Navigating through the various requirements and responsibilities of business ownership can feel like walking through a minefield for many entrepreneurs. There are many people, companies and government agencies that take an interest in the activities of a business. Activities in the form of the flow of money in and out of a business. As an example, you have the following stakeholders expressing an interest in your business:
- Customers / clients;
- The bank / finance company;
- The landlord;
- Employees; and
- The Government (last but certainly not least).
These stakeholders bring the following responsibilities to your table:
- Accounts receivables and sales;
- Accounts payables (expenses and capital purchases);
- Debt / current and future payment obligations;
- Payroll obligations;
- Financial Statements;
- Various tax obligations:
- Payroll taxes (CPP, EI, Income tax, WSIB and EHT);
- HST; and
- Income Taxes (Corporate and/or personal depending on the company structure).
The above list of stakeholders and responsibilities is by no means an exhaustive list, and it is enough to make anyone just want to throw their hands in the air (and wave them like they just don’t care).
To top it off most entrepreneurs enter business ownership without the knowledge of their responsibilities. They have a product or service that fills a void in the market place, and did not know what they were signing up for in its entirety.
The answer to the knowledge gap is always simple; obtain the knowledge.
The solution is simple once the knowledge gap has been identified. The entrepreneur however must come to the realization that the knowledge gap exists in the first place.
The best leaders surround themselves with people who make them better; often this means people who know what they don’t know. This practice will enable the entrepreneur to have insight into the things that they don’t know, that they didn’t know (read this sentence twice…LOL).
Surround yourself with the best and it will make you the best. In addition to recruiting the strongest people to fill the specific positions within your business, every business needs a great accountant and lawyer to guide the business away from the pitfalls that many businesses face.
Why repeat the mistakes of your peers?
Once the basic responsibilities are taken care of the business can look at how to compete and grow. The business owner must continuously look forward, beyond today to stay competitive. As an example, if you do not have current monthly financial statements you cannot have detailed plans that go forward 3 to 5 years.
You can work in your business, but true growth occurs when you work on your business! Leave time to work on your business, this is a choice you need to make. Working on your business will help you see and avoid the occasional minefield.
It is advisable to seek professional advice to understand the tax laws that impact your particular situation, and to guide you through the complexities of Canadian Income taxes.
AWFS Consulting Inc. offers professional tax, business advisory, and accounting services to clients. The company’s mission is to offer financial leadership and support to clients in this ever-changing economic environment by empowering clients with financial knowledge.