Part 3/5: How to start an online business (some tips from a former bookkeeper)

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Have you been following along with my 5 part series? If not, you can catch up on part 1 and 2. I hope the wheels are turning, and you are ready to get serious about starting an online business. I wanted to share some important things you need to think about. These are the things nobody talks about - these are the things not every business owner has figured out.

Four years ago I started my bookkeeping business, Balanced Bookkeeping. I was responsible for managing the financial side of multiple businesses in many different industries. This has allowed me to have a backstage pass not only to the four businesses Louis and I run, but to many other businesses as well.

Over the past year, I have been moving out of bookkeeping and into business coaching - because I am so passionate about helping entrepreneurs succeed in their business and I want to make sure aspiring entrepreneurs have all of the facts and realize the importance of bookkeeping.

Bookkeeping is something that often gets procrastinated, and the longer you’re in business before getting your books organized, the harder it becomes to get things organized and on track.

The first place to start, in my opinion is to open a business bank account and apply for a business credit card. This will help to keep your business income and expenses separate from your personal finances, so it is easier to track money coming in and out of the business.

You need to register your business - in Canada we have sole proprietorship, partnerships, corporations, etc. - you will need to determine the type of business you are going to start.

I won’t go too in depth with these because the requirements vary from province to province and if you’re not in Canada like I am, things will be a little bit different.

As a business coach this is something I walk all of my clients through to make sure that they are making the best decisions for their business and are compliment with the government (here in Canada we work with Canada Revenue Agency.)

Once you are registered you will need to look into sales tax requirements, again this varies by province and country. Here in Ontario we have HST which is a 13% sales tax.

When it comes to sales tax you are required to collect HST on all sales and you are eligible to claim HST spent on business expenses (again, I won’t get too in depth with this as it as the requirements and decisions will vary.)

Your sales tax remittance is your sales tax collected - sales tax spent

When you remit your sales tax you will also need to know your gross income. It’s important to note the difference between gross and net income. Gross is total sales and net is total sales - expenses.

It is SO SO SO important to know your numbers.

I recommend sitting down with an accountant or a bookkeeper in the early stages of your business, even if it is just a side hustle.

While I don’t provide bookkeeping to my business coaching clients, I do give them a full run down of what they need to keep track of, what they will need to provide to their bookkeeper and what they will need to keep track of if they choose to do their own books using a program like Quickbooks.

If you are starting a small side hustle you can definitely keep track of your expenses with a spreadsheet and ensure you have everything ready to go for year end to give to your accountant.

There are so many online programs that are inexpensive and easy to learn, it is definitely worth the investment and taking the time to learn how to do your own books if you’re not ready to invest in a bookkeeper.

Key points to remember:

• Keep ALL business related expense receipts in one place. Keep them in a file folder or an envelope. You will need to give these to your bookkeeper or enter them yourself if you’re doing your own books.

• Try to enter your expenses monthly into a spreadsheet or accounting program.

• Track your sales monthly.

• Balance your bank statement - all accounting software programs will do this as a monthly reconciliation to ensure your entries match your bank statement.

• You can also balance your business credit card statement.

You will definitely want to take what I am saying as friendly advice, and find a local bookkeeper who you can work with, or at the very least an accounting firm that you will give your year end documents to. They can help walk you through everything I mentioned.

Now you're ready for part 4 - how to attract dream clients on Instagram.