As a confirmed excel nerd, there is something about large amounts of data that I am inextricably drawn towards . I suppose it has something to do with an affinity for organization combined with a love of numbers and the innate desire to solve problems. As an accountant and financial consultant , I am often presented with the task of organizing and analysing data into a format that allows for greater insight into my clients businesses . And although good accounting software is absolutely necessary for any small business owner, a significant amount of analysis and reporting is done most effectively in excel.Read More
One of the first tax questions you will be faced with as a small business owner or self employed worker is whether you need to register for GST/HST & QST. The answer in most cases is that if you anticipate that your annual gross revenues (total sales) are going to exceed $30,000, then you should register for GST/HST and QST UNLESS you are considered to be providing a zero rated or tax exempt product or service, in which case you are not required to register.
A more detailed analysis of whether you are required to register for GST-QST
Attending conferences and investing in ongoing training can be a great way for small business owners to keep current on industry developments and improve their skills. It also allows for networking opportunities and occasionally includes trips to exotic locations (and Las Vegas), which can be a nice break. The best part is that the cost of both the events and travel are deductible against your business income, subject to specific guidelines discussed below.Read More
Being self employed comes with many benefits. You can sleep in, work in your pyjamas and go shopping in the middle of the day. You no longer have to report to a boss who doesn't really understand what you do or deal with mindless workplace politics. It all sounds wonderful, but unfortunately there are also many challenges. Small business owners have to deal with uncertainty and risk. They need to be disciplined and deal with the many demands that being self employed can impose upon us. In the early stages of self employment, most of us have to take on the responsiblity of fulfilling the administrative functions that you find in a more established business. Some of the skills that you need to develop are:
One of the numerous ways in which technology has benefitted small businesses has been to increase the number of payment options available. While conventional methods of payment like cash and cheque still exist, there are also a variety of other options like debit cards, internet transfers and mobile payments that have greatly facilitated payment infrastructure and made financial management significantly more flexible. Every business owner must wade through the alternatives and decide what type of payment options are right for their customers. This is based on several factors including their industry, common practices, location and of course business specific considerations. For example, a retailer will usually allow for payment by credit and debit cards, cash and possibly some form of mobile payment. Conversely, a law office may not offer a credit card option, but request payments via cheque or bank transfer.
Some payment alternatives for small businesses to consider are discussed below:Read More
There are many employees out there to whom the promise of self-employment aka freelancing aka independent consulting (all of whom are ultimately small business owners) seems extremely appealing (particularly with a comfortable pair of pajamas). You might crave the feeling of accomplishment that is no longer possible at your current place of employment; you might want greater flexibility or feel that you are not being compensated enough for your skills or perseverance. Or you simply might want a change of pace.
While being self-employed can accomplish all of these goals, the transition itself is not as simple as it might seem nor is it the right decision for everybody. There are many factors that need to be considered and many mental and financial preparations that should be made prior to taking this potentially life altering decision.
I met with a small business owner recently who had just purchased a retail business and was looking for a new accountant. It seems that the current accountant was reviewing her books on a quarterly basis, preparing financial statements and doing the year-end tax returns – all typical accountant stuff. The problem was that the accountant, while charging this small business a fairly significant amount of money, was not really adding any value to their business. The bookkeeping, which was done by the previous business owner, was still being entered manually in ledgers (!). The quarterly accounting review consisted of checking the ledgers for mathematical accuracy and ensuring no major deductions had been missed without any discussion regarding the performance of the business. Worst of all, the accountant was not responding to the client’s requests for a meeting.
There are many great accountants out there, however it is important to ensure that you are hiring someone who will compliment your business and add value. Below are some of the qualities that should be considered either with respect to your accountant:
One of first decisions you have to make when embarking on your small business venture is the type of business structure to select. There are essentially two choices – business registration (sole proprietorship or partnership) or incorporation. Like many small business decisions, the answer can be ambiguous and depends on the business owner’s specific set of circumstancesRead More
One of the benefits of having a home based business (for freelancers, self employed contractors and small business owners) is that you can deduct the expenses relating to the space that you use to work. This can result in a significant reduction in your tax bill for costs that you would incur regardless, giving you one more reason to love being your own boss.
Criteria for Deductibility:
For home office expenses to be deductible, they have to meet the following criteria:
- It has to be your principal place of business i.e. you cannot deduct home office expenses if you have another office that relates to your business, elsewhere, even if you work 22 hours a day or you check your blackberry in bed.
- The space designated as your home office is used to earn business income and/or you meet clients or customers on a regular basis. You can deduct expenses relating to the workspace in your garage which is used for home improvement projects.
One of the most challenging aspects of starting a new business is knowing what to charge for your services. In economics terms, the ideal price is where demand meets supply. The problem, of course, is that at the beginning we tend to have a lot more supply than demand. This can lead to imprudent pricing decisions. Below are 3 considerations to take into account when determining the price for your services:Read More
Perhaps the most daunting aspect of starting a new small service based business is building a client base. On the other hand, there is nothing quite so exciting as getting those first few clients.
When trying to generate new business, it is important to cast a wide net as you never know where potential clients may be lurking. There are many ways to build a client base, even with limited resources. I have outlined some below:
For the majority of income earners, employment status is pretty evident. If you are going to the same place every day, have an assigned cubicle with a computer and corporate stapler, and your boss tells you what you need to do, chances are that you are an employee. Conversely if you have several clients, use your own laptop, and are worried about where your next sale is going to come from, you are most likely, self employed.
After thinking long and hard you have decided that is time to launch your own business. You have a great product or service, you’ve come up with a compelling business name, all the paperwork has been filed and you have picked out the perfect location (or setup a snazzy new home office). Everything seems to be set for your new independent life as a business owner. And then you realize that nobody except your spouse and cat knows about your new venture. So, how do you bring your fabulous new product to your target market's attention? One way is to use the “build it and they will come” approach. This is usually not particularly effective (even Google, who historically launches products with little fanfare, could benefit from a little more marketing). The other, more effective approach is to get out there and promote your business. Of course in the initial stages, marketing budgets tend to be miniscule. On the other hand, many new business owners have time on their hands, while they wait to be deluged by orders. Below is a list of 25 cost effective ways to promote your small business:
The decision to incorporate is one that most small businesses face at some point in their lifetime. Incorporation, literally, represents the creation of a new person. Whereas a sole proprietorship is an extension of one's self, a corporation takes on a life of it's own; it can give birth to subsidiary, marry via a merger and die with a dissolution. It has to file it's own tax return, can be sued and has a set of rules that govern it's existence. Below are some of the points to consider when deciding whether to incorporate:Read More