Small Business How-Tos

A small business is independently owned and operated with a small number of employees. Generally this means a business with less than 100 employees. Additional methods to decide if you own a small business include your annual sales and the value of your assets and your net profit: in accounting terms, your balance sheet. 

Starting up your own small business can be a very daunting process. There are several resources available to you such as small business associations, government institutions and grants. Research your type of business before going forward with any type of business plan. Be prepared to have a viable business plan in place in order to present your ideas to the financial institution of your choice. We have to realize that with any type of business, we must educate ourselves on the municipal business license office that will tell us what the regulations are for our district. This is a starting point. Presenting your financial institution with a viable business plan will enable them to help you out financially with start-up costs and expenses you will incur. You must register your business first before you can open a business account.

If you are renting out a space you will have to find out zoning requirements. If you are going to be working out of your home there are several other areas that you must consider. Tax laws and the proportionate amount of space that is solely used for business purposes. These guidelines are also available through your local city hall or city organizations geared towards small business.

If you register your business as a sole proprietorship or general partnership, this does not protect the name. If you wanted to protect your business name provincially and federally you could easily set it up as a corporation. Most Tax and Revenue offices can give you guidelines as to what type of business you should register for.

If you plan on operating a self-employed, non-incorporated business under your own name then there is no need to register the business with the registrar (Example: Sarah King). But, keep in mind that most banks require proof that your business is registered before opening a business account for you.

Small businesses can often face some issues. Most often small businesses fail because there was poor planning to start with. That is why it is vital to have a good business plan, one that has been researched and thought out. Opening a small business in hard economic times is also another issue that can cause a small business to go bankrupt. It is a good practice to plan ahead and have enough cash on hand to at least equal the projected revenue for the first year of business in addition to your expenses. For example, if you project your first year will bring revenue of $50,000 with start up expenses of $50,000, you should have no less that $100,00 available. Failure in researching these funds could mean the difference between bankruptcy and solvency. Education is a powerful thing, and knowing what could happen and being prepared for the unknown is just good business.