Business entrepreneurship

Operating a business is generally an enjoyable, albeit stressful, undertaking for the people who start it. They typically have an easy time with setting up most parts of the operation, but there seems to be a frequent disruption when they start needing to deal with payroll.

When a business begins to take off and reaches a size that requires employees beyond just the entrepreneurs themselves, there can be a real hiccup in growth. The need to log hours correctly, calculate withholdings accurately, and get payments made on time creates a new stress on the managers, and it can leave them struggling to navigate through the process.

It’s at this stage that many entrepreneurs realize that it’s time to get expert help. And because most firms of this size aren’t able to open a full accounting department, many are taking on MasterTax tax compliance software as a tool to overcome the complexities of getting an employee’s calculations from earnings to the take-home level.

There are several reasons why an automated system like that can keep your company from sinking just as it’s beginning to swim.

Employee Retention

Nothing is quite as unpleasant for a worker as getting a surprise at tax time. When they report their exemptions to you at the onset of their employment, they are counting on you to withhold accordingly and help them meet their goals with the government. For some, they measure precisely and aim for no net cost to the IRS. Others shoot for a big refund. Whichever path they have chosen, they are expecting your company to get things right.

When you don’t, you have a serious problem. You may have people who owe large tax bills and end up being subjected to a wage garnishment. Others may feel you’ve let the government hold part of their wages, interest-free, for an entire calendar year. Either group will be very unhappy, and that’s a hard worker to hold onto.

Government Compliance

Of course, it isn’t just your workers who can run afoul of the government. You are required to make withholding payments, payroll taxes, and possibly occupational tax payments in order to keep yourself in compliance with the law.

When a company fails to meet these ever-changing obligations, the effects can be devastating. Assets can be seized, bank accounts can be frozen, and the company can start down a path that will never allow it to recover.

Using a system that correctly calculates what you need to send and where you need to send it will avoid this devastating spectrum of oversights, keeping you in operation and in the money.

Lower Overhead

These are magic words to most new businesses. As we noted earlier, it’s impossible to take on a full department of experienced payroll workers in the early days of a business, when there are only a few workers actually out there doing production.

By simply using a computerized payroll calculation system to deal with your withholdings and earnings, you are effectively getting that experienced payroll staff at a fraction of the cost. Best of all, your workers get all the benefits of that staff, and ultimately, you get to cash in on long-tenured staff who are as satisfied with their paychecks as they would be at one of your monster competitors. It’s a win-win, low-cost situation.

When all you have to do is calculate cash sales, pay the bills, and keep the profits for yourself, your payroll isn’t too tough. Once you bring other people on board, though, you have an obligation–both morally and legally–to do right by them when it comes time for them to be paid. Failing to do so can destroy your business. But it’s not necessary.

From the first day that you have an employee beyond yourself, keep current on how to withhold and pay your staff properly. It will bring dividends for as long as you operate.

Image: DepositPhotos. © masha tace

Drugged myself w/ Benadryl so as to sleep last night, so this morning am too deep in a fog to move, much less write a coherent sentence. So, if my golden words pass the time in front of your computer, check out this update, Feast or Famine in the Editing Biz.

The editorial business is starting to make up for the money lost in the publishing enterprise.

The Copyeditor’s Desk, surprisingly, is not flat broke yet. I figured that if the many books we’ve published didn’t sell, the bank balance would reach $0.00 along about March 31. That hasn’t happened (mirabilis!), though it’s at about half of where it was when I decided to take a cruise down the Amazon.

It was a calculated risk. Really, I’m surprised I’m not flat broke. Last month Amazon sold one (1) of our amazing books. We sell more when I advertise the erotica at a website frequented by people who like erotic romance, but not enough to cover the cost of the ads. Fire-Rider has 5-star ratings but no one has bought it in months. The cookbook has sold one (1) copy on Amazon since it came out.

Meanwhile, though… The Copyeditor’s Desk has billed $1047 in the past ten days. It has another $2200 pending from academic institutions, traditionally slow to pay, for a total of $3247 earned over the past month.

About $2,800 worth of work is in house, in the “unhatched eggs” category.

Since I only need to draw down about $1320 a month ($1100 + $220 in taxes) to replace my piddling teaching income, this is good news.

Last night I calculated what I would need to pay myself a salary and cover all the business’s overhead, not counting occasional computer purchases. It looks like this:

So, about $1600 a month to cover ordinary expenses. That comes to about $19,390 a year, total gross income needed to pay me and cover overhead.

If I could earn that much, I could keep the wolf from the door. Not exactly a living wage, is it?

If I made $3200 a month consistently, the result would be $38,400 a year. Then I could afford a cell phone! 🙂 Wouldn’t that be nice?

The truth is, I don’t especially want to make that much. The amount of work I’ve done over the past few weeks has been pretty crushing: starting around 5:30 or 6 in the morning and working through, most days, until 8:30 or 9:30 at night. I’m not getting any exercise; I’m lucky if I get the dogs out for a walk every other day; and I’m wearing off my nose at the grindstone. I’d rather have a life than $38,000 a year.

But I sure as heck could do with enough to replace the piddly adjunct teaching.

The ducks are visiting again this morning. They come and go, DuckDuck and her Drake. They don’t seem to be interested in nesting here — they spend most of their time elsewhere. So I doubt if we’ll be seeing ducklings anytime in the near future. But it’s nice to have them drop by and paddle around the pool now and again.

The drake is a spectacular thing. He’s exceptionally handsome even for a mallard, his feathers in prime shape and he obviously at the height of his life. When he spreads his wings and takes off, he makes an astonishing flash of color and motion. DuckDuck is also quite charming, given to standing on the coping and stretching one leg at a time, causing her wing to lift so the long striped feathers and with their bright teal patch fan out… uh oh…she’s over at the old nest and peering in there. Hmmm…..  Is it only that she wishes to eat the cat’s claw leaves, or does she have designs on the old homestead?

Whenever I get back from choir, I’ve gotta do some bookkeeping and pay the S-corp’s AMEX bill. Ugh. Racked up over $900, mostly on consultancy fees.

And truth to tell, the book enterprise isn’t making any money, mostly because I don’t like working with social media, because I can’t even get into Goodreads, and because I have just enough editorial work that it takes time way from the publishing scheme that should be used on marketing. I think I’m probably going to focus on the cookbook and let the others moulder on the Internet. I will take shop versions of the cookbook and Fire-Rider around to local bookstores, but that’s about it. I tire of this enterprise, especially since I can earn as much as I made teaching with editorial work that occupies about a third of my time.

Yesterday at our merry writers’ group, one of the members asked me if I’m interested in ghost-writing. Topic: how to write computer games.

Well…zzzzzzzzzzzz….. Maybe. If the person is willing to pay the going rate for a ghost-written book — about 20 grand — sure. But frankly, most people outside publishing and politics faint dead away when they hear that price. They wouldn’t pay half that  much, and believe me…you do a lot more than $10,000 worth of work when you write an entire book for someone.

Math Magic, which I wrote for Scott Flansburg and for which I did get $20,000, had a one-year deadline. That’s less than $1,667 a month, gross, for full-time work: exactly the amount of one of my net paychecks at the Great Desert University, after taxes and the state’s generous benefits were extracted. Half-time pay for full-time work. That book was done in six months, mostly because as soon as SDXB left town for a stint in the reserves, I spent 14 to 16 hours a day on it.

Oh well. Nothing ventured: I’ll probably look into it, but not hold my breath until the check clears the bank…

But frankly, I suspect that if I put as much time and money into marketing the editorial business as I’ve done for the publishing scheme, I’d  hustle up more than enough work to meet the target I’d like to earn. And NOT have to work 14 hours a day at it…