Most of the people follow examples when it comes to fashion, but there need to be some examples to be followed. Apparently, one of the most resounding names in terms of style icons have remained the Rat Pack group, a group that has taught everyone to dress up like gentlemen, but never give up to the classic way of having fun.One of the most resounding elements of the Rat Pack style is the bow tie, which is always undone, bringing a casual note to the outfit chosen. Also, you can go for a collar jacket and a fancy shirt, these going very well with a pair of nice denim jeans. Last but not least, you cannot be a fan of the Rat Pack style if you don’t have a Fedora in your closet. A Fedora hat seems to be performing miracles with some of the Hollywood actors who are very highly appreciated nowadays. One of the best examples would probably be Matthew Bomer in “White Collar”, his character, Neal Caffrey, being built exactly on the Rat Pack fashion style and being extremely successful.Although this style was implemented a long time ago, it has the advantage of being associated with a series of great personalities, such as Frank Sinatra or Joey Bishop. Humphrey Bogart was also a resounding name which adopted this fashion style, which brought him a lot of popularity among women everywhere and not only.Therefore, a large part of one’s success has to do with the way they dress up, so this is not something you can let go of and be shallow about. However, if you go for the Rat Pack style, you will definitely make your job a lot easier, your tastes being undoubtedly good from everyone’s point of view.
Every day, we meet with new small business owners. They always have the same questions about their businesses. This paper is to provide some simple answers to the most common questions.1. What can I claim as a business expense?Operating a business is similar to going on a safari to Africa. If I asked you “How much did the safari cost?” you would simply add up the receipts for the trip and tell me the cost. As a new small business owner, you are in an adventure of business. Any expense that you pay in order to be on your adventure can be claimed as a business expense.The most common and straight forward expenses are those of advertising, office supplies, professional fees, insurance, freight, postage, meals and bank fees. These are straight forward because they are typical business expenses and don’t require a lot of interpretation or calculation. You simply add up the receipts and you have the total expense.Other expenses such as office rent, automobile, and wages are all acceptable expenses but are usually a bit more complicated to determine. These areas have various rules that apply that all business owners should know early in their adventure.2. What do I need to retain to prove my business expenses?So going back to the example of the safari adventure in Africa, if you were asked to show that you actually were on the trip, you would probably pull out things like plane tickets, hotel bills and meal receipts. Anyone could see from the addresses on the bills, the dates and the descriptions that you were in Africa, you spent money and a general time frame for the trip. This would provide good evidence of your trip to Africa. The same principles hold true for your adventure in business.One thing that is hard to remember, even for seasoned business people, is to get the proper receipt for each and every business transaction. Many business people know the feeling of walking out of a restaurant or driving away from a gas pump and realizing that they didn’t get the receipt that they need. In that moment, the business owner has converted a business expense to a personal expense.The general rule of thumb in this area is that you need to get a receipt that shows the actual description of the items that were purchased. The receipt produced out of a debit or credit card processing machine that only shows the total amount in not going to cut it with a CRA auditor. Neither will the Visa or MasterCard statements showing a company name and an amount. In short, you need to get a receipt that shows the paper, pencils, gas or hamburger that was purchased to allow you to do your business.3. How does office rent work in a new business?While you are traveling around Africa, you are going to need to have a place back home to store your belongings while you are traveling. Some people might put this all in a storage unit and pay rent. Others will put their belongs into a friend’s house and pay rent. Others might simply lock the front door of their house and continue to pay the rent or mortgage payments. This location, though, will be where you return when the trip is finished.New business owners need this same type of space when they start their businesses. Most people will use some space in their homes. This space will usually be a den, converted bedroom or part of the basement. The Canadian tax system has a system to recognize the costs associated with this space.The very general rule is that you will be able to recognize a portion of your home expenses as office rent in your business. The first step is to calculate the total costs associated with your home. This should include the mortgage interest, rent, the condo fees, the home insurance, the utilities, property tax and maintenance costs. Once you have these numbers, you calculate the total amount of space used in the house for the business. This amount in then divided by the total space available in the house. The ending result is the percentage of home expenses that can be claimed as office rent. For most of the businesses we deal with, the percentage amount is usually 10 to 15%.4. How do automobile expenses work in a new business?Pretend that you decide to take your compact car to Africa on your safari. If you were asked “How much did you spend on auto expenses on your trip?” you would probably come up with a total for the gas, the repairs and the maintenance while the vehicle was physically in Africa. You wouldn’t add in the expenses of gas and repairs in Canada as these would not be costs associated with the Africa trip. Business auto expenses work in a similar manner to this.Automobile expenses are very complicated for business owners. We won’t try to explain all of it here. The important thing to remember is that you need to keep a lot of information in order to properly record the auto costs. You need to keep good records of how much you drive for business and how much you drive for personal. You also need to keep all of your gas and maintenance receipts. These receipts need to be the one from the gas pump or from the cashier. You cannot rely on your credit card statements to provide the evidence for these purchases. This then gives you the basic information that your accountant can use to calculate the auto expense for you.The next step in the calculation is to identify those expenses that are business expenses and those expenses that are personal expenses. This is similar to our Africa metaphor in that you need to figure out how much of the overall costs for the auto are for business only. This is done be determining the total kilometres driven for business and the total kilometres driven for pleasure. These numbers are then used to determine what percentage of the total automobile costs can be claimed for business.The other question that most new business owners ask is “What is a business trip”. This is fairly easy for a new business owner as most of them operate out of their home. Thus, a business trip is any time that you leave the house to deal with a business matter. This can include traveling to meet with clients, getting supplies, depositing money in the bank or traveling to other cities to attend conferences. The amount of the mileage is basically from the garage of the house to the parking stall at the destination and back.5. Do I need a business bank account for my new business?If we did do a trip to Africa, it would be easier and simpler if you had one bank account for the trip only. If there were any questions about what you spent on the trip, you could simply go to the bank account and get a lot of the details that you would need. This is similar to your adventure in business.Our suggestion is that you have a separate bank account that is used to record the deposits and the expenses for your business adventure. If you operate under a name other than your personal name, you will need a business account. This will probably require you to register a trade name at your provincial registry office. The separate bank account makes it much easier for your accountant to identify business only transactions. This ensures better accuracy.6. What is a business meal?On your African safari, you would include in your total costs all of the meals that you had while on the trip. You might also include those meals that you had before you left where you met with others to plan and organize the trip. You might also include a few meals after the African safari if they are a result of the trip. These might include meetings with a book publisher who is interested in your travel book or maybe meeting with an investor to review the results of the trip. In short, any of the meals that were required in order to plan or organize the trip can be claimed as an expense of the trip.Sometimes it appears as though some small business owners go into business to simply claim all of their meals. They claim every meal they have as business meals whether the meal is at a restaurant, at home or in a field with the family. This is not very prudent.So what can you claim as a business meal? Well, a business meal typically occurs in a restaurant. It usually involves two or more people although there is an exception. The reason for the meal is to allow the individuals involved to discuss topics related to the business. Typically, one person is trying to convince another person of a position or plan of action to follow to generate more sales.There are some business meals that don’t meet the description in the above paragraph but still qualify as a business meal. These are meals that business people have when they travel outside of their municipality or town. They are designed to compensate the traveling business person for the fact that they cannot eat at home and are forced to eat at restaurants.So like a trip to Africa, your adventure in business has a cost. In order to properly report these costs, you have to be able to split out the business costs from personal costs and report them properly. If you do this, you will then have the information that your accountant can use to properly report your small business income to the tax authorities.
There is a saying in the Home Based Business world (or at least a saying among my Home Based Business friends), and that is, “The great thing about the Home Based Business Industry is that anyone can do it. The worst thing about the Home Based Business Industry…….. is that anyone can do it.For the most part, starting a Home Based Business is fairly simple. Find a sponsor, sign up, and you are pretty much off and running. But the thing that most people don’t consider is what they shouldn’t be doing in regards to prospecting, training, and running your business in general.Don’t feel like you have to talk to everyone you come in contact with and try to sell your opportunity.Once people start a Home Based Business, they are incorrectly trained to go out, make a list of friends and family and call them constantly about joining the business. They are also taught to always be looking for an opportunity to bring up the business opportunity in conversations. Even if they are standing in line at the grocery store, find a way to start talking to the person behind you and look for a way to bring up the business. This outdated method is still taught today, and you will see tons of information telling you it’s an outdated method, but no one really explains why. Well don’t fret, I’m here to explain why.The reason it doesn’t work is because people are so inundated with advertising and sales pitches today, that we shut people or advertisements down in the blink of an eye these days. It’s almost like it’s human instinct now. I mean think about it for a second. How often do you fast forward through commercials on TV now that we have the ability to do so? How fast did you sign up for the do-not-call list as soon as it came out? We as a society hate being sold to. Even if it is something we might need, the minute someone tries to “sell” us something we most likely shut down and block them out. When you drive do you even notice the billboards anymore, or are they just a part of the landscape that doesn’t even enter your mind?So if it doesn’t work why are you taught this way? Well, it’s a really simple answer. Because it’s the easiest thing to teach and it’s easy to teach it to others. Home Based Businesses leaders teach this to their marketers because, quite frankly, they don’t know how to teach any other way. They give you a script, tell you to make a list of people you know, and give you a shot in the arm with an enthusiastic “Go get’em partner!”, and they hope that the numbers will work in your favor (here is a little secret, that rarely turns out well for the new marketer). And, when they are not getting any results, they tell the new marketer to try harder. Yeah, that’s helpful, try harder, keep calling the people that won’t even pick up the phone anymore when they see your number on caller ID, there is a good plan.They think it’s to difficult to teach new people a different way, a better way of marketing their opportunity. So they give you some watered down, out of date system that will leave you frustrated and broke. Well there is a better way, there is a more effective way, and I will talk more about that in the next section.Do not sponsor everyone that wants to get involved!!!Huh???Yeah, you read that right. I mean you could sponsor everyone that wants to start a business. In fact if you love to be annoyed, bothered 24/7, frustrated, defeated and depressed, by all means have at it. Remember this line from earlier?”The great thing about the Home Based Business Industry is that anyone can do it. The worst thing about the Home Based Business Industry…….. is that anyone can do it.Let’s get down to brass tacks. Not everyone is meant to start, own and run a business. Plain and simple. Might not be a nice thing to say, but it is a true thing to say. A Home Based Business owner, or any business owner for that matter has to have a certain type of desire and mindset. Now I’m not saying they have to be smarter than the average bear, not the case at all, but they do have to have a specific mindset. They have to understand that there is work involved, and that growing a business takes time and energy, and it takes dedication. You can’t just expect to succeed by taking the easy route.That being said, you as a Team Leader have the responsibility, I will even say an obligation, to yourself and to the person / people you sponsor, to make sure that they “get it”, and understand what it takes to become successful in this competitive industry. You have to make sure that they understand that, even though you are there to always help them and work as a team, that they will eventually have to work independently after they are trained. Now I’m not saying train them for 5 hours and send them out on their own, no no no, that is what the old school teachers do. I’m saying that you work together as a team, get the person trained, help them until they are comfortable, but this has to happen within reason. It shouldn’t take 5 years. I would say it should only take a month or two of regular training and close teamwork. Let me tell you something. There is nothing worse than a person that calls you 24 times a day with dumb questions, complaints, and whines constantly. This will drain you emotionally, physically and just destroy your morale. You will be miserable and in turn the person you sponsored will be miserable and broke too. Believe me, I went through it, and I promised myself that I would never go through that again. I would rather have three reps. on my team, that get the business model, have the attitude to succeed, and can work as a team as well as independently, and not be constantly dependent and need to have their hand held every step of the way, than to have 100 people that are just gonna drain me emotionally. IT”S JUST NOT WORTH IT!So when talking to others and they show interest in becoming a business partner of yours, make sure they have the qualities it takes to run, own and grow a business. It’s not hard to figure out if they “get it” or not. Most people can figure out if a person has “it” or not. And if they don’t have the qualities, then just politely tell them that this might not be the best option for them and move on. It amazes me how many Home Based Business owners are so afraid to say no to people. If you are so worried about sponsoring people that you will sponsor a person who will make you miserable, I might suggest that you look into another type of work, because you will have a long painful road ahead of you.Do not educate yourself constantly.So we have discussed how many companies train you the easy, watered down, ineffective way. They teach a system that is easily duplicatable to everyone, but is hardly effective for anyone. Now, it’s not the companies fault mind you, they have to find the easiest way to get people started, but again for the person that “gets it” this will not be enough, because, well, you want to succeed, and the people that don’t “get it” won’t go past the basic training the company provides, and they will fail and quit because they won’t understand what we are about to discuss. But again, you won’t have to worry about people on your team quitting because, as we figured out earlier, you only sponsor people with the right qualifications, RIGHT?:)You need to constantly add tools to your business tool box. There are some great programs out there to help you take you business to another level. It amazes me how new Home Based Business owners will invest in starting a new business and then not invest in their business education. Does a doctor graduate medical school and never educates themselves any further? Does a real estate agent consistently study the real estate market and it’s trends? Well the Home Based Business owner has to do the same thing. They need to plug in and study what the leaders of the industry are doing. They need to keep up on the trends and they need to invest in their education. I personally require my new business partners to purchase some of my favorite educational tools because I know it will help them in the long run, and if they don’t, they will not become a part of my team. I mean if you are not willing to invest in your education and training, how much success do you think you will have? Not much.Be impatient.Rome wasn’t built in a day and your Home Based Business won’t be either. It is not a “get rich overnight” thing, nothing is. People that tell you that are lying to you, plain and simple, and they do not have your best interest in mind. It takes time to build and grow a business, and you need to be ready to put the work in. How long does it take? Well there are so many factors it varies person to person, but on average I will say 1-2 years to really start making a substantial income. Is that to long for you? Well then you are not made for this business. Any professional knows that this is the general rule of thumb for any business in any industry. If you don’t have the patience to wait that long, you might want to just work for someone and and not start your own business. You also need to sustain yourself while you are building. As i mentioned earlier, if you are going to invest into starting a business you need to also invest in your education. Now I’m not talking about thousands of dollars in educational tools and trainings but there does have to be some money invested nonetheless, but the money that is invested into your education will pay you back 100 times the cost in the long run. You also need working capital for advertising, marketing and the general running of your business, again, no different that any other type of business, but remember these costs are significantly lower that most types of business, but they are things you need to be aware of if you want to own a successful Home Based Business.By recognizing these things and and not falling into the traps that a majority of Home Based Business owners fall into, you will be setting the foundation for a successful, fun, and profitable business.