Starting your own business may be one of the most nerve-wracking yet rewarding experiences. You want to make sure everything is organized, from business planning to the implementation.
However, newbie entrepreneurs tend to neglect some seemingly trivial yet crucial aspects of entrepreneurship. Case in point, these penalties may be avoided by employing simple solutions.
1. Data Breach
Did you know that if your clients’ sensitive information is compromised, you might be penalized? To avoid this, make sure you have all the necessary data security features installed. Unused sensitive information should go through proper data destruction. Boston houses several companies that offer data destruction and data sanitation services.
Data destruction is the process of destroying information on electronic media until it becomes unreadable and inaccessible while data sanitation uses any of these methods: physical destruction, data erasure, and cryptographic erasure.
Why is any of these necessary?
In 2018, more than 600 data breaches were recorded in the U.S., exposing approximately 22 million records. Yes, it’s not only Facebook. Shops such as Saks Fifth Avenue fell victim to this scheme, compromising 5 million stolen credit and debit card information.
What happens if your business is proven to violate data security?
Not all violations lead to penalties. But if it does, administrative fines may be up to 4% of annual global turnover or €20 million, whichever is greater. Hefty, isn’t it? Aside from the fines, there is, of course, the risk of losing your clients’ trust is there. This may force them to look for an alternative, posing a significant threat to your revenue.
2. Tax Violations
One of the most common questions startup owners ask is “Should I hire an accountant? Or can I crunch numbers by myself?” You can definitely crunch your own numbers, but if you want to avoid tax violation penalties, you should seek professional help.
Why? Because as the owner, you’d probably be busy running your business, ensuring everything is going as planned that you may forget to bookkeep your daily transactions. By the time you remember it, the tax filing deadline is just around the corner. Not only that, you could be reporting the wrong numbers, which may also result in penalties.
How much are the penalties?
Late filing can be from 5% to 25% of your unpaid taxes plus another 0.5% to 25% for late payment. If the data are incorrect, you will be fined an additional 20% of the amount owed. It’s ideal to hire an accountant to avoid getting penalized.
3. OSHA Violations
When we hear OSHA (Occupational Safety and Health Administration), we usually think construction or manufacturing business. But did you know that ensuring a safe working environment for your employees is a must for all brick-and-mortar businesses? A safe working environment includes potable water, non-hazardous indoor air quality, and a bug and rodent-free workplace.
OSHA penalties range from $13,260 (or per day if it’s a failure to abate) up to $132,598 per violation.
To avoid paying this huge amount, start with the free on-site consultation offered by the U.S. Department of Labor. They will discuss everything you need and the health and safety risks if there is any.