makeup/makeover home business

My wife does makeup/makeovers for large groups of people for weddings...etc

I would like to set this up as a sole prop. business from home. Income will not be very much to start but I would like to help her get the business up and running.

She also works full time.

just looking for some advice on what to watch our for.

appreciated.

Sounds like a great idea. Can't think of anything major to watch out for other than protecting your a$$ets!

Liability insurance in case somebody gets an adverse reaction to the products.

Customer service/customer response will be key - especially if she has a F/T job - must have voicemail, promptly answer calls etc

Advertising is expensive - start spending time researching economical ways to get the word out (like local business sites, chamber of commerce etc).

[QUOTE=Canucklehead]
Liability insurance in case somebody gets an adverse reaction to the products.
QUOTE]

Just to expand on this point a little bit more. Since you are setting it up as a sole pro. - the liability is not limited to the business but to your personal assets as well, something to look out for.

Other things I can think of - perhaps keep track of mileage of your car for business use if it is a significant chunk of total mileage. You will be able to claim some auto expenses off the income generated.

Here's a great link to the CRA website which describes business income and things you can deduct, including records to keep, etc.
http://www.cra-arc.gc.ca/E/pub/tg/t4002/t4002-e.html

Hope this helps.
G

Originally Posted by Canucklehead

Sounds like a great idea. Can't think of anything major to watch out for other than protecting your a$$ets!

Liability insurance in case somebody gets an adverse reaction to the products.

Customer service/customer response will be key - especially if she has a F/T job - must have voicemail, promptly answer calls etc

Advertising is expensive - start spending time researching economical ways to get the word out (like local business sites, chamber of commerce etc).

I dont mind incorporating to protect ourselves on the liability front - allthough if I remember correctly when I was contracting years ago the corporate taxes and corporation setup costs can be expensive - is this still the case ?

A website in which you can forward to potential clients can also help.

You can show the "Before" and "After" pictures. Include a small porfolio about yourself and the services you offer (i.e., makeup only or both hair and makeup). Show 'made up' pics in different settings (wedding, modelling, etc.. )

[QUOTE=G-Unit!!]

Originally Posted by Canucklehead

Liability insurance in case somebody gets an adverse reaction to the products.
QUOTE]

Just to expand on this point a little bit more. Since you are setting it up as a sole pro. - the liability is not limited to the business but to your personal assets as well, something to look out for.

Other things I can think of - perhaps keep track of mileage of your car for business use if it is a significant chunk of total mileage. You will be able to claim some auto expenses off the income generated.

Here's a great link to the CRA website which describes business income and things you can deduct, including records to keep, etc.
http://www.cra-arc.gc.ca/E/pub/tg/t4002/t4002-e.html

Hope this helps.
G

yes thanks - the fact that we can write off a protion of our expenses is a huge bonus. Would it be worth it to set up the business as a corporation ?

[QUOTE=blexann]

Originally Posted by G-Unit!!

yes thanks - the fact that we can write off a protion of our expenses is a huge bonus. Would it be worth it to set up the business as a corporation ?

I'm not really sure about the makeup/makeover industry. Do you think there are alot of risks involved?
For sure, incorporating is the most expensive of all options. First you have incorporate the company, then file yearly corporate tax returns.

I would suggest keep the structure as sole prop. then if the business takes off, then incorporate. An adv. of incorporating is indefinite deferral of earnings. Lets say you company makes alot of money, if you have it as a sole prop structure, that income is taxed right away at your personal rate, the highest being 46.4% (I believe). However, if incorporate, your company will qualify as a "Small Business Corp" for tax purposes if you incorporated and there are many advantages, one of which being a very low tax rate in the low 20% range. Keep your money in there until you retire and need it then take it out when your tax rate is lower (i.e. when your retire). This is very common among small businesses.

My 2 cents.

Incorporating a small business has a lot of advantages, but there are some drawbacks. This website has a pretty good guide to both sides.

http://strategis.ic.gc.ca/epic/inter.../cs01357e.html

I used to pay my accountant $1000 to do my corporate taxes years ago - can this be done cheaper ? I know some people that do their own corporate taxes - anyone have experience doing this ?

Some accountants will do your corporate taxes for under $1000. Depends on how complex your return will be, what other business you throw at them, and how hungry they are for more clients.

I had a guy quote me $4500 because he had a good client base and did not really need to expand. Next guy was $2000. I ended up finding someone who JUST got into the business after years of working for public companies. She charges about $750 but includes my personal taxes as well. Have not seen much lower.