Blog

How is the Economy Affecting Your Home Based Business

Home based business

It isn’t just the big conglomerates that are affected by the economy, although these are the companies that always make the headlines as to how they are faring.   For the little guy at home who has started a home based business, the economy most certainly has some effect on them, but they may not have realized this or prepared for it when starting their small business.

There is the concern for the dropping oil prices but to many small home based businesses this may not have a direct effect on them.   Although it will depend on their line of business and the clients they serve.

What may have more of an impact is the drop in the Canadian dollar. Where this is more likely to have an effect is on the purchases the business owner has to make.   It has become common place for many small businesses to shop online.   This is mostly for convenience.

Many times the purchases are related to the administrative needs of the business.    If the business owner is interested in buying software then chances are they are going to be charged in US dollars.   This is where it is going to have an effect on them.   They either have to take the time to find a Canadian supplier where they can get the same product but pay for it in Canadian dollars.  Often however, there may be no Canadian supplier so there are no options here.   The other step that can be taken is to shop around for a better US price, or watch for promotions or sales on the product.

A new business owner that is just going to start a business has to take the time to do their homework.   Often they get so caught up in the viability of the product or service being so good that they feel that it will be untouched by the economy, As such it will have no detrimental effects on the business.

What they have to consider is if the product or service is classed as a necessity or a nice to have item.   Consumers will start their purchasing cut backs on products and services that are not considered as essential to them first.   This is where the home business owner can potentially suffer.   The state of the economy should always be considered not only for the here and now as the business is about to be launched, but for the future as well.   It is good to adopt a “what if” plan in this case.

Share Your Thoughts!

Contact

Sam Seidman, CPA, CA, LPA
629 Sheppard Avenue West
Toronto, Ontario
M3H 2S3

Telephone: (416) 398-1700
Fax: (416) 398-6226

Chartered Professional Accountant, Chartered Accountant, Licensed Public Accountant

Email: sam@torontoaccountant.ca

Contact Sam today

The information provided here and throughout the site of TorontoAccountant.CA is intended for general tax information only, and should not be misconstrued as a legal source of information regarding your tax situation, or be used for any other purposes other than for general information.
Sam Seidman, Chartered Accountant - Copyright ©2013. All Rights Reserved.