Starting a freelance business is an exciting, yet overwhelming experience. Although running a successful freelancing business requires hard work, dedication and a vision, there are several other factors you have to consider. For example, the financial aspect of a freelance business can quickly become stressful, if you aren’t familiar with things such as paying sole proprietor taxes. The following five tips will help you get started on being your own boss.
Financing Your Business
There are several government programs available for Canadian freelancers and entrepreneurs that will help with financing your business. The requirements for qualification vary for each program. For example, loan programs are available through the Women’s Enterprise Initiative offices to assist women entrepreneurs. If you are considering a specialty business, such as technology, you may be eligible for start-up funding programs that are designed specifically for that purpose. Explore all of your options, including small business grants and/or loans, including:
- Personal loans
- Bank loans
- Grants and subsidies
- Canadian Angel investors
Register Your Business
Registering your business can be a complicated process. For example, you will need to determine if you need to register the business with the government or if you need a GST/HST registration number. In most situations, if you are operating an e-commerce business and your worldwide revenue is less than $30,000, you are considered a small supplier and do not have to register for GST/HST. It is sometimes helpful to talk with a tax lawyer to learn about your options regarding registering your business.
Hire an Accountant
One of the most important things about running your own freelance business is paying your taxes. If you start falling behind in paying the Canada Revenue Agency (CRA), it can be detrimental to your business, including the possibility of hiring a tax lawyer. A reliable accountant can help you stay on track with payments to the CRA as well as maintaining the records required for your business. If your freelancing business operates as an e-commerce business, your records are a must for verifying your tax obligations.
Marketing Your Business
If you aren’t careful, marketing can end up being one of the most expensive aspects of owning your own business. There are a variety of ways to advertise your business for little to no money. Social media is free and a great way to get the word out about your business. Create a website that highlights the best features of your business. Word of mouth is the best advertisement, so make sure you have plenty of testimonials on your website. Comment on blogs that are related to businesses similar to yours and include a back link to your website in your comment.
Be Mindful of Expenses
While in most situations, the old adage “you have to spend money to make money” is typically true, there are also some fine lines that you should not cross when it comes to expenses. Keep in mind that as a new business owner, you will most likely be putting out more money than the business is bringing in, so it is essential to only spend when you have to. For example, to cut costs, instead of buying all new office equipment, consider buying used items from a business buyout sale, online auctions or search the classifieds in a local newspaper.
One of the most valuable lessons you have to learn as a new business owner is that losing receipts can cost you money. Keep every receipt, regardless of how small the dollar amount is. Make sure your records are in perfect condition, up-to-date and easy to understand. Talk to a tax lawyer like Junkin Law Office and/or your accountant about what records to keep, how long to keep records for taxes or how to go about paying state and federal taxes.