What Steps Do I Need to Take to Start a New Business?
Originally Published: Nov 5, 2018
Last week, I sat down with a young guy who is about 25 years old who asked for a bit of my time over dinner to answer his questions about starting a business. When we sat down, I could see his nervousness and excitement in the new venture. After spending a few hours with him, I thought it might assist those of you who wish to start a business to share our conversation over dinner.
Do I open a bank account first or my business first?
His first question was one I am asked by clients often. The business has to be set up first, either by registering a business or incorporating. Once the business has been set up, you can take the registration or incorporation to whatever financial institution of your preference and remember to bring photo ID along with you.
What is the difference between incorporating and registering a business?
A business registration or Master Business Licence gives you the ability to operate a business at a very reasonable price. There are not a lot of bells and whistles, as I explained to him. The registration does not have name protection for the business. You are personally liable and taxed, however, this is an easy set up to get a business off the ground. If you are not as concerned about the business name being protected against others who establish businesses after you and if you don’t have a risk for liability with the business operation, the registration may suit your needs.
If you are concerned about protecting the business name, are worried about the liability associated with your business or your personal revenues from the business have the potential of at least $80,000.00 or more, it may suit you better to incorporate.
What is a write-off and how does it work?
I explained to him that a write-off is a business expense for you to open and operate your business. These include expenses such as bank account costs, advertising, computers, desks, business luncheons or dinners, equipment, and many more items. It is an old school idea, but I told him to keep records on what he spends his money on and put them in a shoebox to provide to either a bookkeeper or accountant. Items that are not available to write-off include clothing, medical expenses, your groceries, take-out or dinners out when not with clients. A bookkeeper or accountant should be able to assist you further in deciding what is available to you and what is not, depending on your industry.
Should I hire an accountant or bookkeeper?
It depends on how complex your business is and the revenues you will earn. If you are starting a small business from the ground up, a bookkeeper may be all you need, and typically these professionals are less expensive. If your business is more complex, or if you have a vast number of suppliers, employees, and business dealings, you may want to look at retaining an accountant as a CA or CPA.
How do I charge clients?
There are a number of great accounting software packages available to assist you to keep track of client’s invoices, your expenses and how your business is doing. The best thing is to do some research and see which one suits your purposes and skill set in accounting. A popular software is Quickbooks or Sage.
Do I have to get HST right away?
Setting up an HST account is an option until your business earns $30,000.00 or more within the same year. If you register a business, that would be from January 1st to December 31st within each year. If you establish an incorporated company, it’s whatever year-end you determine year over year. Within the same 12 month period, once you have reached that $30,000.00 you must register for HST.
Where can I go for further support for my business?
There are all kinds of entrepreneurial support available for new businesses. Some of the places you may seek are associations within your industry, Rotary Clubs, Canada Startups, and of course us at Ontario Business Central.
We have been assisting entrepreneurs for over 25 years to start and grow their businesses. Our staff is here to assist you with any questions you have relating to registering a Master Business Licence or Incorporating. Please feel free to reach out to us with any questions you may have.
See the links below should you be ready to proceed.
Should you have any questions, please feel free to reach out to our staff for additional information and assistance.
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Ontario Business Central Inc. is not a law firm and cannot provide a legal opinion or advice. This information is to assist you in understanding the requirements of registration within the chosen jurisdiction. It is always recommended, when you have legal or accounting questions that you speak to a qualified professional.