finance
10 ES S EN T I A L S T EP S W H EN S TA RT I N G YO U R B U S I N ES S b y Ly n n G a g n e
One of my favorite things about teaching business to university students is hearing about their ideas. It’s why my business – my passion – is about helping small, local business owners succeed, from building the foundation to growing success years into their business. As a certified professional bookkeeper, I built a successful bookkeeping firm from just myself to over 15 employees. I know exactly what it’s like to start from nothing and maintain a profitable business. I’ll admit, in the beginning there was a lot I was too embarrassed to ask other business owners. When I finally found out the answers, I was then a little mad. My accountant didn’t tell me what valuable write-offs I was missing. The registries office didn’t educate me what would happen when I incorporated incorrectly. My lawyer made no apologies for charging me money to fix the contracts that I did wrong when I tried to do my own to save money. It was frustrating. And expensive. At this stage of my career, I spend most of my energy coaching other business owners and helping them see the flags that they should be aware of. This is my top 10 things that you should consider when you start your business. 1. Decide on your business type. Will you be a sole proprietor, or incorporated? There are different tax rules, write off methods and implications, deciding on the route you take. There may potentially be a cost to switch types later. Taking the time to understand the correct business type for your needs is extremely important! Some people assume that going into business
12|
means a trip down to registries to incorporate. I literally cringe when I hear someone say “I went and incorporated my business!” knowing that they are better being a sole proprietor than incorporated. The minute you incorporate, you set yourself up for accounting and tax fees that are $2000+ per year. It’s an expensive jump from a sole proprietor, who would typically pay between $250 and $500. 2. Register your company properly (if you are incorporated). “Properly” depends on your industry. In some cases, you may need a lawyer to help with the registration process. Some people confuse registering a trade name with registering a business, when in fact, that’s a different step altogether. When you incorporate, your company will declare shares, ownership, and directors. Sometimes this can be a very important step, so make sure you understand it before you incorporate. 3. If you have a partner, do a USA. USA stands for Unanimous Partnership Agreement. Think of it as the business equivalent of a prenuptial agreement. You and your partner lay out what will happen in the event of this, that, or the other, how you will get paid, what each is responsible for, who is liable if this happens, what are the no-nos, and the like. Regardless of who your partner is, or partners, a USA is a must-do. Don’t even think twice about it. The only downside is in not having one – and we’re talking a possibly nightmarish legal downside. 4. Register a trade name. When you do a trade name, your company just has a “public name”
