Most businesses start with just one person, an idea, and a laptop. Most of the hugely successful companies like Facebook and YouTube were once a “Start-up”. Now these have tens of thousands of employees all over the world.
Over time, as your company grows, so do your responsibilities. When you hire your first employee and move your company out of the garage, it’s exciting and scary all at once. Before you know it, your business is now responsible for dozens of several employees, payroll, taxes insurance packages, etc.
In the business world, the classification of a “small employer” and a “large employer” matter, particularly when it comes to health insurance and the IRS.
Those with fewer than 100 full-time employees
Assets of $10 million or less
Eligible to purchase insurance through the Small Business Health Options Program
May be eligible for credits and other benefits to offset the cost of providing coverage.
No business tax, but taxed based on individual income generally equates to an average tax rate of about 20%.
Those with 100 or more full-time employees
Assets greater than $10 million
Must offer essential health coverage
More coverage, reporting, and payment requirements.
Corporate tax rate of 21% (in addition to payroll taxes, unemployment, workers compensation, capital gains, dividends, etc.)
Creating a Scalable Business
A scalable business is one that is ready for the changes that come when you make the leap from a small business to a large one. To start playing in the big leagues, it’s important to start preparing early.
So how do you make sure your company is scalable and ready for a successful future? The key is to allow for expansion and grow revenue without growing your operational costs too much. Of course, your costs will increase some, but they should only grow marginally in comparison to your revenue. Not sure how to make that happen? We’ve got a few ideas to get your started.
Invest in foundational systems. Put your time and energy in foundational systems that will allow your small business to grow into a much larger entity.
Be Proactive. Anticipate demand, don’t wait for it to happen.
De-emphasize the individual. The company must be able to grow independently of any one individuals input.
Automate as much as possible.
Outsource any non-essentials like a lawyer, CPA, designers, and even janitors.
Hire only the right people. Valuable people are essential to helping you scale, hiring your friends who need a job are not.
Start slow. Growing too much before you’re ready is a sure step to becoming overwhelmed and making mistakes. Don’t be so consumed with early revenue that you sabotage yourself.
Today, almost 90 percent of businesses in the United States have less than 20 employees and are run by small teams of effective people. Who knows where the next big business will start from, maybe it’s yours! Build your own success by starting out right, preparing for the future, and being willing to take a risk to build a scalable business of your own.