SECTION 3
STRUCTURING YOUR BUSINESS

 “Life is too complicated not to be orderly.” - Martha Stewart

Planning and structuring your business is important for many different reasons. It is an essential part of ensuring that your business is complying with government regulations. Structuring your business will also help you manage your operation more efficiently, ensures that your business remains viable and will, hopefully, provide you with an income for your retirement years.

Basic business structure involves:

1. COMPANY ORGANIZATION

In Ontario, there are three different ways to organize a business. It is best to talk to an accountant and a lawyer to determine on the right type of business organization for you. The three types of business organizations are as follows:

2. PROFESSIONAL SERVICES

As a business person, you will need to use the services of business professionals from time to time. Professionals can help you with your initial business purchase or help you create a new business. They can guide you through long term planning and budgeting and they can maximize your everyday business operations.

There will be times when you will require the services of a professional but, in the long run, the more familiar that you are with the legalities of running a business, the more you can do on your own.

The following lists the types of professionals and the services that they provide:

Professionals usually charge by the hour or by the job. Make sure that you set a fixed fee in advance and plan a maximum price for the work before it starts.

To find a suitable professional, one that knows the tourism business, talk to other people in the industry, friends, or your tourism association. There are plenty of professional firms in business so make sure that you trust and are comfortable with the people that you do hire.

3. KEEPING BUSINESS RECORDS AND TAX PLANNING

Maintaining proper and complete accounting records is your legal responsibility under the Income Tax Act. Your operation’s books and records may be audited at any time by federal and provincial agencies. For more details on how to set up proper records go to the Financial Management section.

Developing a tax plan requires that you organize your business so that you minimize the taxes that you pay. There are two kinds of tax that you will have to pay - business and personal tax. The amount of taxes that you pay will vary depending on how your business is organized. It is imperative that you seek professional help with both your business organization and your tax planning. Each operation and each personal situation is unique and requires a unique setup to best suit your personal requirements.

4. RETIREMENT PLANNING

Retirement planning should begin at the same time that you set up and go into business. Discuss retirement planning with your accountant and financial advisor as part of your business plan. Saving for retirement should be an on going process. Some of the more traditional ways of saving and planning are as follows:

Retirement planning is a complicated process. Make sure that you talk to your accountant to determine what is best for you and your particular situation.

 
 

Related Content

Does your business require a JHSC?, from The Outfitter, by Jim Antler, July/Aug 2000

Never Too Late For Succession Planning, from The Outfitter, by Francis Roy, June 1992

 
 

References:

The Outfitter’s Manual. NOTO. Circa 1985.

Lodging Operator’s Manual. BC Motels Campgrounds Resort Association. 1997.

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