5 things I wish everyone knew before starting a business

There is a lot involved in starting a business, and it’s easy to get caught up in the excitement of quitting your 9-5 desk job and finally start pursuing something you’re excited about and becoming your own boss.  I have been a part of helping many small businesses with bookkeeping and managing their finances from the very beginning, and there are a number of tips I love to share with folks who are getting ready to begin the adventure of self employment. 

1. Register your business name.  When you register your business name, you have the ability to do a search and determine whether someone else is using a similar name, and not too close to an existing business.  Once you’ve registered your name and found something unique to you, you can start to build your brand identity. 
   
   To find out more about registering a business name in BC, you can click here
   

2. Have a separate bank account and credit card for your business - Having a separate account for all of your business income and related expenses will make your life so much easier at tax time.  Instead of searching through a stack of receipts, or trying to compile all of your sales and business related expenses from a number of different accounts, having everything in one place will save you time, and also make it much easier to stay in touch with how your business is doing.
   

3. Make sure you know what the sales tax requirements are where you live - Keeping track of your sales throughout the year is of vital importance, especially when it comes to knowing when to register for sales taxes like GST and PST.  In Canada, you are required to register for GST when you exceed $30,000 in revenue over 4 consecutive quarters.  In BC, many businesses are required to register for PST when they exceed $10,000 or more in gross revenue over 12 months.  When in doubt, you can consult a bookkeeper or accounting professional in regards to your particular situation and when you need to register.
   
   You can find out more here:
   GST Registration
   PST Registration (BC)
   

4. Hire a bookkeeper - If you are in a position to do so, hiring a bookkeeper will allow you to take one more element of financial stress off your plate.  Bookkeepers have the capacity to take care of things for you such as sales tax filings, payroll, and getting your books ready for submission for taxes.
   
   

5. Have a separate account for taxes and collecting sales tax.  Many people who are transitioning from working a job as an employee to a self employed individual often don’t realize that they will have to pay income tax on the money they earn throughout the year.  Additionally, if you are collecting sales taxes such as GST, PST, you will have to remit this to the government on a monthly, quarterly or annual basis depending on your individual situation.  It is always a good idea to take approximately 15-20% of the income you earn from your business and put it into a separate account for income taxes.  Additionally, putting the sales taxes you collect into a separate account is a great way to put it out of sight and out of mind so when it comes to having to remit these amounts, you will have them on hand. 
   

As always, this is just general advice and more specific to BC, Canada. It’s always a good idea to consult a professional to get guidance about your specific needs and situation.