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Edmonton CPA | What Entrepreneurs Should Know When Starting A Business
With such a high failure rate for businesses in Canada, Edmonton CPA says that entrepreneurs who are starting a business for the first time, they should be aware of the reasons why businesses typically fail so that they can be prepared to overcome those problems from the very beginning. A great way to tackle this problem head-on as soon as possible is to have a consultation with a chartered professional accountant, so entrepreneurs know what first steps to take in order to set their business up properly, and avoid those typical business problems.
Many entrepreneurs know it is important to speak to an Edmonton CPA before they open their business, but it is often taking other first steps in an effort to save money. For example, entrepreneurs think that it may be saving money as well as time if they incorporate their business before talking to an accountant. The reason why this is not a good idea, is because within the articles of incorporation, contain the tax structure for their business. If they incorporate before talking to an accountant and figuring out what the most efficient tax structure for their business should be, business owners may inadvertently create a corporation that has them paying much higher taxes then they should be. Entrepreneurs should not create their corporation before speaking to an accountant, because accountants will be able to figure out the backstop tax structure and help them incorporate in such a way to have a paying the minimal amount of taxes possible.
Another reason why entrepreneurs should talk to Edmonton CPA before other steps is often entrepreneurs set up their bank accounts for their insurance for the company before speaking to a CPA. However, if they determine that they need to set up a corporation, those bank accounts and insurance accounts be set up in the wrong name. This means that business owners either have to take additional time to switch the names on the accounts, for counsel them and start again. While this is not going to cost them a lot of money, it is wasting time, that business owner should not need to worry about if they had talked to an accountant in the first place.
By talking to an accountant first, they will be able to figure out if they should incorporate, but the best tax structure should be, and creating a business plan. This business plan will help them figure out their first steps in business ownership, and figuring out important details like does the business make economical sense, it will you to create a business plan and ensure the financial readiness of it. The business plan will help entrepreneurs think of all the small details that are going to mean a lot such as base points of their products, and how to find customers and grow their business. Statistics show that entrepreneurs that have a plan in place in their business will be 50% more likely to grow their revenue. That is a great reason for entrepreneurs to start their business right by talking to a chartered professional accountant.
There are so many things that entrepreneurs need to do in order to set a business, that they often get overwhelmed and have the idea with their first steps should say Edmonton CPA. However, a great place for any entrepreneur to start, is talking to a chartered professional accountant. With most accountants, there initial consultation is free, so it does not even need to cost entrepreneurs any money in order for them to get professional advice on what their very first steps should be. By being armed with knowledge, entrepreneurs can ensure that they are setting their business up for success as early as possible. Since 50% of all entrepreneurs fail within the first five years, it is extremely important that business owners are starting out on the right foot as soon as possible.
One of the most important things that entrepreneurs can do to set their business up correctly, is set up the corporate structure of their business properly. Most entrepreneurs find that incorporating is the right decision for them, and ensuring that they have the right tax structure built directly into the articles of incorporation is key to helping them save the maximum amount of taxes possible. And Edmonton CPA will be able to help an entrepreneur figure out what the most efficient tax structure for their business is by finding out who all of the business owners are, what all of their personal circumstances are so that they can create a tax plan that makes the most sense. Once they do that, they will be able to help an entrepreneur incorporate so that an efficient tax plan is directly in their corporation.
Some of the reasons why entrepreneurs would choose to incorporate their business are not just for tax benefits, but entrepreneurs that operate a corporation are sheltering themselves from the ability to be suit. By incorporating, there limiting their personal liability in business. This does not mean they cannot get sued ever, but their corporation will shoulder most of the liability. If an entrepreneur has personal assets including and especially their family house where there children and spouse live, they may want to seriously consider incorporating in order to protect their assets and where they live.
The other reasons why entrepreneurs who may choose to incorporate, is because they should save in taxes. If business owners are operating a proprietorship, they can pay up to a maximum of 48% in tax rates. However entrepreneurs that have a corporation will pay a small business tax of only 11%. Saving 37% in taxes is a really powerful reason for entrepreneurs to incorporate.
By talking to in Edmonton CPA as their first step, entrepreneurs can get all of the answers on if they should incorporate, how to incorporate and then their next steps to business ownership after that.