Stepping out on your own is scary, overwhelming, exciting and exhilarating. These are my best tips for starting a business to jump-start your success.
Article Written for TaxWrx by Chartered Professional Accountant Jillian Battaglio.
So, you want to start a business!
Where do you start?
There are likely many, many things on your to-do list and it is growing by the minute.
Let's help clear some of the clutter to make your job easier.
Not all the tips I’m going to give you will be new. In fact, you may have heard some of them before.
My father, a retired small business banker, passed along many of them when I was first starting out.
But to be honest, I ignored most of them.
I thought I knew better. Maybe it was my age, maybe my maturity, maybe I was just naïve… but honestly, it meant I struggled.
A lot.
Owning my own business was SO MUCH harder than I thought it would be.
I got my but kicked and had to learn the hard way.
I hope you learn from my mistakes and consider implementing some of these tips when starting your business because they can make a huge difference. I’ve been implementing them for years and have seen great results because of them.
Tip # 1 - Consider Your Product
What do you want to sell, and more importantly, what do you NOT want to sell?
I offered too many services when I first opened my doors. It was hard to keep track of everything I had on the go and meant some balls got dropped.
This caused unnecessary stress, overwhelm, and unhappy customers. My profitability also suffered because of it.
Deciding WHAT you want to deliver with excellence every day you head into work will help make your small business venture a dream rather than a nightmare.
Tip # 2 – Consider Your Customers
Who do you want to sell to and more importantly, who do you NOT want to sell to?
Really think about your ideal customers:
How old are they?
How comfortable are they with technology?
What are their hobbies?
What are their personalities?
What are their professions?
Where do they live?
Really considering WHO you want to work with will make your business blossom and life much more enjoyable.
Being unhappy with their customers is one of the big reasons my small business clients close their doors.
Set yourself up for success and decide on your preferred customer group early.
"I thought I knew better. Maybe it was my age, maybe my maturity, maybe I was just naïve… but honestly, it meant I struggled." – Jillian Battaglio, CPA, CA
Tip # 3 – Plan For Marketing
Sales, marketing. Ugh.
Yeah, that was my impression – no thanks, I’ll be fine.
And I was… kind of.
You don’t market to get customers; you market to get the right customers.
This makes your life more enjoyable and your business more profitable.
I learned this the hard way after many years of struggling. Don’t make the same mistake I did. Consider your marketing plan ahead of time.
Tip # 4 – Consider If You Should Incorporate
Be sure to check out some of our other videos and articles on the incorporation decision. It’s a big topic and a big decision.
Making the right choice early can save you administrative pain and thousands of dollars.
Tip # 5 – Know Your Tax Obligations
You may need to save for:
Personal income taxes
Corporate income taxes
GST/HST
Provincial Sales Tax (PST)
WorkSafe insurance
Payroll taxes
We go through each of these tax obligations in detail on our membership platform to make sure you have all the facts, but let’s go through a few quick tips.
#1 - Set aside 20 – 30% of your business profits or cash withdrawals in a savings account to prepare for your tax bill. A big tax bill is a nasty surprise and very common for small business owners in Canada.
#2 - GST/HST usually kicks in when your total sales or money earned exceeds $30,000 in any 12-month period. Once registered with the CRA you will need to collect and pay every year.
#3 - For your provincial sales tax or PST tax obligations check with your provincial government. In BC, PST is super specific to what you are selling so reaching out to your provincial tax authority is the best way to avoid a nasty surprise.
#4 – If you are incorporated, have subcontractors, or have employees you may need to register for WorkSafe. Check with your provincial WorkSafe authority about registration requirements as this is specific to the province you live in.
#5 – Do you have employees? Make sure you register with the CRA for a payroll account.
Tip # 6 – Keep All Your Receipts
Either paper or PDF is just fine but you do need detailed information on what you purchased.
Many clients are told by uninformed professionals or heedless acquaintances that bank statements are sufficient. This is NOT true.
The CRA will ask for receipts in the event of an audit, so keep your paperwork.
What do you keep?
Anything that you can reasonably justify as a business expense is valid if there is a direct link between it and your future sales.
This might include home office expenses, motor vehicle receipts, and your personal cell phone bill.
Tip # 7 – Plan for Your Bookkeeping
In my experience, bookkeeping overwhelm and procrastination is the # 1 reason why clients get behind in their tax filings, are surprised by their tax bills and get unnecessarily audited.
Do yourself, and your taxes a favour. Decide early how you’ll do your monthly bookkeeping, stick to it, or find an awesome bookkeeper to help you out.
Tip # 8 – Be a Learner
My well-meaning father nagged me about business books for years after I started my own accounting firm.
Yeah, yeah, yeah.
Well, I finally picked up a book out of desperation and desolation.
Holy crap!
I had been missing a gold mine. Don’t miss the treasure available nearby. Pick up a book or subscribe to our website and start your journey.
Tip # 9 - Just Get Started
Many would-be entrepreneurs never launch because they are trying to perfect their business, create all the needed processes and plan for every potential issue.
Planning and forethought are crucial, and you should spend some time doing them, but don’t let them unnecessarily delay you.
Launch your business and learn from your mistakes.
You will make them, a lot of them.
And yes, they will hurt.
They will be embarrassing.
Successful business owners make mistakes and then fix them.
They persevere oftentimes over years to grow their businesses into “overnight successes”.
So, launch, and see what you can accomplish. You might just surprise yourself.
Need More Guidance?
There are about a million other tips I would love to give you, but we are out of time for today. I hope you have found this article helpful when considering where to start with your new venture.
As a bonus for our website members, we have a super handy checklist available to our subscribers to help you get organized when starting a business. It contains the above tips along with a few other gold nuggets.
Be sure to check out our membership plans to gain access to this checklist.
If this topic has interested you, be sure to check out our other blog articles and consider subscribing to one of our membership plans so you can be a well-informed business owner.
Article Written for TaxWrx by Chartered Professional Accountant Jillian Battaglio.