7. Leverage Small Business Tax Incentives
If death and taxes are life’s only certainties, you might as well take advantage of certain government tax incentives. There are a number of tax deductions available to qualifying small businesses, such as home business tax deductions, reserve or contingent accounts deductions, apprenticeship job creation tax credits, hiring credits, and input tax credits.
There is also the Scientific Research and Experimental Development (SR&D, pronounced “SHRED” by all the cool kids) tax incentive program designed to encourage Canadian businesses to innovate and conduct research and development in Canada.
In BC, there is the Small Business Venture Capital Act (“SBVCA”). The SBVCA allows eligible businesses (you have to apply first) to issue 30% refundable tax credits to residents of BC who invest in their businesses by purchasing shares. There are many rules attached to these tax credits and it can be quite taxing to navigate the requirements of the SBVCA, but it can be an incredibly effective tool to encourage investors to write those fat cheques!
TIP: Get a good accountant (not just a bookkeeper) that has experience with small businesses and that can help you structure your financial affairs in the most efficient manner possible. Don’t pay more tax than you have to because you don’t want to spend money on an accountant; the savings will far outweigh the costs. Also, consult with your legal team regarding applications for SR&D credits and how to become an ‘Eligible Business Corporation’ under the SBVCA.
9. Comply with CASL
Canada’s Anti-Spam Legislation (“CASL”) came into force in 2014 in order to help keep Canadians from receiving unwanted and unsolicited commercial electronic messages (“CEMs”). Under CASL, companies can only send CEMs to potential customers or clients if they have obtained (and documented) their express or implied consent (no more spam blasts!).
Implied consent is inferred based on actions, such as having an existing business relationship (making a purchase or donation, for example). In order to maintain implied consent a contact must engage in a business action with you at least once every two years.
Express consent is obtained when you explicitly ask your potential contacts for permission to send them emails or other CEMs, and they agree. Once you obtain express consent, you have it forever (cue creepy laugh) or until the person opts out.
CASL also requires companies to clearly identify themselves in any email communications and include an easy unsubscribe mechanism. If a person makes a complaint and your business is investigated and found to have disregarded the provisions of CASL, the CRTC can assess steep fines (including fines on a per message basis!).
TIP: Make sure you understand your obligations under CASL, keep records of client interactions, and update databases and email lists so that you don’t inadvertently send a CEM to someone for whom you don’t have implied or express consent. Ensure that any CEMs you do send clearly state the purpose of the message and contain a simple unsubscribe mechanism. Again, this is an area where it is likely best to use a third-party solution to help keep you compliant (such as MailChimp or GetResponse).
10. Work with Great Advisors
As we’ve alluded to above, working with expert advisors early on will save you from serious headaches down the road.
If you can find a lawyer that you trust and who is willing to get to know your business, you can rely on them to provide you strategic advice about risks and opportunities as your business grows. Find a good corporate accountant (or ask your lawyer for a referral, we work with some awesome accountants!). Find a mentor in the business community if you can and see if they’ll let you pick their brain over a cup of coffee or a couple beers. The right advisors will clue you in to the things you don’t know, help you manage risks, and encourage your development along the way.
Moreover, your professional advisors (lawyers and accountants) will help to keep your businesses records in good shape and organized so you don’t lose track of key documents, or fail to keep your company in good standing. Having a professional handle your company’s books and records will give you peace of mind, and should the time come to sell your business, you won’t be scrambling to document decisions you made years back.
TIP: Give us a call! We love working with entrepreneurs who are working on innovative and impactful businesses. We can help you decide whether you need legal advice now or in the future, and can help you manage your legal budget (or create one) by providing you with an overview of what you’ll need and when, and how much it may cost. We can also provide you with insight into the markets and industries that you operate in, and the legal issues you’ll face. Additionally, we’re always happy to refer you to other advisors in our network to create a great team for you and your business.