Edmonton Business Consultant | How to Start a Business
All right. We’re joined today with the Canadian CPA, a man by the name of Josh spurl and his company. If you’re not familiar with it, you should definitely check them out there. If you’re looking for a Canadian accountant, I know of nobody better than Mr Josh Sperl, which you can find at Sperl, cpa.com that sperl, cpa.com Josh, how are you, sir? Oh, doing great, clay. Doing Great. All right, so we’re talking today about accounting one oh one how to start a business. When starting a business. Who is the first person in your Edmonton Business Consultant that you should talk to? Well, I mean, it might sound a little self serving coming from me, but I truly believe you should talk to your accountant. Why? Well, what’s going to happen is if you talk to other people as generally, you’re going to end up paying more in tax while you’re operating your business.
See that? You should start with the accountant. That’s right. Okay, so what happens if you just try to incorporate it on your Edmonton Business Consultant? You go to legal zoom.com you set up your own entity. You’re the man you are born yesterday, you went to legal zoom.com today, you were born yesterday, you went to legal zoom.com today, what’s going to happen with your tax situation? Well, there’s something called your articles of incorporation and you can think of your Edmonton Business Consultant of incorporation as um, basically a statement of what tax strategies your accountant can employ. And most people when they go to incorporate their own company, they’re only going to have, you know, basically a one page document with one share class. They’re not sure what to do. Um, really, when you come to an accountant first we can give you articles of incorporation or give your lawyer instructions on in creating articles of incorporation that can execute a multitude of tax strategies and just minimize your taxes as you’re running your business.
Now, even though lawyers can actually incorporate a business w why would you want to talk to a CPA even before talking to a lawyer despite mean other than the fact that it definitely is a self serving question. But I mean, no, seriously, but why would somebody want to talk to an accountant previous to an attorney? Well, even a good lawyer will send you to your Edmonton Business Consultant first when you’re starting a business because they want instructions on how to handle the tax provisions with that business. So the, the ultimate scenario is you do have an accountant and a lawyer, you go see that accountant, that accountant will give written instructions to the lawyer and incorporation can happen fairly quickly from there in a tax efficient manner. Uh, your Edmonton Business Consultant got your tax strategy ironed out, your lawyers executing that on the registration and stuff flow smoothly from there.
So if, is there a, I know the Canadian law is different from the, uh, American law, um, but is there a certain business structure that we have a lot of listeners that ask all the time, they’ll say, do I really need to incorporate? Is there a kind of business structure that I could operate in without incorporating, can I just be a sole proprietor? Do I have to really incorporate, yeah, it’s referred to as a sole proprietorship in Canada as well. Um, you know, you can operate as a sole proprietorship with a number of factors to really drill down to see if that’s appropriate or not. Um, you know, limited liability being one, some of the tax strategies are not available if you’re not incorporated. So if you really have to proceed with caution before operating a business without incorporating,
and just to all the listeners out there and getting this idea, if you do not incorporate your Edmonton Business Consultant, you are personally putting your Edmonton Business Consultant assets at risk by doing business. As an example, if you’re a plumber out there, you’re operating as a sole proprietor and you run into a minivan that has somebody in the car who’s a normal person, you have an injury, they are injured, they can sue you personally and go after your personal stuff. Whereas if you’re incorporated, they can just go after your company. So you want to protect yourself. Uh, whether you’re in Canada, Canada, or the United States, you want to make sure you’re not exposing yourself to a personal risk here. That’s isn’t that the real benefit of incorporating in some way there, Josh? I mean, isn’t that a powerful thing? And some of the tax benefits and the debt and the deductions. Yeah, it’s
good that you bring up plumbers. I always bring up plumbers and electricians as the ones that really have that liability, especially plumbers that working on a building, they cause a leak. You know, it’s really easy for on a, on a, on a plumbing project that’s uh, you know, a thousand or 2000 bucks to cause a million or $2 million worth of damage that, that, that happens in those sorts of trades. Um, so it is really important from the limited liability. There’s also in Canada, uh, protection of your Edmonton Business Consultant name as well too. So if you actually have, if you actually are incorporated, you have a legal right to that trade name. Um, one of the things that people, they get confused about as they register a trade name, but corporate registries in Canada and they think they have some sort of legal protection on that trade name. They really have none. It’s just a placeholder. That person who comes in incorporates after now owns that trade name.
Whoa, that’s a Canadian. This just in this, just in from the Canadian mounties listen to what Josh is saying. Take notes. All right, so Josh, uh, what happens to business owners who set up bank accounts and insurance accounts prior to talking to a CPA?
Well, what happens is now they’re not sure what entity they, they should have been running their business. They didn’t, should they have incorporated, you know, are we using a sole proprietorship? Are we using a number of company? Do we have a named company? And now they’ve gone through all this work to set everything up. And a lot of times they really simply have to do it all over again. So it’s just kind of an out of order step in and it’s going to put you behind. Usually when people are incorporating for a business, you know, they have a project there, they’re about to earn revenue and now they’re just going to put themselves back a little bit.
So if I’m thinking about, uh, reaching out to a CPA, whether it’s your Edmonton Business Consultant or some other firm, does it cost money typically to just have an initial consultation with a CPA? I mean, how does that work?
I think for all firms, I know in our firm, you know, we really like to meet with the client and we don’t charge for that initial consult. We re we truly want to understand what your Edmonton Business Consultant are. It’s difficult for us to even assemble a price before we understand what you’re trying to accomplish. Uh, so we don’t charge for initial consults that are from,
and for a lot of the American listeners in the Canadian listeners out there, uh, what are some of the things we should be looking for? What kind of experience should be we should we be looking for when we hire a CPA?
Well, you should be looking for public practice experience. You know, in Canada, we weren’t, uh, we weren’t always, CPAs are, you should be three different accounting designations, ca, CGA and CMA in 2015 those three designations amalgamated. But those three designations don’t have the same training. Uh, you know, I’m a CPA CA, so I trained, uh, in a public practice firm and you know, uh, most cas like myself, you don’t have seen hundreds or thousands of of files where some of the CGAS and CMS haven’t seen that as much. So you should really be looking for public practice experience and specifically public practice experience in the type of industry that you’re working in.
And pretty much the listeners out there who aren’t familiar with the CMA awards, if you’re looking for a pretty marginal awards show with country music from featuring America’s country music stars, I would encourage you to watch about six to seven minutes of the CMS before turning it off. That’s just a tip that I would give for all the listeners out there. A bonus tip now. So would you recommend startups hire CPAs who just do in, do, do, just do the year in taxes or if, should you have a CPA on an ongoing basis that’s advising you on maybe like a each month, a one time kind of a checkup? Well,
I think, you know, your CPA is a strategic partner. Um, you know, it’s published by Industry Canada, 50% of all Canadian small business will fail within five years. And so it’s a, and I know you, you have the, the 90% number in Forbes here. So I think even our Canadian number is probably a little bit skewed by the fact that how we handle medical professional corporations who generally don’t go bankrupt. Uh, so if your exclude the medical professional corporations and, and the lawyers and accountants, I, I have, I have a feeling that number is a lot higher. Um, so I think it’s important to have that strategic partner who can, you know, help keep your Edmonton Business Consultant on the tracks.
Now, just so we’re clear for anybody out there, um, if you get a chance to check this out, it’s pretty incredible stat that I would not encourage you to, uh, be discouraged by. But according to Forbes, eight out of 10 small businesses in America fail just existing companies. But 90% of startups fail in America according to Forbes. And that’s not a good statistic. And what Joshua was just pointing out as in Canada, if a medical company is failing, they’re not doing well. And Canada, there’s different laws. They technically don’t go into bankruptcy like other industries. And so what happens is it skews the data and makes it look a little bit better up north of the border there a little bit. And Bryan Adams is never going to go bankrupt and Bieber’s not going to go bankrupt. And you’ve got Atlanta Morissette not going to go bankrupt. You got the mounties, they can’t go bankrupt. The Blue Jays, I mean, they’re doing good. I mean the Blue Jays, I mean the, you know, the rafters, they’re not going bankrupt. I mean, Drake’s not going bankrupt. There’s a lot of things up north of the border
right there. And I Molson, Hey, do you like Canadian beer? Do you like Molson? I’m not a huge picture of a beer drinker myself, clay, but you know Molson’s all right. Molson’s not going to disappear. The point is there some great Canadian companies up there. That’s, and I don’t mean to just list off the handful of companies that I know, but that’s all I know really about Canada, but it’s all I know is Brian Adams. Alanise Morisset that’s really, is there any, is it, are there other companies up there in Canada beyond those companies? There’s a couple of other companies. Okay. This is just one or two. This Justin, there are, there are, there is life north of the border. Okay. So now if, how can I go out there and, and how can I, if I’m looking for an accountant and I say, okay, I’m looking for a guy, I’m comparing accountant a, accountant B, what are some of the things I should be looking for before I decide on which accountant to hire?
So I think the first thing that you should look at is how is that, how is that accountant going to help you plan to succeed in your Edmonton Business Consultant? Uh, that would be the, the first, the first step to look for, um, you know, you’re going to spend the majority of your income on taxes. Um, you know, the average Canadian spends 43% of their income on taxes and you know, the remaining 37% after that is then spent on house and clothing. So, and Justin Bieber album’s Justin Molson’s it’s third, it’s third up. Nice. Nice. Okay. Now what if, um, I mean, can you, can an accountant, can you guys as a CPA, do you actually help people make business plans? Is that a thing? Um, our firm does, it’s, it’s really, uh, I wouldn’t say it’s unique to our firm, but what’s unique at our firm is the scale at which we do it and where some firms are doing it on a ad hoc basis, on an as needed basis.
You know, it’s really built into our pricing structure. We don’t charge extra for the business plan. Uh, therefore we’re doing no, you know, not a handful a year. We’re doing, you know, hundreds a year. Now, before I let Jason and Andrew Bombard you with an off the cuff question, they’re going to paint you into a corner. How can you establish, how can I listen to establish if a CPA can efficiently complete the planning for my new business? So what you want to do in that initial meeting is have them show you their planning process. You know, if they’re an efficient planner, they’re going to have templates that’ll show you what their formal plan will look like. You know, it won’t be calculated for yourself, but you’re going to get an idea of what things that they’re going to take into consideration and what things are going to help you plan for.
Whereas you know, if CPA just says, you know, they can, they can help you do a plan but they don’t have an example ready for you. It tells you that they don’t have a path towards that plan and it’s going to be either an inefficient and costly process or a process that’s probably not well thought out. Jason, you can now attack our good friend north of the border with a barrage of American questions. Those are tough American south of the border. Questions for our Canadian accountant friend, Mr Josh, what questions do you have for Mr Josh? So being a CPA, you manage multiple accounts on a daily basis, what would you find is your most efficient time management tool? My most efficient time management tool, to me it would be time blocking. You know, I’m a big proponent of time blocking. Um, you know, ultimately, you know, business owners, they get into business and they think that time blocks are going to be too restrictive for them.
And I tell them they have to look at that discipline of time blocking as their freedom. You know, if they can get a an efficient schedule. Once I get an efficient schedule, they have the freedom of knowing if they just follow that schedule, everything in their business will be taken care of because every item they need to do in their business is scheduled. Now Andrew, you have an opportunity to ask a trick question like Gotcha questions in a corner. You know, a lot of those political, some of the really good political people on CNN and Fox, they’re really good at asking the questions where no matter how the person answers, they appear to be mildly retarded. So you could ask that kind of question. He’s ready. He’s like a Ninja of accounting. So what question are you gonna ask Mr Josh sperl our Canadian accounting friend, right.
So, um, a lot of people who own businesses, um, look at accounting as like an, uh, a as like an event, just like a lawyer. They aren’t being proactive about it, you know, whenever they get sued then they get a lawyer. So, um, in what ways are you proactive and why should people get an accountant before tax season or before, like right when they need it? What are some of the, some of the ways that you’re proactive with your clients? So we have two types of, Ooh, that’s a good question. Andrew. We have two types of plans. So we have a financial plan and a business plan. Now, ultimately the business plan that we just went through, you know, business owners who have a business plan in place are 50% more likely to grow their revenue. But then backing up even further is the financial plan that we start with.
And when you get your tax return done, I tell business owners, you know, that’s kind of like your report card at that point. You know, the tests are already written, you’ve already done the work. There’s, there’s some things that we can do, but they’re more limited. There’s more things that we can do, especially with the Canadian taxation system at the beginning of the year, how we’re going to pay the owners. We have business owners, they come in and they have this, you know, trap, what’s the best time to hire an accountant, right? What’s the best time to switch to a new account? And I always tell them the best time to switch to a new accountant if you have an inefficient tax strategy was last month, the next best time is this month and the next best time after that is tomorrow. Um, because as you move throughout the year, month, a month, and efficient tax strategy, it just, it’s inefficient every month and there’s not as many things that we can do to back you out at the end of the year as we could at the beginning of the year if we had an opportunity to plan. All right. Well, on behalf of all the people south of the border, and then we just, what we thank you for bringing your, your northern knowledge down here, uh, to educate the thrive nation and, uh, the desferal nation, all the things they probably
don’t teach you about small business accounting in college. Josh, you’re a great Canadian and I appreciate you for lending us your, your mind. And if you stay here long enough, we will force you to become an American. Thanks. Bye. Take care.