Edmonton CPA | First Steps To Starting A Business
When entrepreneurs have decided to start their own business, the level of excitement they have should not keep them from taking their first steps says Edmonton CPA. However, knowing what those first steps are is extremely important to helping entrepreneurs set their business up for success from the very beginning. By talking to a chartered professional accountant, business owners can understand what they need to do to start their business off on the right foot in order to increase their chances of succeeding.
While many entrepreneurs believe that all businesses must be incorporated, there are business structures that entrepreneurs can operate that do not involve incorporating. However, before an entrepreneur makes the decision if they should own a corporation or proprietorship, they should be talking to an Edmonton CPA. The reason why is because there are several advantages to owning a corporation, and entrepreneurs should get all of the facts about what it is like to own both, and once they have made their decision, the chartered professional accountant is going to help them set their business up for success regardless of its structure.
One of the biggest reasons that entrepreneurs decide to incorporate instead of owning a proprietorship is in order to minimize their tax payments. If an entrepreneur owns a proprietorship, all of their business activity and the money that they make gets reported on their personal tax return. How much money they make in their business each year will determine if that is a good idea or not. Since the highest personal tax rate in Alberta is currently 48%, and the average Canadian pays 43% in personal taxes, the more money a business owner makes, the higher their taxes are going to be if they keep it on their personal tax return. A good rule of them that many chartered professional accountants use, is at once a business owner makes over fifty thousand dollars a year in their business, operating a proprietorship no longer makes sense purely in the tax department.
Another reason why businesses may choose to operate a corporation instead of a proprietorship is because by owning a corporation, they limit the amount of liability they face, allowing their corporation to shoulder much of that risk. Business owners with a proprietorship are at a higher risk for being sued personally, which means their personal assets including their house could be at risk. Edmonton CPA says if entrepreneurs have a lot of personal assets, they may choose to incorporate simply to protect those assets including and especially their family house.
After discussing all of the various options between proprietorship and incorporation, if it still make sense for an entrepreneur to operate a proprietorship, it still makes sense to ensure that the chartered professional accountant can help them navigate business ownership. There still business questions such as do they need a GST number? How are they going to track expenses, and what is their business plan in order to set themselves up for success?
if entrepreneurs do not put enough thought process into what they need to do first when starting their own business says Edmonton CPA, they could find themselves having to undo things that were set up incorrectly from the beginning, but ultimately, setting their business up correctly means that they should be getting advice from the very beginning, that often includes consulting the experts.
One of the best places to start is talking to a chartered professional accountant for an entrepreneur takes any steps towards business ownership. Edmonton CPA says while some accountants do have ann hourly charge even for initial consultations, most do not. Therefore, it is not going to cost an entrepreneur anything in order to get the information they need to set their business up correctly from the beginning. It is an extremely important meeting, so business owners should ensure that they are getting all their questions answered, and finding out the best way to start this journey in order to set themselves up for success from the beginning.
When entrepreneurs are brand-new there are certain things they should be looking for in a chartered professional accountant to make sure that there hiring the best fit for them and their business. Edmonton CPA says one of the first things that an entrepreneur should look for when hiring an accountant for their new business, is to find one who has public practice experience. The reason this is so important, is because entrepreneurs need to hire an accountant who has experience with other entrepreneurs. Accountants that do not have a practice experience are called industry accountants, and they typically only have experience in one large company. The type of advice that they would have and be able to offer small businesses is extremely different from an accountant who has experience giving advice to many small businesses. There is a different mindset, and while industry accountants are extremely knowledgeable at what they do, in order for a small business to be set up correctly and have an accountant that can understand them, they should look the one who has experience giving advice to small businesses.
Another thing that entrepreneurs should look for when hiring a chartered professional accountant according to Edmonton CPA, is to look for accountants that do more than just a year ends and tax returns. The reason why, is because it is usually not enough of a benefit for entrepreneurs to only have your ends done. Because there is a 50% failure rate of entrepreneurs in Canada, finding a chartered professional accountants who is knowledgeable in the planning side, can help entrepreneurs avoid the three most common reasons why small businesses end up failing in five years.
Finding the right Edmonton CPA to work with, business owners can start to their business off on the right foot, getting the right advice from the very beginning. By starting correctly, business owners can increase their odds of succeeding, and beat the odds of the 50% of entrepreneurs fail in business within the first five years.