Home Based Business: Let's talk Money part 1

Published on
July 11, 2021
Time to read: 
5
minutes
A fan of Monopoly money with a pair of dice and 3 tokens, a racecar, a dog and a ship. This image was selected because it's fun and represents money and business.
I'm grateful to Suzy Hazelwood for sharing this image in Pexels. For more information go to https://www.pexels.com/@suzyhazelwood

Running a business out of your home can be appealing for a number of reasons. As more people start contemplating the benefits of creating their own career by becoming entrepreneurs, it’s likely that they’ll have a few questions.

One of the things that people don’t like to talk, think or write about is money!

I’ve been an entrepreneur since the fall of 2012, the first few months were all about figuring out what I wanted to do, and setting up conditions for success. This included a few financial matters.

Over the years I’ve picked up a few more strategies and tactics shared by colleagues, family and government funded resources to help entrepreneurs thrive.

This blog covers two money related topics: Incorporation and Business Insurance. There are also links to free resources (from many sources) that you can explore at your own pace.

Incorporation: Yes, No or Maybe?

One of the first money related matters to sort out with your business, is how to structure it. Are you going to be a sole-proprietor, form a partnership, or incorporate?

There are benefits to all 3 models. I chose to incorporate my business because I started late, and wanted to protect our family’s assets, the money invested in our home, my military pension and my RRSPs.

If I had known how low risk my business actually was, I would have waited, and run it as a sole proprietor for the first few years. That way I could have written off several of my start up costs, on my personal taxes.

My accountant tried to get me to do that, but I can be pretty stubborn, I insisted on incorporating. He did persuade me to incorporate in Ontario instead of in Canada, saving a lot of paperwork especially come tax time. As my accountant explained it, unless I planned on setting up shop in other provinces, I didn’t need to incorporate outside of the province I lived and worked in.

Be very careful if you’re going to start a business partnership. Invest in getting separate legal advice. Too many friendships and families go through tough times when they realize that they made a bad decision by starting a business together. Formalize your partnership in writing, and have it witnessed.

To learn more about whether or not it’s time to incorporate your business, I recommend a one-hour video from the WE CAN Project at Queens University “Is Incorporation Right for You?” 

Business Insurance

It’s worth looking into additional insurance for your business. If something happens to your home, and all your products are damaged, will your home insurance cover that loss? If not, consider requesting a change to your home insurance, or purchasing business insurance.

If your business is in a service-related industry, check your professional association for insurance discounts and/or talk to a few Insurance brokers.

Once I started my business, I began researching insurance. My husband had a 5-year head start on me as a business owner, I’d heard him speaking about how expensive insurance was. He’s an HVAC Refrigeration mechanic by trade, and his business is classified as being part of the construction industry. 

My business is all in my head, and in my home office, it’s about knowledge, which is a very different matter when it comes to insurance.

My insurance rates are about a tenth of what my husband pays and I get a really good rate because I’m a member in good standing with the Human Resources Professional Association (HRPA). The Insurance broker I spoke to explained that my business insurance was so low because it’s almost unheard of for a Human Resources consultant to get sued!

Remember when I wrote about incorporating earlier than I needed to? I learned how low risk my business was about a month after it was incorporated. Once you’re incorporated, it’s a real pain to stop. Lots of paperwork!

Bonus Tip: Find a few trusted resource people, like a lawyer, bookkeeper, accountant and insurance broker when you start thinking about setting up your business. Paying up front for professional help can save you lots of financial heartache later on. Leverage your network to find the resource people that can help you!

Free Resources

When I started learning how to be an entrepreneur, I accessed free resources to figure out how to set conditions for success for my business.

I'm still learning new things, and I am grateful that many programs share their knowledge freely with their target audiences. Here’s a partial list of resources you may find useful, with a note about the geographic regions each covers.

All Entrepreneurs

  • Business Development Bank of Canada (BDC) - Canada
  • Chambers of Commerce – Canada (if your current organization or your professional association is a member you can attend Chamber events at member rates) Many of the annual Small Business Week events (October) are free
  • Your local business development corporation – Bay of Quinte region
  • Your local small business centre - Bay of Quinte region

Women and non-binary Entrepreneurs


​Why did I suddenly decide to write about money and home-based businesses? Well, all the marketing mavens I follow and learn from recommend showing your value by providing useful information to potential clients for free.

And, I just joined the PARO team as a Business Growth Advisor (BGA), which means that my company will get paid for me to do something I love: helping people learn how to start and grow a business. Best part, this makes my services much more accessible to those with a small budget, because PARO client’s access BGA’s for free!

In an upcoming blog, “Home Based Business: Let's talk Money part 2.” I’ll be covering the topics of Bank Accounts, Cash Flow and Overhead.