Instead, it may mean that they treat their business like a hobby without meaning to. This is especially true for small business owners, entrepreneurs, or digital nomads who love what they do.
The major differences between a business and a side hustle are the way they handle processes and operations, accounts and money, equipment like laptops, disputes, mediation including arbitration, and legalities. As a business owner, it’s important to understand how to handle these certain areas.
Business and Equipment
The equipment you use depends on the business you run. For example, if you run a design firm, you’ll require a laptop, and not just any laptop. You’ll need a laptop specifically designed for the profession, with a snappy intel core or AMD Ryzen, a large SSD storage and strong battery life—everything a gaming laptop or desktop has. If you’re a writer, you can get a smaller laptop, like a notebook or Chromebook. The point is to be specific with the equipment you buy, to buy what is needed to carry the job, and to purchase using a business account.
The laptop, desktop, notebook, or other equipment belongs to the business, not you. And there should be rules guiding who uses it and for what purpose. You should also have policies in place that govern maintenance and replacement. Do you get a new laptop computer if it breaks down? Do you get faster processors if the intel core runs slow? Do you expand the memory from 256gb to 512gb if it gets filled? What happens when the intel core gets damaged, do you replace it with an AMD Ryzen or get another laptop entirely? If a person is directly responsible for the breakdown of a laptop, does a new one come out of his pay? Your policy should handle situations like these.
You can visit an online electronic retailer like Newegg for a laptop computer, Chromebook, wi-fi router, intel processor, AMD Ryzen, Bluetooth-enabled devices, or other equipment you may need.
Business and Dispute Arbitration
The way a business handles disputes distinguishes it from hobbies and side hustles. Most businesses handle disputes out of court—called arbitration. They would rather avoid litigation and use an arbitrator. Businesses have a structure when dealing with a dispute. If you operate in the financial industry, then your go-to may be a FINRA arbitrator.
FINRA is the Financial Industry Regulatory Authority, they oversee securities arbitration, arbitration hearings for brokerage firms and others in the securities industry. Finra arbitrators are professionals trained to be efficient at managing disputes. Businesses and brokers operating in the securities industry know who they are. Although FINRA is a government body that oversees arbitrations, you can hire a private securities arbitration attorney from reputable law firms.
The entire arbitration process is a better alternative to litigation or class actions. You should have policies and structures, asides legal provisions, that guide arbitration between you and other parties. Also note that as long as you are a registered broker-dealer rep, FINRA has jurisdiction over you.
Business and Financial Accounts
Business laws differ from person finance laws and are more stringent for brokerage firms and others in the financial market. Whatever field you’re in, provided you’re a business, the law expects you to manage your finances and to have a basic understanding of business laws. You can either take the time to learn or hire a financial advisor. FINRA maintains a database of financial advisors.
You should have a separate account for business expenses and should separate business expenses from personal ones.
Business and The Law
The law keeps a firm hand on businesses and how they operate. Federal and state governments in the U.S. require businesses in some sectors to have permits and licenses before operating. The SEC may not require you to disclose all financial transactions by law, but it still has rules on disclosure.