Tuesday, October 30, 2007

Vehicle Lease for Small Businesses

We're realizing that it might make more sense to get a second vehicle now that my consulting gig is going to take me to various places in the city throughout the year. I began looking into what the benefits were for having a lease and what can be written off.

If you're going to be using a vehicle partially for work and partially for personal use, then you can only claim use for work purposes. However, at this site (http://www.cra-arc.gc.ca/tax/individuals/topics/income-tax/return/completing/deductions/lines206-236/229/motor/menu-e.html) I found an interesting statement:

"Employment use of a motor vehicle
If you use a motor vehicle for both employment and personal use, you can deduct only the percentage of expenses related to earning income. To support the amount you can deduct, keep a record of both the total kilometres you drove and the kilometres you drove to earn employment income. We consider driving back and forth between home and work as personal use." (emphasis mine)

So...let me get this straight: you can use a vehicle you use to "earn employment income", but driving between home and work doesn't fall into that category?! So if you're a consultant, and you're assigned to be on-site to a client, that is technically driving to home and work...isn't it?

I'll need to look at this a little more closely...


Monday, October 22, 2007

The Importance of Treating Customers Well...and Small Business Liability Insurance

I learned recently that there are some insurance providers (like Wawaneesa) that have products designed for the small business owner. Unfortunately it sounds like there's not alot in the base plan that would cover error and ommission insurance, but the referred broker I spoke with didn't expand on what options were available, nor was he someone that I decided I wanted to provide my business to.

In any service based industry, there's one common outlook that we as service providers must remember: our customer more than likely has no idea how to do what we do, and therefore our job is to help educate them as well as provide them with our services.

Answering questions like "What options are available with the policy?" with "Well, whatever you want" doesn't really help me.

I also asked this broker what was covered under liability. "Let's say you walk into my place...and you screw up...you're covered."

Hmm...ok, so as a software developer if I walk in and there's a dispute about what was supposed to be included in the software, is that covered? "No...I'm not on the hook for that."

Well, then obviously using the term "...and you screw up..." isn't quite clear enough is it?

I'm not going to mention the brokers name here, but let's take this as a lesson: educate the people who are coming to you for help, and don't assume that they understand the service or products you provide...they just know that you're someone that has the knowledge and can help them.