Saturday, December 13, 2014

What you can do to reduce S.O.H.O. stress at income tax time.

What you can do to reduce S.O.H.O. stress at income tax time.

Most Small Office Home Office businesses take their information to a professional for tax return preparation.  If you have not already implemented an organized system for your records here are some tips that will save you time and money.

This year before you see your income tax professional:

    Get organized.  Sort your information into separate file folders that are labelled according to Expense and Revenue types.

    Create a separate folder for your GST, Income Tax, Bank Statements, Bank Loans, Credit Card Statements, Charitable Receipts, Investments (RRSP, GIC, etc.), and Medical Receipts.  (The medical receipts may be used for your personal income tax.)

    Store the folders in alphabetical order in a portable accordion file folder or banker’s box (depending on how much paperwork you have). Label with your name and contact information.

    Make sure that all related documents are accounted for.  E.g.  Utility bills for each business month are in the Utilities folder.  Bank loan information should include interest expense information, etc.

    Be realistic about your expenses and get rid of all receipts that are not business related.  Revenue Canada will not allow the following expenses for most of us:

a)      Hair cuts

b)      Dry cleaning

c)      Holiday excursions

d)      Pet expenses

e)      Clothing and jewellery

    Include your mileage log or the number of kilometres travelled for business.  You will need this to determine how much of your Vehicle Insurance, Vehicle Maintenance, and Gas/Oil can be expensed.

    Make a list of all business equipment purchased and/or discarded this year.

    Make a list of any accounts receivable invoices that might be uncollectible.

    How many rooms are there in your home and how many of those are used for business? This information is required to calculate the percentage of business portion of expenses.

    Invest in an RRSP or increase your contribution total before the February deadline if your budget allows.

For your next business year:

Ø     Start at number one from the above list and keep on top of things to avoid last minute panic.

Ø     Buy a user friendly accounting package like Simply Accounting or hire someone to keep your accounting records up to date, so you can get a better handle of how your business is doing.

Ø     Keep your business and personal transactions separated as much as possible.

Ø     Keep the number of business credit card and bank accounts to a minimum.  With each account that you have, additional time will be required to reconcile information, which in turn will cost you more money.

Ø     Start your RRSP program if you haven’t already done so.

Ø     Apply for a GST number if you have not already got one and your projected sales for this year will be over $30,000.00.


Friday, December 5, 2014

Why Start a Business

Why Start a Business


Why would anyone ever want to start a business? The simple answer may be “to make money”. But is that really true? I mean, you can do other things to make  money. Get a job. Any job. If you’re lucky, you might even get to work for companies that provide full benefits for their workers. There is nothing wrong with that. It’s safe and secure. For me, that just sounds so boring! Here are the reasons as to why you should start a business and become an entrepreneur right now:

Be your own boss- When owning a business, you are the boss. You choose who you work with, dictate how you want your company to run, and even set your own hours. There will be obstacles associating with self-employment. Prepare to fail and expect to make mistakes. These experiences will improve yourself and your business in the long run. You certainly won’t have the privilege of growing with such mentality under someone else’s rules. You’ll always be scared of being fired. Being your own boss can set you free.

Take on a challenge- I can’t imagine myself going to the same old job, repeating the same routines, and turning into robots. If I have to work, I’d want something challenging. Wouldn’t you? When you start a business, things don’t always go smoothly. You need to deal with employees, customers, partners, investors, etc. Your leadership and decision-making skills will constantly be tested. You’ll be exposed to failures as well. That is all of the job descriptions. Did you know that about 2 out of 3 of small businesses don’t make it after couple of years? Not everyone can start a business. And certainly, not everyone can maintain a business. You’ll need to take risks. Just thinking about it makes me excited. Starting a business is challenging and mind-stimulating. I feel like I can never be bored. There are always something to do and improve.

Meet new people- Most of the CEOs spend their times in meetings. Business deals are done over meals and social settings. In the business world, you are required to interact with other people. If you don’t like that, perhaps you shouldn’t start a business. People interaction is the beauty of entrepreneurship. You’ll get to meet new people just about everyday. Building your social network and knowing the right people are the two most important keys in reaching your success. You’ll get to travel and learn from different perspectives.

Follow your passion- The difference between businessmen and entrepreneurs is that businessmen follow money. Entrepreneurs go after their passions. When you have your own company, you need to believe that your product or service is the best. If you can’t even do that, how are you going to get other people to believe in you? Starting a business gives you an opportunity to bring your ideas to life. Passion comes first, then money will follow.

Change the world- Okay, maybe you won’t be able to change the world overnight. But most business ideas start off by addressing the current problems that we have. Then businesses get turn into the possible solutions we can offer to the potential customers. Businesses can change people’s lifestyles, improve technology, encourage innovations, embrace creativity, and save lives. You’re helping people and making money at the same time. What is there not to like?

The road of starting your own business and becoming an entrepreneur will not be easy. Are you going to wonder “what if…” forever? If there is an idea you’ve always wanted pursue, now is the time to make it happen.