Mélanie from Pretty Paper Please is here today sharing her final installment on creating your own product line. In case you missed it, click here for her other posts: consignment vs. wholesale | approaching and the follow up | branding | creating a look book | line sheets + catalogues.
What I didn’t realize when I first imagined starting my own stationery line was the amount of time and work needed to create, produce and eventually market and sell my own pieces. And then there’s the business/financial side! If you’re like me – creative, but no real head for math – that part of running your own business can truly be scary! And if done wrong, could really get you into trouble!
A bookkeeper and/or an accountant can guide and help set you up with good working habits in terms of how to organize and separate all of your receipts. They’ll also help you understand which expenses and what percentages can be written off, as well as give you tips on how to save money month to month! In other words, hiring a business/number-minded person will help shape your business and force you to be responsible about your own finances. If your finances are in order, well, you’re on track for some real business growth.
I asked my bookkeeper if she could put together a list of things she’d encourage any new business to look into and these were her top recommendations:
Decide on whether you are going to Incorporate or be a Sole Proprietor
First understand what either classification means, then decide how either applies to your needs and what sort of business you see yourself being.
Register your business name with the Government
Every country has its own rules and process for Small Business, which is why it’s important to research your options wherever you happen to be. In Canada, you’re required to register your chosen business name (if its anything other than your own given name) with your Provincial Government.
Register your business number with the Government
In Canada, every business requires a business number. If you’re deemed a Small Supplier (your business is making less than $30K/year) you’re unlikely to need a GST number. Depending on which province you’re selling in, or the types of goods you’re selling you may also need to register for a PST number. Contact the Canada Revenue Agency (CRA) to understand where you fit in.
Find a good bookkeeper and tax accountant
Bookkeepers and/or accountants are a great source of information. Getting things set up and done correctly from the start will save you time and money in the long run.
Open a business bank account + Collect your business receipts
The idea here is to have a separate bank account for business transactions. Doing this will make your life easier when it comes to bookkeeping! There are countless items you can write off as a business expense, but it’s important to understand what those allowable purchases are. Always ensure to hold onto your receipts for your bookkeeping as well as for safekeeping. In the event you’re audited, having those receipts handy will save you from any additional stress.
Good luck! And happy making & selling!