People often say, “Gee, you’re lucky to have your own business….you get to be your own boss…” Not necessarily so! I have many bosses: my clients! If you run your own business, then you know that running your own business is both very challenging and rewarding. Two such challenges are making good business decisions and getting the administration done right.

There’s no place like home...offices
I’ve also heard people say, “You’re so lucky to work from home!” Some days I agree, some not! Saving on commuting times is nice especially in bad weather. However, sometimes it would be nice to have the discipline and structure an outside office imposes.

If your business is run from a home office, make every effort to treat business hours as such. Set a schedule that suits you and your clients, and then try to stick to it at all costs. Resist the temptation to do personal errands and schedule household projects during working hours (“Dear, since you’re home anyway, can you deal with the furnace repair person?). It is exhausting to keep switching focus between work and personal chores—it stretches your business day across all your waking hours.

Also, ensure your prices include a fair charge for overhead. Many people fall into the trap of setting their prices too low because they aren’t renting office space. But, if you ever make the big move to lease office space, you can’t suddenly increase your prices simply because you’ve moved—your customers would probably take a dim view of that!

Claiming home-related expenses
As with all business expenses, keep good records of your home-related expenses: you may be entitled to deduct your home office from your income taxes. For example, if you use 200 square feet out of your 2,000 square foot home, you can claim 10% of home-related expenses, such as hydro, heat, mortgage interest and property taxes.

If your business is not profitable, you unfortunately can’t claim home-office expenses. However, the good news is that you can carry forward the expenses for five years for future use.

Finally, it’s important to not to be overly aggressive with the percentage you claim, as it’s important not to risk losing your principal residence deduction. Each family is entitled to claim one residence as its principal residence, which means that when you sell it, you aren’t taxed on the gains you make. This is one of the very few tax breaks Canadians have!

Accounting isn’t always evil
I was flattered to have been chosen by Women Can Do Anything as to be an advisor for the One Meeting Makeover program, as it helped me dispel the myth for one women entrepreneur that accounting isn’t always evil. Although bookkeeping does seem to be the bane of most business owners’ existences!

One of the key points I made during this meeting was that no business owner can ever make sound decisions about her business if she doesn’t know how she’s doing. You need to know the answers to questions like: What products should I specialize in selling? Which ones are the most profitable? How much do I really spend on marketing?

If you only whip records together for your pesky accountant around tax time, chances are you don’t have a good grasp on the financial health of your business and can’t answer these questions.

It’s not sufficient to compile them only annually; you need to track your progress on a regular basis throughout the year. If not, you will ultimately have a very difficult, if not impossible, time getting your business to that next level. To make proper business decisions, records should be updated at least monthly.

Stop trying to be a superwoman
Much of the reason that women don’t have time for updating records on a regular basis is that we sometimes feel we have to “do it all.” I have many women as clients, and I often find that many of them carry over that “over responsible” mind-set to running their businesses.

Both revenue and overall business growth will plateau much earlier if you insist on doing everything from answering phones to playing the IT specialist. Hence, it’s no wonder many women find it hard to find time to keep up on bookkeeping too!

If you don’t have enough time to commit to proper record keeping, then hire a bookkeeper or accountant to help you. Or, hire an assistant to at least get a key stream of the transactions in to your accounting system. Or, at an absolute minimum, have that assistant sort and organize your receipts, as this process can be the most time consuming.

Businesses will plateau, struggle or ultimately fail because of their owners’ difficulty in delegating tasks or relinquishing control. Please don’t be one of them!

The golden years
RRSPs are a great tax saver and income deferral opportunity—especially for women. Women typically live longer than men, and many women take a few years out of the paid workforce to rear children or care for elderly parents. These two factors conspire to create a serious issue for women to adequately fund for their retirement, because women may not have the same company pension plans or enough contributions to CPP as their male counterparts.

Even if funds are tight, just contribute even a little bit to an RRSP, provided you have sufficient room. Many people don’t realize that you don’t have to deduct your contributions in the same year you make them: you can deduct them down the road when your income is higher to get a better bang for your RRSP buck!

These are the main home office rules that any business woman should have working for her. One of the difficult parts of running a business is making good decisions and keeping the folks at the Canada Revenue Agency happy...or at least off our backs. With good record keeping and a sound accounting system, you’re well on your way to success in that area!