It is really a guessing game to predict when we’ll all be able to return to some sort of pre-pandemic normalcy, so it’s important to find the positives in our current situation. We’ve all heard it, right? When life gives you lemons, you need to turn it into lemonade and something positive.
Sometimes, however, it’s hard to find the ingredients for whipping up that lemonade!
Phil and I have tried really hard to stay positive at home and at work. We’ve found a few core ingredients to help us stay focused on keeping our family and business moving in the right direction.
Here are three ways to make the most of the current situation for you and your small business.
1. Discover a New Audience
Consumer needs and desires are not the same as they were before the pandemic hit. If you’ve been paying attention, you can quickly pivot to consumers’ current needs and desires. This could lead to you discovering a new target market for your business.
Do your analysis and market research to see what areas of your business are still resonating with current customers and also check for new activity from customers you’ve never interacted with before. Experiment with segregated email campaigns and see what people are talking about on social media.
Once you have a better understanding of what new audiences you can reach, brainstorm with your team on providing new products and services.
2. Learn New Skills
Your business may be slower than usual, but that doesn’t mean you and your team can’t use the time to your business’s benefit. Webinars and online courses have soared in popularity due to safer-at-home orders. Have employees sign up to learn new skills such as web design, search engine optimization, email marketing, or sales strategies.
Don’t let your team have all the fun. Use the time to enhance your own skills or learn something entirely new.
3. Hiring and Working Remotely
One thing that will not be changing post COVID-19 is how the business world has embraced remote working. The good news for employers is this created a huge expansion in the talent pool you can hire from. If you had limited job applicants before, you will probably find a large amount of new talent waiting for you in your new virtual office. Remote workers can live anywhere in the world and still be a productive member of the team. Without doubt, this new talent base will be a major benefit delivered by COVID.
The challenge for employers is navigating the laws regarding hiring employees living in different states.
Employees living in a different state than where their employer’s business is located cause their employers to have nexus—a physical connection—in that state. Other physical connections deemed to cause nexus are:
- The business has a physical presence, such as office space, a warehouse or a retail store in a state
- An employee of the business conducting in-person meetings with clients or customers in the state
- Any activity from a business structured as a limited liability company (LLC), corporation, or limited partnership (LP).
LLCs and corporations are deemed “domestic” only in their state of formation. Therefore, both legal structures are required to Foreign Qualify in any other state they conduct business in. Foreign qualification ensures the public has transparency about the out-of-state business.
If your business plans to restructure as an LLC or corporation, it’s important to contact the Secretary of State office in the states you conduct business. Every state has its own form, so the details required will be slightly different depending on where you wish to file as a foreign LLC or corporation.
Because employees are working in a different state, the business must also register with the State’s Department of Labor and the state’s tax board to pay the payroll taxes for that employee. As the employer, you must acquire a state income tax withholding number, get an unemployment insurance number, and withhold income taxes. The business is also expected to follow the state’s regulations for minimum wage, labor laws, state disability insurance, and worker’s compensation.
Failure to follow payroll laws or to register for foreign qualification can result in significant penalties.
Although a business does not need to foreign qualify if its workers are independent contractors, California’s AB5 law has changed the way the state classifies what constitutes an independent contractor. Make sure you understand the difference before you fail to foreign qualify your business. Other states are also changing classification rules and may require a business to pay the appropriate payroll taxes.
Some states do not have a state income tax (Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming). In those states, the business and the employees are still required to pay federal income tax.
Because the number of remote workers in other states has increased since the pandemic began, some states are offering employees temporary relief from having to claim nexus in other states—especially if the worker is only temporarily working from that state. Learn more about operating virtual offices and the business compliance impact of nexus.
CorpNet is Here to Help!
Finding it hard to keep up with all laws and regulations in each state? That’s what CorpNet™ is here for! CorpNet is here to help save you time and money!