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tech startup hiring roles

4 Positions Your Tech Startup Needs to Fill

By | Startup | No Comments

90% of new businesses end up failing, and tech startups are more prone to this due to the newness of the ideas they usually bring to market. Hiring the right team to guide your tech startup from its infancy through its growth stage is one of the universally recommended ways to guide your company to success. 

According to a survey by CBInsights, 23% of small businesses fail because of not hiring the right management team. The company’s first managers have a very important role in the firm as they set the organizational and departmental policies and culture, which is often difficult to change as the company ages.

Here are 4 other crucial roles that you should consider filing for your tech start-up.

1. Chief Executive Officer (The Visionary)

This the leader of the team, whose goal should guide the team members. The position involves setting up the long-term organizational vision, then coming up with strategies to meet them.

A CEO is responsible for the building, development, and motivation of the senior executive team and is usually heavily involved in their hiring. A solid, cohesive team will lead the company to success, while a bad mix or composition of the executive results in business failure.

Start-ups and small companies are often unable to hire specialists and consultants, and the CEO should be able to step in and help solve this problem.

Other important roles for the team leader in a growing tech firm include:

  • Creating the organization’s culture
  • Dealing with other third parties, including suppliers and the government.
  • Making all the important decisions, including operational, marketing, and managerial.

2. Chief Sales Officer (The Hustler)

No matter how useful a product is, your business will not succeed without a strategy to generate leads and acquire new customers. This position is even more crucial in the highly competitive and dynamic tech industry.

The chief sales officer is responsible for coming up with and implementing customer acquisition programs and formulating strategies to keep clients. They ensure that the tech company’s product brings in enough revenue and profits to sustain its growth.

3. Chief Financial Officer

The CFO is responsible for the Finance and Accounting departments. This entails acquiring funds for the growth process and ensuring they are used appropriately. Money-related decisions all the way from budgeting to bookkeeping also fall under their jurisdiction.

A competent CFO ensures that there are strategies to acquire more funds if needed. They also usually accompany the CEO to meetings with current and potential investors to discuss the company’s financial health and expectations.

4. Chief Technology Officer (The Doer)

A CTO fulfills various roles for a growing tech company, including developing a customer-focused product and leading the coding and engineering teams. The position requires an officer that is competent both in the technological and business aspects of the company.

They are usually the first hires for tech start-ups as they play a big part in actualizing the product. CTOs are also responsible for managing all aspects of the project during the development stage. This is why you need to hire an officer that has management skills in addition to the coding and marketing skills required for the job.

Does Your Growing Tech Company Have These Employees?

Hiring the right employees for the important roles highlighted above can make or break your company. Your firm’s growth is highly dependent on competent leadership and the above hires will increase your survival rate.  

Now that you have assembled a great team, you only need tax professionals to help develop a working tax credit strategy to ensure your tech company is taking advantage of all the tax credits available to it. Contact us today for a free consultation. 

tech research

3 Ways to Fund Your Tech Company’s Research Activities

By | Innovation | No Comments

Research plays a vital role in the evolution and success of tech companies because it promotes sustainability. As such, your tech company’s research can give it a competitive edge in the market by helping you develop plans that spearhead innovations. That implies that creating solutions for future problems that you can predict becomes a possibility through research.

So, if you want to speed up the growth and evolution of your tech company by introducing innovations and breakthrough products in the market, investing in research activities for your tech firm is critical. It is a fact that tech entities grapple with the highest expenses for research, and the cost can amount to billions of dollars for large organizations.

On the other hand, research expenses can be minimal for small tech businesses, yet they are still vital for the success of such establishments. The competitive nature of the tech marketplace is one of the reasons why it is difficult for individuals to finance research initiatives. Here are some of the funding options you can consider for your tech company’s research activities.

Approach Angel Investors

One of the reasons why you should consider seeking funding for your tech firm’s research initiative from angel investors is that these individuals have a high net worth, and their annual income is also huge. Most angel investors are open to new ideas. They typically operate alone, but may also join with others to form a fund.

Before approaching an angel investor, you must put together a solid business plan and a great pitch. Capturing the attention of an angel investor with enthusiasm and promising data points about the current situation and future potential of your tech business is what will help you secure the funds you need for your research activities.

Angel investors fund your company in exchange for a return on investment. You also need to ensure that your finances are in order and that your management team is competent. The reason is that these are some of the factors which determine whether an angel investor will invest in your tech operations or not.

Additionally, the personality of the angel investor you choose should be in sync with yours. That way, the two of you will get along for the benefit of the initiative you need to finance. Giving an angel investor as much information as possible allows them to make an informed decision regarding investing in your research operations.

Consider Crowdfunding

Online crowdfunding sites help individuals finance inventions, businesses, and projects. They make this possible by bringing various people together who are ready to cooperate and support organizations or entrepreneurs to attain a particular goal. In that case, you need to research such sites to understand the projects they finance.

When seeking funds from crowdfunding websites to finance your research, you need to consider publicizing your initiative to friends and family. The support you get from such persons can spur other people to contribute to your cause. You also need to assess traffic, payment methods, social networking provisions, and fees before opting for a particular crowdfunding site.

Seek Assistance from The Government

The federal government can step in and fund your tech company’s research initiative depending on the nature of your invention. For example, if your research project focuses on a positive impact on the environment or saving energy, you can approach the Department of Energy for funding. Remember to research the requirements of the program you are pursuing to gain insight into the guidelines that government agencies have put in place.

Accessing federal funding for your tech company’s research activities implies that you will be in a position to compete favorably with large firms.

Winning the confidence of the investors or the agency you are seeking funding from is paramount if you do not want your project to stall. If you need more information on ways to fund your tech company’s research activities, contact us today.

tax credits technology company

3 Key Tax Credit Tips for Tech Companies

By | Credit, Tax Credits | No Comments

Running a business is inseparable from paying taxes. As a tech entrepreneur, you must be aware of your tax obligations starting from City Hall up to the federal government.

To keep your taxes under control, you should understand which taxes your firm must pay, the amount of outstanding taxes, and the when to file.

A small mistake can lead to your tax bills go through the roof. But by planning well, taking advantage of available tax deductions, and preparing your tax returns diligently, you can significantly save on the amount of owed taxes. This is where tax credits come in.

A business tax credit is a particular tax incentive that reduces the amount of taxes a business owes the government.  Business tax credits are available to companies when filing their annual tax returns with the International Revenue Service.

Benefits of Business Tax Credits to Tech Companies

To understand the benefits of tax credits to tech companies, we should break down business tax credits further. Business tax credits occur in varied forms. Available business tax credits include research and experimentation, investment, welfare-to-work, and work opportunity, just to mention a few.

Businesses must claim these tax credits by filing the specific forms for that tax credit on the IRS Website. Alternatively, you can seek the help of a licensed tax professional or an accountant. Keep in mind that the applicable tax credit forms and the available credits change yearly. So, before you file your tax returns, you should consult with the IRS website.

The main advantage of business tax credits is that they reduce your tax obligations. Preferably, you should try using all the tax credits you qualify for to reduce the amount of taxes you will incur during tax time.

What is more, if your business exceeds its tax credits for the prevailing tax year, you can apply them to the already filed tax returns. Better still, if you have excess tax credits in the present tax year, you can carry them forward to the subsequent tax year.

To make the most out of your tech company’s business tax credits, do the following:

Understand Your Tax Responsibilities

As an entrepreneur, you should be cognizant of all the local, state, and federal income taxes you might incur.

Your chosen business entity and the number of employees inform your tax obligations. Also, you might incur other local and state taxes depending on your local or state taxing authority.

Identifying all your potential taxes your business will incur will help you plan adequately and increase your business’ bottom line.

Know When to Involve an Accountant

Setting up a general business ledger is among the crucial things to do when launching a tech startup. Despite your activity level, involve an experienced bookkeeper to maintain your accounting records properly.

Accurate accounting records will come in handy when you are filing your annual taxes or seeking outside funding.

In the case of higher-level business activity, consider hiring a full-time internal accountant.

Understand the Available Business Tax Credits

There are a plethora of tax credits available to tech companies. The most popular tax credit is the research and development tax credit. You can use this credit to settle federal payroll taxes. Furthermore, it can be converted into cash in various states.

Understand how you can use these credits to your advantage to reduce your tax responsibilities.  

Given the uncertain business future, an overwhelming amount of taxes can sink your business. By taking advantage of available business tax credits, you’ll be better able to your tech business afloat.

Do you need help in filing your taxes? Contact us today to help you determine the available tax credits you qualify for. We will also advise you on how to cut your tax obligations for the benefit of your tech company. 

technology company tax structure

3 Tips for Structuring Your New Technology Company

By | Startup | No Comments

“I wish I did that at the start.” It’s common to hear tech entrepreneurs uttering these words. They say this upon realizing that it’s difficult to either scale or downsize because they didn’t structure their businesses appropriately. In today’s corporate world, many new technology companies fade into oblivion as soon as they encounter their first tax or legal challenge. Those that manage to overcome these challenges face more significant challenges that even threaten their existence.

These challenges shouldn’t make your technology company a “lemonade stand.” Instead, you should use them to create a legacy of success and a long-lasting legacy. Restructuring your new technology company is the easiest way of countering most of the challenges that you will encounter. Here are three tips for restructuring your new technology company.

1. Establish a Family Trust

It’s common to see tech entrepreneurs holding their companies’ shares personally. As convenient as it is, this doesn’t allow you to split your income for taxation purposes. Likewise, it doesn’t protect your interest in the startup from any personal risk. Establishing a family trust acts as insurance for asset protection.

Often, tax returns and accounts for family trusts are only required when the trusts are receiving income by the sale of shares upon exit or via company dividends. Besides, establishing a family trust when you set up a tech company negates the need to face significant capital gains tax hurdles. Typically, such tax hurdles arise later on when you decide to move the company’s shares into a family trust.

2. Establish an Income Tax Partnership

When there are more than two businesses in a corporate group, tax consolidation is easy. The benefits of forming an income tax consolidation group with your subsidiaries or other companies include:

  • Intercompany transactions (including management and licensing fees) will be overlooked for tax purposes, thus lessening your tax burden
  • Tax obligations won’t arise when assets get transferred between the companies
  • The tax losses of one company will be offset against the profits of the other companies
  • The R&D tax incentive will be accessed at the group level. Therefore, it’s highly unlikely that eligible R&D tax expenditure will be missed.

The sooner you establish a tax consolidation group, the better. You’ll be able to access the aforementioned tax benefits as soon as possible, besides enjoying other numerous benefits of tax consolidation.

3. Set Up a Solo 401(k) for Your Company

A self-directed 401(k) is a unique retirement savings account that is only available to up and coming businesses. If you own or run a tech startup, you should take advantage of this account since it allows you to sock away up to $50,000 every year while qualifying for significant tax deductions.

Tax savings shouldn’t be your sole reason for setting up a solo 401(k) for your technology company. From a legal perspective, the money channeled to this account is secure since no one can touch it, including the IRS, bankruptcy, and those who may file lawsuits against your company.

What Are the Risks of Organizational Restructuring?

To effectively restructure your tech company and set it on the path of sustainable growth and profit, there are certain pitfalls that you should be aware of. These include:

  • Getting lost in the process
  • Establishing objectives and goals that don’t align with your company’s inherent goals
  • Confusion over team members’ roles after restructuring
  • Overcoming new tax hurdles that might emerge.

You can avoid these challenges by outsourcing the services of tax professionals at Incentax when restructuring your tech company. We use innovative data gathering tools to ensure that you get lucrative tax advantages as you restructure. If you are interested in maximizing your tax savings, contact us today.