Congratulations, your passion project is turning a profit! Your sales inquiries are the highest they’ve ever been, your bookings are steady, and your social media growth is on the climb. But what next? You already have a full-time job but you’re quickly learning all the steps it takes to run your own business.
You may be thinking, “this isn’t a business, it’s just something I do on the side” but in reality, if you’re providing goods or services for a chance of profit or loss, you are considered to be operating a business. With this new status comes responsibility. Here are our top 3 recommendations to ensure you’re making all the right moves while you continue to do what you love.
1. Consider Incorporating your Side Hustle
Now that you are officially running a business, it’s important to formalize it legally to secure its future. The way in which you decide how to structure your business, will determine how assets will be distributed and who owns them. Incorporating your business is one of the best ways you can protect your personal assets as you have legally separated yourself from your company. Once incorporated, the business is now under operation as a completely separate and distinct entity. The benefit? You can now create a new name for this separate entity that will have the ability to take out loans, sue and be sued, and enter into contracts on its own. Depending on your side hustle goals and whether you want to turn this into a full time job, incorporating your business is a great first step to setting your company up for success!
2. Get Proper Tax and Accounting Advice from a Chartered Professional Accountant
Having a side hustle generally means you have freedom to do things your own way. But that luxury isn’t the same when it comes to tax season. When your hobby turns into a business, you are officially establishing a new type of relationship with the CRA and the intimidation can be quite high as a new business owner. But with the right guidance from a Chartered Professional Accountant, they will audit-proof your business and walk you through everything you need to know on reporting income, source deductions, expenses, claiming assets, and more!
3. Obtain Legal Advice on Material Contracts
Once you start selling your services or products, even at the start-up phase of your business, it’s essential that you have well-drafted agreements and contracts in order to avoid future disputes or misunderstandings. Contracts such as leases, employment or consulting agreements, and non-disclosure agreements will be crossing your desk so it’s important to ensure you are protected in the best way possible. Similar to taxes, these contracts can be intimidating with legal jargon that you may never have seen before. This is where our team of Business and Employment Lawyers are here to help protect your interest and limit your liability.
So whether you are the Fraser Valley’s newest influencer working on multiple brand campaigns, a new mom selling hand knitted baby bonnets on Etsy, or a local freelancer, CBM Lawyers is here to guide you through growing your business and achieving your dreams! Contact us today to get started!