What is the most fun part of running your business? Is it creating a new product line, establishing a new service, or acquiring more customers?
Is it calling on customers to pen a testimonial, collecting your income for the month and seeing your sales record on the increase?
All of these things are fun in a way. They all symbolize hard work and dedication, time well-spent, and a job well-done.
The Necessary Evils of Business
But when it comes to taxes, copyright, and liability, we don’t get too excited. In fact, we may even yawn. These are necessary evils that are required to run a business properly. But they are not things that we revel in that keep us wanting to jump out of bed every morning to start the day.
However, if we don’t do these things well and do them right, they may be things we will spend much more time than we want to on, perhaps in the company of our tax attorney.
So doing taxes, handling copyright issues, and dealing with liability are important, to say the least.
How does the busy entrepreneur take the time to deal with three of the most important aspects of their business and still have a chance to do the fun, creative stuff?
Let’s look at each area in isolation first and then examine what we can do to make sure it gets done and done correctly.
Taxes: A Sure Thing
One thing is for sure; there is nothing more certain than taxes (and death). But while we are still alive, we have to pay our taxes. One of the most difficult situations that business owners can find themselves in is a situation where they have failed to pay proper taxes at the end of the year. Another problem is a failure to file.
An inability to pay the right amount of tax can happen to anyone. These things can happen due to a mathematical error, miscalculations in your estimated income or just plain bad math. But, despite what the reason may be, it is your responsibility to pay your due income tax, no matter what your situation is.
Planning Ahead
Many businesses solve this problem by putting some money aside each month to cover their fees ahead of time. This is considered a wise business move because it avoids you having to scrape up the money to pay your taxes at the end of the year in one lump sum.
Tax problems can start small and escalate over time, causing a business owner to be overcome in tax debt and creating a financial snowball that is hard to stop. So it’s best to learn all you can about the tax process, find the loopholes and deductions that you may qualify for, file early, and save much.
Copyright Issues
When it comes to copyright, even one infringement is too many. The price of a conviction of one copyright infringement that you or anyone in your company does on behalf of your company can cost you up to $250,000 in federal court. Copyright infringement also crosses over into criminal court and people may even face jail time for knowingly infringing on someone else’s intellectual property.
Copyright laws continue to evolve and change over the years as more digital media is available and more artists, writers, and content creators join the digital revolution. But you should always consult with a copyright attorney and keep up with the latest rulings regarding copyright law and double check all media to make sure you also have your copyright notice on your media or intellectual materials that you put out to the world.
Current Copyright Legislation
The copyright laws are prone to change as new technological developments and standards emerge but you can find all of the latest laws at the Copyright site.
Some good news regarding the use of files for mobile devices
One of the changes in the copyright laws involves the fact that users are allowed to download and “burn” CD files so long as you still own the original CD disc. The FCC rules in a recent ruling that ripping CD files as mp3s is no longer illegal to use in mobile devices but you must keep the original CD, LP, or 45 or other sound recording to make the copied files legal.
If you sell your original CD or get rid of the source files, the ripped files become illegal and are not in compliance.
Regarding protecting yourself as a content creator, the common law copyright states that copyright is created the minute you create a work in any tangible form. This includes any intellectual work such as:
- Books or eBooks in any form
- White papers or documents
- Scripts or screenplays
- Lyrics of songs
This is not an extensive list, but it gives you an idea of the kinds of works that are considered intellectual property. Any and all of these are copyrightable, and you own the copyright the moment you finish putting the creation in a tangible form.
Common Law Copyrights
It should be noted that you do not have to place the copyright emblem (©) in front of the date with your name as was true in times past, but it is strongly advisable. This notifies the viewer of your work that the work is copyrighted and protected by law.
Understand though that, if you do not go through the formal registration process of registering your work with the Office of Copyrights, you will not be able to pursue federal or state charges against a defendant for infringement on your intellectually copyright works.
In other words, your copyright stands once you create a work. But to seek legal compensation for infringement, you must formally register it before publication.
Alternately, if you publish your works online, this leaves a digital footprint and may leave sufficient evidence to prove your case in any situation where someone claims that they created the work before you did. Keep all digital files on a sky drive such as Google Drive as a precaution if you unpublish the work.
Liability
When it comes to liability, you need to have an attorney who can help you with any legal issues. This includes signing or distributing contracts, creating new work orders, filing invoices, and other matters. You never know when someone may try to sue you so the more you can draw up contracts regarding your policies and have a solid legal basis in place, the better off you’ll be.
Analyzing Your Level of Risk
Think about the type of business you are in and the level of risk regarding liability. Some business models are relatively small while others are higher. Consider getting “errors and omissions insurance” or some other kind of insurance to have something in place to protect you if you are sued by a client or B2B partner.
Following solid ethical practices and letting others know you have these plans in place within your policies may discourage others from taking legal action against you.
When it comes to business, you have to remember that your business is an investment. It is an investment of your time, your money, and your heart and soul. You need to protect this investment by always thinking ahead, taking care of the important things like taxes, copyright, and liability issues, and having a plan for every contingency.