Congratulations! You have decided to become a business owner. You have figured out what problems you are solving, whose problems you are solving, how much income you need to earn, how your solution is different from other solutions to his problem and how much it will cost you to start the business (see previous post for more on these key business decisions). What’s next?
1. Decide what form your business will take. A business in Alberta can be set up as a sole proprietor, partnership, corporation or co-operative.
2. Decide on a business name. Consider how the name will be perceived and how easy it will be for customers to pronounce or remember. Also consider whether another business is already using the name you choose. If your name is the same or too similar to an existing business you could end up being taken to court and have to change your name or pay damages.
3. Register your business. A sole proprietor operating under his/her own name does not need to register a business. If this is you, proceed to step 4.
If you operate under a name other than your own name you must register your trade name (contact an Alberta Registries office).
If you have employees you must register a payroll account with CRA (online or by phone).
While you don’t have to register for GST until you exceed $30,000 of taxable sales in a year, you may want to register for GST as you start your business so that you can claim input tax credits on all of your startup costs.
If you are incorporating your business it is a good idea to speak with an accountant and a lawyer to ensure it is setup in a legal and tax efficient manner.
Are you unsure if you should incorporate your business or run it as a sole proprietor? My next post will address this question.
4. Start serving your community. Yes, there are other things you could do (open a bank account, print business cards, write a formal business plan, create a website, etc.) but the list is truly endless and all of these activities cost money. Consider proving the value of your business by earning some money before you find more ways to spend it. You are a problem solver so go and help the people around you.
Dave Pasman, CPA, CA is the Founder of Destination Accounting Professional Corporation, an accounting firm that exists to help businesses and individuals avoid surprises and reach their goals. Dave is a graduate of the CPA In-Depth Tax Program and has worked with over 300 businesses in Manitoba and Alberta over the past 11 years in the accounting profession.