Your First Steps after Deciding to Run a Business

  1. Prepare a formal business plan, including marketing and cash flow analysis plan and a formal budget. Identify your unique product/service and income-earning process, your distribution channels, payment methods, pricing policies and gross margins.
  2. Decide which business organization structure better suits your needs. In most cases a sole proprietorship would be the best option for a start-up. Discuss this issue with your advisor.
  3. Know when your business is considered to have started. All the operating expenses could be deducted only after that date.
  4. Open a separate business account, and if your business is not registered just open another chequing account and separate it from all personal expenses.
  5. Start a Daily Business Journal to document your networking, contacts with suppliers and others who will help you build and grow your business.
  6. Start an Auto log and enter all your trips there. Every entry should contain the date, purpose of the trip and odometer readings (at the start and end of the trip).
  7. Never put your financial future in the hands of the first ‘expert’ you meet. Remember you are the expert in your business. An accountant or lawyer will advise you whether or not what you are doing is legally correct. Because of the broad knowledge required to be an all encompassing tax expert, it is impossible to know everything about everyone’s business. So, do not take anyone’s word as the final authority on the topic.
  8. It is extremely important that you never go shopping for an accountant to do your tax return based on price. You are better off to pay $500 or more to a tax professional and put thousands of dollars in tax savings into your pockets year after year.
  9. If you work with an accountant, and he/she says you can’t write something off, have him show you the source of his information. If he doesn’t know, find yourself an accountant who does know the Income Tax Act and not just the tax department’s interpretation of it.
  10. Here is how to tell if you have a good tax professional. He or she should follow the Income Tax Act, rather than the tax department’s interpretations as their source of truth. Obviously, the tax department will interpret the law in their favor. So, you need a good accountant who knows the rules of a Tax Game, and will interpret the law in your favor.

You can always CONTACT US to discuss your particular situation.