Starting a new business is exciting but still takes careful planning. Some of the things to consider are whether your business idea is viable, whether you can secure financing, and whether you possess the qualities for running the operation, like self-motivation and time management, risk acceptance or aversion, and a proper support system available.
The CRA has specific criteria to define an independent contractor over an employee. These include:
• You determine how or when the work is performed. An employee is directed to work sites.
• You own and maintain your own tools. An employee uses the tools provided by the hirer.
• Financial risk including securing and completing contracts. An employee gets paid regardless.
Understanding the finances is important. You will need to know how much money is necessary to start and then continue running the business until a profit is shown. You will need to know whether you need to invest funds in purchasing or leasing tools or equipment. Much of this depends on your personal financial reserves and credit history.
Have a Business Plan
Start with a business plan. Do not skip this step. It will be necessary to present to financial institutions and is a good road map for your progress. This will include the basics like name, date, etc. You need to have a specific summary of the business including mission and vision statements, detailed product or service descriptions, and background of skills or abilities to support the plan. You will also need a solid marketing plan. As you can tell, all of this is to show that you have carefully and thoroughly thought out all of the aspects of your proposed business.
You will need to decide on a business structure, i.e. sole proprietorship, partnership, or incorporation. Along with this, you will need to decide if you will do business in a single or multiple provinces or federally. You will need to name and register the business and apply for all appropriate licenses and permits. Along with this will be the necessary insurance and safety requirements.
Set up a business banking account and bookkeeping records. If you will need help, decide whether it will be through employees or independent contractors.
Understand the nuances of your field. It may mean that you pre-qualify as a supplier to be part of a database where you can get more contracts or jobs. In addition, you will need to find resources to tap for referrals and contract opportunities. You may be required to submit a proposal or bids to get the job. If you are not good at numbers or verbiage, you may want to find a good resource.
Speaking of resources, one of the best choices is to start by contacting an accounting firm. Especially one that deals with small businesses and start-ups. They have the experience and expertise to talk you through all of the steps necessary to get running and on the right foot. It is also likely that they will have additional tips and tactics that will stand you in good stead. They can also be a gateway to financiers to underwrite your enterprise.
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