“Your Money” on CTV Morning Live
Check out this week’s CTV Morning Live Your Money segment. Tune in as Coast Capital Savings’ financial gurus provide simple financial help on issues that matter to you.
January 26, 2016 – When does your hobby become a small business and what does that mean for your banking needs
Are you wondering if it’s time to turn your sock knitting hobby into a business? Here are some financial points to consider:
- Before you quit your day job and start knitting socks full time, you first must perform all the due diligence one should before starting any kind of venture.
- Research the market for what you want to sell to see if there’s sufficient demand for your product, so you avoid common mistakes that entrepreneurs make. Write a business plan complete with income and expense projections.
- Consider keeping your day job for the first year at least, so you’re not dependent on the sock income. Continuing to work for a paycheque to some extent could help you “sock” away some savings.
- If you expect to make any profit, then Revenue Canada considers your hobby as a business and that means different tax requirements. You will need to fill out more paperwork and maybe even have to collect and remit GST.
- Look at a credit union for your banking needs because the Canadian Federation of Independent Businesses reported in 2013 that Canada’s credit unions outperform the banks in almost every category, in their survey of 1300 small business owners across the country.
- That means if your fledgling business needs a loan to get off the ground, you’re more likely to get one from a credit union. Business owners reported feeling more valued by credit unions and getting more out of that relationship than they did with the banks.
Looking for more helpful information? Check out past segments