protection know-how and vehicles. 

There are many other regulations like those for faulty advertising. If you have fraudulent or deceiving content in your ads, website, and other advertising materials (both printed and digital), you can easily be penalized. 


Advertise your business the right way.

Get started today


There is no easy way to deal with government regulations, but the best thing you can do is to stay alert. Keep up with the news, follow specialized small business blogs, and join forums to discuss what’s going on. 

#10 Federal Income Taxes


For many business owners, anything containing the word “tax” is a major concern, and federal income taxes are no different. Understanding how much you have to pay and what regulations apply to you can be troublesome.


You need to report all your earnings to the IRS (the Internal Revenue Service agency). But, the way you do it and the amount of your taxes depends on the type of business you run. 

If it is a sole proprietorship, you will have to report your business income and expenses in an attachment, along with your personal income tax return, called Schedule C. In addition to that, you will likely have to fill out Schedule SE (Self-Employment Tax) as well.

If your business is an LLC, the process is similar because these types of limited liability companies are not considered a tax entity by the IRS, and the owner of the company is the one liable for paying the taxes. In the case of multiple-member LLCs, the IRS will tax you as a partnership.

#11 Tax Compliance


Tax compliance is all about following the laws and regulations imposed on businesses, a.k.a., complying with them. However, it is the cost of compliance that burdens most business owners, and not the payment itself. The cost of compliance is essentially the price you have to pay, be it to your staff, or an external company for bookkeeping. 


Know which part of the law applies to you. 

If you make less than $1 million a year, the IRS permits you to use cash accounting. There is also a thing known as Section 179 that allows you to deduct the cost of investments you make to your business, such as equipment. However, there are limits you need to know about.   


It’s not easy being a small business owner in the present day. You’re competing with the big fish, yet you have to follow the same rules as them. You still have to pay for health care and your taxes, but it’s planning and understanding the available options that can make all the difference and save you money.