Building a successful business is more or less a balancing act. Here are some things to keep in mind for a successful startup.
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Based in California, Rivian is an American automotive manufacturer that specializes in electric vehicles. Originally founded back in 2009, the company now has manufacturing plants in Illinois, Michigan, California, Vancouver, and England. Designing cars intended for both on and off-road driving, the organization currently employs more than 7,000 people as of 2021. You may have heard about Rivian recently because they just rolled off their first production electric truck. That in and of itself is notable — but the success it has already enjoyed is equally so. Experts from Motor Trend have dubbed it “one of the most remarkable vehicles” they had ever test drove. All told, it’s the product of ten years of hard work finally coming to fruition — and entrepreneur R.J. Scaringe has been a big, big part of that up to this point. Rivian: The Story So Far Robert “R.J” Scaringe and Rivian began focusing on autonomous, electric-powered vehicles as far back as 2011. Just a few years later, they received a substantial investment that allowed them to open research facilities in both Michigan and on the West Coast a few years later. The Michigan headquarters, in particular, proved to be very strategic, as it allowed them to operate closer to some of their key supply chain partners. But in those early days of the company, Scaringe had his eyes set on one thing: an electric sports car. Production was supposed to begin in 2013, but a number of setbacks prevented that from happening. As is true with any successful entrepreneur, R.J. Scaringe was not one for giving up. By September 2016, Rivian was already in talks to buy a manufacturing plant that formerly belonged to Mitsubishi in Illinois. Not only did they purchase the plant itself, but they also got access to everything in it — allowing them to build a new manufacturing facility with an eye toward a decidedly different direction than the one they had settled on prior. All of that hard work and perseverance paid off in the form of the 2022 Rivian R1T — the first mass-produced electric truck in the United States. Again, Motor Trend called it “part truck, part sport sedan and 100 percent amazing” — no faint praise, to be sure. The Rivian R1T offers a four-motor, four-wheel-drive system that is capable of delivering 415 horsepower and no less than 413-foot pounds of torque to the front wheels. This, along with 420 horsepower and 495-foot pounds delivered to the rears, allow it to go from 0mph to 60mph in as little as three seconds. When people think about electric vehicles, they often call to mind situations where they would have to make certain compromises. Maybe an electric car doesn’t go as fast as its traditional alternatives, or maybe it can’t travel as far. They assume that they’ll probably be limited in terms of performance under certain conditions. The Rivian R1T shatters all of these assumptions for the benefit of an entire industry. Building a Successful Business, One Brick at a Time Rivian has been so successful up to this point that it has attracted the attention of a number of unlikely people — including Jeff Bezos, currently known as the richest man in the world. In the fall of 2020, while the COVID-19 pandemic was still at its height, Bezos was able to preview the Rivian R1T at the company’s plant in Plymouth, Michigan. It’s safe to say that he was enthusiastic about what he saw because Bezos’ own Amazon soon invested $700 million into the company. This caused a ripple effect in the best possible way. Just two months later and Ford had invested an additional $500 million. Overall, Rivian has been able to raise more than $1.7 billion in capital — all without actually selling one truck or sport utility vehicle in the United States. During this period, R.J. Scaringe has come a long way from his humble beginnings studying mechanical engineering at the Massachusetts Institute of Technology. After earning his doctorate, he returned to his native Florida and began Rivian. During these early days, not only did he lack the resources to properly execute his vision — he was also the sole employee for a period of time. R.J. Scaringe’s entrepreneurial story is one filled with adversity from that point forward. Unfortunately, not only did he found his company at the height of the financial crisis during a time when investors were being very, very precise about where they were spending their money, but he also had to deal with the negative side effects brought on by the bankruptcies of both General Motors and Chrysler. To say that nobody wanted to invest in a car company at that point was a bit of an understatement. But still, Scaringe never gave up. He spoke to family and friends and collected as much money as he could. Both he and his father took out second mortgages on their homes to raise as much money as possible. He slowly put together a small team to work on the aforementioned electric sports car but unfortunately had to end that project when he was unsatisfied with the results. Flash forward to today and Rivian is aiming for an IPO. It wants to go public with a valuation of nearly $70 billion. Not only would that be significantly higher than what the market thinks that rival Ford is worth, but it would also make it one of the most valuable auto manufacturers on the planet. All of this is thanks to the fact that R.J. Scaringe shared one important quality with all the entrepreneurs he’s always admired: He was never willing to give up. It’s a mantra that has certainly served him well over the next decade and will continue to do so for years to come.

Article Highlights:

Potential Credit 
Eligible Employees 
Credit Determination 
Certification Process 
Other Issues 

The Covid-19 pandemic has had a significant impact on the labor market – mandated government lockdowns and workers’ and customers’ fears of contracting the illness resulted in businesses closing or temporarily cutting back and laying off or furloughing millions of employees. In April 2020, the unemployment rate reached 14.8%, the highest rate since such data started to be collected in 1948. While by September 2021 the unemployment rate had declined to 4.8%, millions of job openings went unfilled as former employees were reluctant to return to work. Some businesses still weren’t operating at full capacity because they weren’t able to find enough employees. If you are a business owner, and are hiring new workers, you may be able to claim a Work Opportunity Tax Credit (WOTC) if you hire someone who has been unemployed for 27 consecutive weeks or more or if the individual is from one of several other categories of eligible employees, as explained below. This credit is an income tax credit, unlike some of the pandemic-related credits that are applied to employment taxes of the business. The WOTC is typically worth up to $2,400 for each eligible employee, but it can be worth up to $9,600 for certain veterans and up to $9,000 for “long-term family assistance recipients.” The credit, which was extended by Congress in late 2020 legislation, is available for eligible employees who begin working for the new employer after 2020 and before 2026. Generally, an employer is eligible for the WOTC only when paying qualified wages to members of any of the targeted groups listed below. For more details on the required qualifications for each group, see the instructions for IRS Form 8850 (Pre-Screening Notice and Certification Request for the Work Opportunity Credit).
(1) Qualified IV-A recipients – generally, members of a family that is receiving assistance under the Temporary Assistance for Needy Families (TANF) program; (2) Qualified veterans; (3) Qualified ex-felons – generally, those hired within one year of release from prison; (4) Designated community residents – those who are aged 18 through 39 and who are living in an empowerment zone or a rural renewal area*; (5) Vocational rehabilitation referrals – handicapped individuals who are referred by rehabilitation agencies; (6) Qualified summer youth employees – those who are 16 or 17 years old, have never previously worked for the employer and reside in an empowerment zone*; (7) Qualified members of families who participate in the Supplemental Nutritional Assistance Program (SNAP); (8) Qualified Supplemental Security Income recipients; (9) Qualified long-term family assistance recipients – those receiving TANF assistance payments; and (10) Qualified long-term-unemployed individuals. The period of unemployment cannot be less than 27 consecutive weeks, and must include a period (which may be less than 27 consecutive weeks) in which the individual received unemployment compensation under state or federal law.

* Both empowerment zones and rural renewal areas are listed in the IRS Form 8850 instructions. The empowerment zone designations expired at the end of 2020. However, the legislation that extended the WOTC through 2025 also provides for an extension of the designations to the end of 2025.
For an employer to qualify for the credit, the employee must work a minimum of 120 hours and receive at least 50% of his or her wages from that employer for working in the employer’s trade or business. Relatives of the employer and employees who have previously worked for the employer do not qualify for the credit. For an employee from most of the targeted groups, the credit is based upon the first $6,000 of first-year wages. If an employee completes at least 120 hours but less than 400 hours of service for the employer, the credit is equal to those wages multiplied by 25%. If the employee completes 400 or more hours of service, the credit is equal to the wages multiplied by 40%. Thus, the maximum credit per employee in one of these groups would be $2,400 (.4 x $6,000). For the summer youth employees, only the first $3,000 of the first-year wages are taken into account, resulting in a maximum per-employee credit of $1,200 (.4 x $3,000) Two categories allow for higher first-year wages to be eligible when calculating the credit:

Long-term family assistance recipients – For this category, the first-year wage that can be taken into account for the credit is increased to $10,000, thus allowing a maximum credit of $4,000 (.4 x $10,000). In addition, this group qualifies for a credit in the second year (immediately following the first year); this is equal to 50% of second-year wages up to $10,000.
Veterans – The three possible qualifications of veterans (family received SNAP benefits, unemployed, or service-related disability) have applicable first-year wages for the credit of up to $12,000, up to $14,000 and up to $24,000. Thus, the maximum credit for this group is between $4,800 (.4 x $12,000) and $9,600 (.4 x $24,000), depending upon the qualification. The unemployment-based qualification for veterans without a service-related disability is either that the veteran was:
o (1) Unemployed for a period or periods totaling at least 4 weeks (whether or not consecutive) but less than 6 months in the 1-year period ending on the hiring date, or o (2) Unemployed for a period or periods totaling at least 6 months (whether or not consecutive) in the 1-year period ending on the hiring date.

Certification Process – To be eligible to claim the WOTC, the employer must file Form 8850 with its state workforce agency (SWA) no later than 28 days after an eligible employee begins work. Due to the COVID-19 emergency, the IRS has extended many filing due dates, including if the 28th calendar day falls on or after January 1, 2021, and before October 9, 2021; in that case, employers are allowed to submit Form 8850 to the SWA by November 8, 2021. Once the worker is state-certified as a member of a targeted group and has worked sufficient hours, the employer can claim the WOTC on Form 5884 (Work Opportunity Credit). Other Issues:

No Multiple Benefits – No deduction is allowed for the portion of wages equal to the WOTC for that tax year. Also, the same wages used to compute the WOTC can’t be used by the employer when claiming the coronavirus-related Employee Retention Credit, the credit for qualified sick and family leave, and the disaster-related employee retention credit. 
Unused Current-Year Credit – The credit is included in the general business credit, and if an employer’s credit is greater than its income-tax liability (including the alternative minimum tax), the excess credit is considered an unused credit that is available for use on another year’s return. The unused credit is first carried back one year (generally by amending the return for the carryback year) and then carried forward until any remaining credit is used up (but for no more than 20 years).

If you are expanding your work force as the pandemic winds down, be sure to keep in mind that you may be eligible to claim the WOTC for eligible employees from the targeted tax groups noted in this article. However, in some circumstances, electing not to claim the WOTC may be more valuable tax-wise for you. Please call this office for additional information related to the WOTC and to see if it would be beneficial in your particular tax circumstances.

One of the most important things to understand about being a startup entrepreneur is that there is no “one size fits all” approach to what you’re doing. Everyone’s path is different, and you need to find out your own if you want to have any reasonable chance for long-term success. Having said that, there are a number of qualities that successful startups share — and there are a plethora of best practices that you can and should use to your advantage. Again — nobody can tell you exactly what to do as there is no road map. But by keeping a few critical things in mind, you can increase the chances that your startup will stand the test of time exponentially. Launching Your Startup the Right Way: An Overview By far, one of the most important tips that you can use to get your startup off the ground has to do with practicing patience whenever possible. Rome wasn’t built in a day, and your successful business won’t be, either. Yes, there are times when progress will move slower than you’d like. You may set a timeframe for yourself to hit certain milestones, and there will be situations where you’ll miss them. Sometimes, they’re because of mistakes you’ve made along the way, while other times they’ll be due to factors that are totally outside your control. But while the arc of progress may be slow, it’s also nothing if not stable — meaning that if you just remain patient and stay the course, you will soon get the results that you’re after. Another critical tip that can help with your startup efforts involves spending that initial capital not just slowly, but wisely. Many of the entrepreneurs who run into issues try to “spend their way to the top,” as it were. Similar to the point about patience outlined above, they just want to hit each milestone as quickly as they possibly can. Soon, they begin to get careless — almost greedy. They lose sight of the things that really matter and believe too much in the old saying that “you have to spend money to make money.” Instead, what you should really be doing is investing every dollar available to you into short-term returns. That way, as you begin to generate more income, you can funnel that money back into the business in those areas where it will do the most good. This helps avoid major cashflow issues (another significant pain point for many startups), and it also allows you to grow at a steady and stable rate as well. But while growth is certainly important, also remember that sometimes you need to focus your actions on the tasks that don’t scale, too. If you’re a software development company, for example, sometimes, you have to spend time writing code with which you’re not necessarily 100% satisfied to get features to customers not in months or weeks, but in days. You can always go back and fix those issues later — never lose sight of the fact that the number one priority involves making sure that your product is always moving along the path you’ve set out for yourself. Finally, one of the best ways to make sure that your startup gets off on the right foot involves freeing yourself of the idea that outsourcing is somehow beneath you. You’re an entrepreneur, yes. That “can-do” spirit is a large part of what allowed you to enjoy so much success up to this point. But that doesn’t mean that you’re an expert in everything, and outsourcing can be an ideal way to help fill those gaps in your skillset that currently exist. If accounting isn’t your strong point, for example, don’t assume that you can “learn on the fly.” The stakes are too high to get that one wrong. In that situation, outsourcing is far more efficient — not to mention more cost-effective — than building an expensive in-house team. If nothing else, outsourcing also frees up your valuable time so that you can devote the maximum amount of your attention where it belongs — on your business. That in and of itself may be the most important benefit of all. If you’d like to find out about even more tips that you can use to effectively get your startup off the ground so that you can make the best possible first impression, or if you’d like to get answers to any additional questions you may have in a bit more detail, please don’t delay — contact our office today.

Employers must comply with numerous requirements, including paperwork and notices, when hiring new employees. In addition to required new hire paperwork, documentation is recommended to help administer payroll, benefits, and other HR responsibilities. Here are some key forms to keep in mind: Required New Hire Paperwork:

Form I-9. An I-9 Form must be completed for each new hire to verify the individual’s identity and that they are authorized to work in the United States. To complete Section 2 of the I-9, employees must present documents for this verification. The I-9 Form includes a List of Acceptable Documents (List A, List B, and List C). An employee must present one document from List A or one document from List B and one document from List C.
o List A documents: establish both identity and employment authorization o List B documents: establish identity only o List C documents: establish employment authorization only
Employers must generally inspect Section 2 documents in the employee’s physical presence. However, due to the pandemic, the U.S. Department of Homeland Security (DHS) has offered employers some flexibility. Specifically, from April 1, 2021 through December 31, 2021, the requirement that employers inspect the I-9 documentation in-person applies only to those employees who physically report to work at a company location on any regular, consistent, or predictable basis, according to the DHS. If employees hired on or after April 1, 2021 work exclusively in a remote setting due to COVID-19-related precautions, they are temporarily exempt from the physical inspection requirements until they go back into the workplace on a regular, consistent, or predictable basis, or the DHS terminates the flexible option, whichever is earlier. 
Form W-4. All new hires must complete a W-4 to determine the amount of federal income tax to withhold from their wages. Several states also require a tax withholding form. Employers should ensure that they are using the latest version of the form, which may change each year. If the employee has questions or asks for advice on how to complete a W-4, instruct them to speak with a tax advisor. 
Notice of Coverage Options. Under the Affordable Care Act (ACA), employers must provide a Notice of Coverage Options to all new hires within 14 days of their start date. This requirement applies even if the employer doesn’t offer health insurance and/or the employee is not eligible for health insurance. 
Wage and hour. Under federal law, employers that use the tip credit must first notify tipped employees of: o The minimum cash wage that will be paid; o The tip credit amount, which cannot exceed the value of the tips actually received by the employee; o That all tips received by the tipped employee must be retained by the employee except for a valid tip pooling arrangement limited to employees who customarily and regularly receive tips. 
State and local notices. Many states and local jurisdictions also require that employers provide specific notices to employees at the time of hire. These required notices may cover state disability insurance, state-run retirement programs, leave entitlements, harassment and discrimination, workers’ compensation, unemployment, and other employment-related benefits and protections. Many states require employers to provide, in writing, the employer’s business name, address, and telephone number; the employee’s rate of pay and regular payday; and certain other information. Provide new hire notices in accordance with your state and local requirements. 
New hire reporting. Federal law requires that employers submit certain information to their state regarding each new hire within 20 days of the employee’s start date, but several states have shorter timeframes. New hire reporting is included in many RUN Powered by ADP® packages. If you have to fulfill these responsibilities on your own, you have several options, such as submitting the new hire’s W-4 or an equivalent form. Check your state’s new hire reporting program for details. 

Recommended new hire paperwork: 

Handbook acknowledgment. After new hires are provided with a copy of your employee handbook, they should sign a form acknowledging that they have received and are responsible for complying with all company policies. Make sure you give employees enough time to read and ask questions about the handbook before they are required to sign the acknowledgment form. Make sure you provide new hires with your policies related to preventing the spread of COVID-19, such as any mask and vaccination requirements. 
Payroll authorizations. If you offer direct deposit, provide new hires with a direct deposit authorization if they would like their pay deposited directly into their bank account each pay period. A payroll deduction authorization should also be provided for voluntary deductions, such as health insurance premiums and retirement savings plans. 
Benefits information. All new hires should receive information about the benefit programs you offer as well as any forms required to enroll. Note: Employers with health benefit and/or retirement plans must provide a summary plan description (SPD) to individuals when they become a participant in the plan or a beneficiary under such a plan. New employees must receive a copy of the SPD within 90 days after becoming covered by the plan. 
Emergency contact. An emergency contact form lets you know who to contact in the case of an emergency. This form should be completed within the employee’s first few days of work. 
Receipt of company property. If you provide your new hire with company property, such as a laptop, cell phone, or key, have the employee complete a receipt of company property form. This acknowledges that the employee has received the company property listed, that they will maintain it in good condition, and that they will return it upon separation from the company, or earlier if requested. 

Conclusion: The forms listed above can be found in the New Hire Paperwork section of HR411®. Consider using a checklist to ensure that you complete and provide all required documents to each new hire. This story originally published on HR Tip of the Week – a blog providing practical information on hiring, benefits, pay, and more – by ADP®. Learn more about how ADP’s small business expertise and easy-to-use tools can simplify payroll & HR at adp.com.