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E-Myth – “Why most small businesses don’t work & what to do about it”

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Edmonton CPA | Would Business Startups Need To Know

Entrepreneurs often do not know what they do not know when it comes to starting a business for the very first time says Edmonton CPA. While there is no absolute correct way to start their own business, there are some things that entrepreneurs should know in order to maximize their chances of succeeding, and sitting their business up correctly so that they are increasing their chances of success.

Entrepreneurs should consider talking to an accountant as their first step towards business ownership. The reason for that is because accountants will be able to help entrepreneurs figure out things like what tax structure they should go with if they should incorporate or operate a proprietorship, and help them figure out the financial readiness of their business in order to help them avoid common reasons why entrepreneurs fail.

Entrepreneurs should understand what might happen if they decide to go ahead and incorporate on their own. Edmonton CPA says entrepreneurs sometimes do this because they think that they can save money, or save time by going directly to registries and incorporating their business. However, entrepreneurs should understand that the way their business taxes are handled actually needs to be written directly into the articles of incorporation. If they set up their corporation before figuring out there tax structure, they could end up having a corporation that does not allow them to handle their taxes efficiently.

Entrepreneurs often think that speaking to their lawyer is a great place for them to start as well. And while talking to lawyers are never a bad idea, good lawyers are going to tell their clients to go talk to and Edmonton CPA before talking to them. The reason why that is important is because the accountant will be able to talk to the entrepreneur and figure out what they need to know in order to create the best tax plan for them. The figure out all of the shareholders, what to each of their personal circumstances are, as well as what the plans for the business will be in order to figure out what their tax plan should be. Once an accountant has figured that out, then they can give that plan to an entrepreneurís lawyer who can then write it into the articles of incorporation. However, Edmonton and CPA says that accountants will also be able to help entrepreneurs incorporate, so businesses can save the fee and get everything done with their chartered professional accountants.

Once entrepreneurs know the best place to start in order to set their business up correctly, they can ensure that they are creating a company that has an efficient tax structure, so that they can avoid paying more taxes then they absolutely need to. Since many entrepreneurs are driven to become is is owners because they want to maximize the efficiencies of their tax payments, therefore starting their business off with an efficient tax plan is extremely good business sense says Edmonton CPA.

Entrepreneurs often do not know the best place that they should start when they have decided to start their first business says Edmonton CPA. They often think that they should incorporate first, or create bank accounts in order to save time and money, however before they do any of that, they should speak to a business professional so that they can figure out what business structure they should have first. But talking to chartered professional accountants, this is owners can hear what all of the different business structures there are, and the differences between all of them so that they can operate the best company for their circumstances.

The first thing that entrepreneurs should know is that there are two business structures that they can operate. There is a corporation and a proprietorship. Business owners do not have to incorporate in order to own a business, and a proprietorship does not cost any money to set up ahead of time. Instead of having shareholders, all of the business finances from a proprietorship gets run through the personal taxes of the entrepreneur. This is often beneficial when entrepreneurs are not making a lot of money yet, or if they are not doing this as their main business. However, there are some risks associated with owning a proprietorship. The biggest one says Edmonton CPA is that entrepreneurs are at personal risk operating a proprietorship. Which means they have all of the liability if they end up getting sued. This means that all of their personal assets could be at risk if they do get sued for any reason. Entrepreneurs that have lots of assets, or a family home may want to incorporate so that they can limit their personal liability.

Entrepreneurs should also consider tax rates when deciding between a corporation and a proprietorship. The highest personal tax rate in Alberta is currently 48%, and the average Canadian pays 43% of their income in taxes. Small businesses on the other hand only pay 11%. However, Edmonton and CPA says that in order to get that 11% tax rate, businesses need to incorporate. However, business owners need to understand that there is a cost to incorporating, plus they must reports monthly which has a fee to it, and there corporate year ends will cost more money. Therefore, entrepreneurs should keep in mind that it may cost more money to incorporate until there making over fifty thousand dollars per year. However, business owners should continue to keep in mind that the benefits of incorporating are often worth the additional payments that they make. Therefore, business owners should consider very seriously which business structure is going to be the most beneficial for them.

after talking to an Edmonton CPA about what business structure is best for them, regardless of which structure they choose, an accountant is going to be able to help entrepreneurs figure out tax planning, as well as business planning. So it does not matter which business structure an entrepreneur has decided on, they should still talk to chartered professional accountant after they have decided.