Monthly Archives: December 2012

Should You be a Sole Proprietor or Incorporate Your Business?

agendaThe book, “Keep Your Sanity and Your Shirt“(Alberta Edition) written by Rita Fipke and Janet MacLeod is full of excellent advice if you are starting a  business in Alberta.

In this book, several examples were given of the benefits of being an incorporated business vs. being a sole proprietor. And you don’t have to have a big corporate image in order to be incorporated. In the author’s case, her company was made up of her and her spouse. And how to incorporate is explained in a way that is easy to understand, even for someone who doesn’t have a degree in business.

Personal tax rates are about 25% in Alberta. As for business rates, check out this chart that outlines the benefits of doing business in Alberta and makes a comparison between corporate tax rates in various provinces as well as some of the States.

One of the examples in the book, “Keep Your Sanity and Your Shirt” was of a consulting company that makes $200,000 year. Taxed as a sole proprietor, the personal income tax  could have been upwards of 55%. Whereas in this case, the owner earned nothing in actual wages from the company but instead received $40,000 in dividends. The remainder of the money stayed in the company and was applied towards business expenses, etc. This way, the owner only had to pay $1,000 in personal tax on the dividends they were paid.  The reason is that “anything claimed as dividends has already had the majority of the tax paid on it,” through the company.

Now, please bear in mind this is just an example and I am not an expert. I am just learning and sharing what I learn with you. So, of course, this raised the question for myself, should I incorporate? My initial intent was to be a sole proprietor and start a home-based business. But now I wonder whether it would be more beneficial to incorporate?

So, maybe it’s time to hire an accountant who can work out the details for me? And it’s a tax deductible business expense too!

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How do you Manage your On Line Presence?

Although many business owners realize the importance of maintaining their online presence and start out with good intentions, they may not be seeing the results they had hoped for.

This could be due to a few factors:

  • Lack of knowledge about how people will find them on the internet
    • Do they know what is search engine optimization (SEO)?
    • Do they realize that they need to link to their site from other sites and directories?
  • Lack of persistence in maintaining their on-line presence
    • Do they know that they may be losing customers through lack of maintenance? I know that if I go to a site that has outdated information or is obviously just slapped up there without any thought it makes me question the credibility of the company or product.
  • Lack of perceived value
    • Do they realize that if their website is handled correctly they could significantly increase their traffic and potential customer base?

Seattle-123Some entrepreneurs may think that all they need to do is put up a website and no further thought to their website is needed other than the occasional maintenance, if that. They may have paid hundreds of dollars for web design and hosting, but when they don’t see any results they may decide to resort to other traditional methods of face-to-face customer contact.

How often have you come across websites that are well-designed but with out-dated information about last year’s Christmas party still up? Or their last newsletter was from the spring of this year? And yet, how much more effective would their website be if they would only ensure that it continued to provide valuable and timely information to their customers.

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Success in Striving

There are millions of people out there who want to start a business or who have read and heard stories of others who have become overnight successes, whether it is by finding the next big thing, starting up an internet business, writing an e-book,  affiliate programming,  etc. There are many people out there who dream about becoming rich like all the other people they see around them with the big houses and fancy cars. If they can do it, why can’t I?

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Mark Twain wrote a short story called, “The $30,000 Bequest“. It’s somewhat lengthy but has a lot of value even today. It’s a story about a family that gets word that they will be inheriting money from a distant relative, $30,000. The story is about how they dream about this money and what they will do with it to such an extent that it starts to affect how

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