Protect Your Assets – How to Make Sure Your Business Doesn’t Break Your Bank

Whether you own a brand new business or have owned the same brick and mortar store for years, saving money likely occupies the front of your mind on a daily basis. With the ups and downs that small businesses experience every year, having sufficient funds to cover payroll, rent and inventory during a downturn is very important.
 
In extreme cases when something does occur and you don’t have enough funds to cover your losses, you must have some plan to protect your assets. Here are some tips to help you stay out of trouble, regardless of what happens to your business:

Form a Corporation

A corporation is formed in accordance with each individual state’s laws. This type of business entity is very popular among many types of businesses because the shareholders and their personal assets are protected from personal liability should the business be held accountable in court.
 
This is one of the easiest ways to protect your assets as a business owner. There are minimal costs associated with forming a corporation, but you will have to file additional paperwork with the IRS when you file taxes.
 
 

Separate Your Finances

Mixing finances by using one bank account for both your personal and business finances is a recipe for disaster and should be shied away from at all costs. Using one bank account for both your personal and business finances can put you in danger, especially if someone sues your business.
The courts will see that you use one bank account and the same credit cards for both you and your business, and will go after your personal assets. Opening a business bank account should immediately follow the incorporation process.
 

Business Insurance

Business insurance is mainly used as a risk management tool by business owners. By transferring much of the liability of loss from the business to the insurance company, owners won’t have to deal with the stress of possibly losing their money in extreme liability cases and can concentrate on their business.
 
There are a number of different types of business insurance policies, including property, legal liability, worker’s compensation and more. Finding out what is right for your business may require the help of a professional from Thomson Schindle Green Insurance & Financial Services Ltd to intervene. The advantage to the business is that can be enjoyed by adding financial protection for a relatively small premium payment is incalculable.
 
Consult with a legal professional to see what form of corporation is best for your business. Generally, smaller businesses choose to form legal liability corporations because they still enjoy personal protection from financial losses while paying only personal income tax on their profits. Most business owners choose to purchase business insurance in conjunction with forming a corporation to enjoy maximum protection.