Employee vs. Self Employed: Criteria and Considerations

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.

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7 Qualities of Highly Desirable Clients

“I want to create a rival to Twitter. So I want it exactly the same except where it says What’s Happening? I want it to say How are you feeling?”(From the very funny "Clients from Hell")

This pretty much sums up the type of client we don't want - ridiculous expectations, unimaginative and just plain clueless. Conversely, there are some clients that are a pleasure to deal with.  Ones that ask great questions, and make us feel happy to have chosen the entrepreneurial route.  The more important of these are listed below:

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Breaking Up with a (Likeable) Client

Many of us have clients who are annoying, cheap, stupid , high maintenance or some combination thereof.  As a new business owner, we are often stuck with these clients because we need them.  However, we look forward to the day when we will have the thriving business that we so deserve, and fantasize about the spectacular way in which are going to fire them (you can shove your business into your rear orifice etc.)  This is actually a productive fantasy as can help to channel and concentrate anger.  Of course, in the majority of cases, a firing should be conducted with slightly less vigour.

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Tax Tip: Write Off 100% of Computer Hardware

Small Business owners should note that for electronic data processing equipment i.e. computer hardware and related software acquired between January 27, 2009 and January 31, 2011, the entire amount of the purchase can be deducted against income.  This is a significant incentive for business owners to purchase computer equipment before February, 2011.  The accelerated depreciation rate is 100%.  and there is no half year rule.  The usual CCA rate for computer hardware, which is subject to the half year rule (i..e 15% in the first year) is 30%.   To qualify the hardware must be:

  • situated in Canada
  • new equipment
  • used by a business that is conducted in Canada

The applicable CCA Class to select when preparing your tax return is 52.

More information can be found at the CRA website Classes of depreciable property:

Related: Accounting and tax implications of fixed assets 

About the author: Ronika Khanna is an accounting and finance professional who helps small businesses achieve their financial goals.  Please sign up to receive articles pertaining to small business, accounting, tax and other occasional non business topics of interest.  You can also follow her on Facebook or Twitter.

NeatDesk Scanner: Effective Bookkeeping Tool?

As an accountant, I occasionally (literally) get shoeboxes of documents from my small business clients.  Receipts are stuffed in and scrunched up and comprise everything from gas (good) to toilet paper (bad).  As I contemplate the mind numbing exercise where I will have to sift through everything, identify missing information and worst of all, enter it all into an accounting software (usually Quickbooks), I often feel a sense of dread.  I've often fantasized about a tool that could do it all for me (of course I could outsource, but since I only have a handful of these types of clients, it is not worth it, yet...). So, when I saw an ad for the Neatdesk scanner (shown ad nauseum on CNBC), I felt a little bit of glee as I perceived a potential solution to (at least part of ) the problem. 

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3 Great Resources For Your Facebook Business Page

 

Every small business should consider setting up a facebook business page.  Except for your time (which is an opportunity cost), there are no explicit costs to setting up a page, and the rewards can be significant.  Keep in mind that, after you have set up your page and have found 25 people to like it, you are entitled to a "vanity" url (mine is http://www.facebook.com/montrealfinancial) This, in addition to being kind of exciting, is akin to reserving a domain name for your business.

Below are three articles that provide essential guidance and resources to anyone looking to either setup a business page for the first time, or enhance their existing page.  It is important to note that a facebook page does require regular updates, and  interaction to act as an effective marketing tool.

 

 

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Small Business Jobs and Credit Bill: Key Provisions

The US senate passed the Small Business Jobs and Credit Act, introduced on May 13, 2010, by a vote of 62 to 38.  The vote included the support of two republicans - George Voinovich of Ohio and George LeMieux of Florida.  The bill will go back to the House of Representatives where democrats are hoping it will be approved without delay.  Some of the key provisions of the bill are as follows:

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Breakeven Analysis for Small Business

When planning to start a new business, one of the first questions you ask yourself (and hopefully your accountant) is at what point are you going to start making money.  One  simple way to determine this is to calculate the breakeven point, which is the point at which your sales (revenues) equal your expenses.

How is it calculated?

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Noteworthy: August20, 2010 - Mark Hurd "resignation", Startup Considerations and Traits of Happy Entrepreneurs

  • Quebeckers not overly interested in wealth creation:

Using 20 indicators, it (Quebec Employers Council) gave Quebec good marks for university graduation, taxation on business investment and spending on research and development. That was offset by the need to do more on the economic integration of immigrants, payroll taxes, labour laws and public debt, the council said in its first report card.

  • The real reason Mark Hurd was forced to resign:

Apparently Mark Hurd's "resignation" had less to do with a violation of HP's sexual harassment policy and more to do with Board's fear of bad publicity.  Although improprieties in his expense reports would have given them cause to fire him, they let him resign (along with his $40 million severance) to avoid a possibility of a wrongful termination lawsuit.

  • 10 Things to Consider before Starting your Start-Up

The article contemplates factors to consider including before launching a startup including competition, industry, funding and marketing.

Thriving on risk, patience and being competent at different jobs are all characteristics of an entrepreneur.