Starting a new business is exciting, and frightening, and expensive. There are some things to avoid in order to save a few dollars here and there. Don’t spend money before you make it. Just like in your personal life, list expenses and live within the budget constraints.
Office and Equipment – The expenses involved in leasing space, furniture, and equipment add up quickly. Purchase only what you need as inexpensively as possible. Work from your home until you have established yourself. Don’t invest in stationery. With a solid printer and some computer skills you can create your own logo and letterhead with no problem.
Employees – Don’t hire unless you must. There are a number of services, including online, that can supply you with freelancers at a pretty low cost. You will also be saving the headache of letting someone go when things don’t work out.
Software – Opt for the free versions of software or other subscriptions. When you come to a point that only paying the fee will get you what you need, shop wisely.
Marketing – Don’t purchase marketing lists or social media followers. Many are legitimate, but many are not. When money is an issue, don’t spend it if you can help it. That includes PR like hosting parties and branding services. Don’t think you need a whole new wardrobe. Clean and neat goes a long way. If you do feel it is necessary to purchase a business suit, shop at a quality store and try things on to see what will be the best choices, but tell them you are only on a preliminary expedition. Then buy at consignment stores or high-end thrift stores.
The good news is that in Canada there are a number of items that can be considered start-up costs and eligible for tax deductions. These costs must occur after the official start date. The start date is the day you have a significant activity that is a legitimate part of the attempt to make a profit. This can be your first sale, or it can be when you purchase inventory. If you had a computer or a copier prior to that time, that is not a legitimate expense since it was owned prior to the start date.
The Canada Revenue Agency (CRA) publishes a guide about what are legitimate business expenses and it is strongly suggested that you review this list carefully before starting out.
A good place to start is with a solid business plan. This is a road map of where you want to go and is necessary if you are planning to seek funding either through loans or investments. Do your homework and understand the market you are trying to enter. Know its values as well as pitfalls. Networking is a valuable tool to educate yourself and to spread the word about your business.
You may want to budget for professional consultation fees with an attorney and tax consultant. Very often these people will also be able to give you good advice about how to go about starting your business safely from the outset.
Careful spending and advance planning will help you become the successful entrepreneur you dream of becoming.
Contact your Accountants today click on this link —> https://capexcpa.com/contact
- The Capex Team