All Canadian orders ship FREE! US orders free over $35 USD

tips for launching your own handmade business (part two!)

In part one of this blog post, we talked about choosing what to make and sell, the important of checking out your competition, and how to craft your brand.

Now, in part two I'll provide a bit more advice about the nitty gritty of starting a business. I am providing this advice based on my own experience as a Canadian small business owner, but I am by no means an expert! If you are looking for specific financial or legal advice, I recommend contacting a lawyer or accountant in your area.

What is sole proprietorship?


First off - let's get some of the boring stuff out of the way. A sole proprietorship is a type of business structure, and it means it is owned and operated by one person. If you are an artist looking to make a living through your work, then launching as a sole proprietorship is a great (but not your only) option. 

 

What important information should I know about being a sole proprietor?

As a sole proprietor, you report your business income on your personal income tax return. You'll need to calculate your total revenue from your business and include it as part of your personal income.

You can deduct legitimate business expenses from your business income to reduce your taxable income. This includes expenses directly related to running your business, such as materials, marketing, and any rent or utilities you pay for the space where you run your business. 

Depending on how much money you make with your business, you may need to register for the Goods and Services Tax (GST) or Harmonized Sales Tax (HST) and collect and remit these taxes. In Canada, there are some important guidelines for when to register for these. This was something I learned the hard way! I live in Ontario, and the rule is that if you do not exceed a $30K CAD threshold over four consecutive calendar quarters it means you are a small supplier and you do not have to register for an HST account. Once you reach that threshold though, you must register for an account and you must continue to collect and remit HST annually (or until you close your business/account). That means even if you have a year where you don't make any sales or collect HST you still need to file "nil" or none. 

I strongly recommend reading the guidelines in your province on the Government of Canada website. Once you're ready to register for an HST account, the process is fairly easy to do. You can find more information here. There is also a guide on how to file your HST here.

 

tax time tips

  • One of the first thing I did as a small business owner was hire a reputable accountant to ensure that I understood income tax filing requirements and deadlines, HST requirements, and how to claim business expenses. I strongly recommend taking this route if you are unsure about the financial side of running a small business. 

 

  • Accurate record keeping is very important! Even if you hire a professional  you will need to understand your finances and provide documentation come tax time. I use a Google Sheet template to track my expenses as they come up so that I'm not scrambling to dig up this information. I also have a filing box for my important receipts. These simple tools help keep me organized and make it easy to keep an eye on my business health throughout the year. 

Laisser un commentaire

Veuillez noter que les commentaires doivent être approuvés avant d'être publiés