Startup Ops Tip #1 | Sales tax, don’t wait until it’s too late.

The cost of doing business includes sales taxes. It’s not the most exciting part of startups & small businesses, but it’s crucial. Most SaaS products & tangible goods will be taxed on the state level. Research each state’s sales tax requirements and consult your accountant early on. Here’s a quick breakdown:

• Nexus: Simply means the point at which you’re required to collect sales tax in a state. You’ll hit this point when you pass a monetary sales threshold or you are physically in said state.
• Getting Registered: If you have nexus in a state, you’ll need to register for a sales tax permit (usually with the Department of Revenue) with each state you do business in.
• Remittance Schedule: Filing and paying sales tax can be monthly or quarterly, depending on your state. Filing, while not complicated, can take time, especially in multiple states – so keep your bookkeeping & invoicing up-to-date. Missing a deadline can come with steep interest & penalties.

It can get complex for e-commerce businesses selling nationwide. Setting up a spreadsheet to track registrations & filing due dates is fine for the first few states. But make sure to check in on the amount of time you are spending each month on sales tax. Outsourcing to an online sales tax service can look expensive but saving yourself a few more hours a month can be worth not having to think about it.

– M

---

Life Tip #1 | Savings – How much should I save / have in a rainy day fund?

Everyone needs savings, even though it can be a hard to achieve. Unexpected job losses, health issues, or a move are all reasons where extra savings will relieve financial stress. As someone who is more risk adverse, I like to prepare for the absolute worst. My goal is to save 10% of my monthly income and have 12 months of living expenses in savings (liquid / easily accessed).

Calculating your monthly living expenses is easy — just add up everything you are spending money on now. A good way to calculate your monthly expenses is to review your monthly credit / debit cards and add everything up + anything that is not paid through those accounts. Granted, your spending habits might change if you have less money coming in or a large bill to pay, but as mentioned before, I always like to be as conservative as possible. Examples of monthly expenses include:

• Rent/Mortgage
• Utilities
• Communications
• Insurance
• Food
• Toiletries
• Household items
• Transportation
• Clothes
• Entertainment
• Debt

If 12 months of savings + saving 10% of your income seems difficult, start smaller. A positive position to be in is to have 3-4 months of savings and saving anything you can every month. There are numerous money savings apps one can use, but it can be as easy as transferring 10% of your monthly income to a savings account and not touching it.

– D