I know this is a car related website however I actually do have a full time job. I am a Chef by trade. I wrote this article months ago and would like to share it will you.
Why I haven’t started my catering/food truck business
I have had a lot of people ask me and also suggest that I should start my own business. While to the naked eye starting a business might be easy, I assure there are a lot of things that even you might just not know about. Food truck or catering company it doesn’t matter really where I start, there are obstacles everywhere. Since either would be considered a home based business there is a lot of preparation and time needed for even just getting the business off the ground.
Here are 4 key areas that have stopped me from starting my business.
Starting a business in my home is fine and dandy but did you know about needing extra insurance? That’s right. I would be required to take out added insurance on my home. It’s not because I am running a food specific business out of my house but because I am running a business out of my home. The home would be considered my office where clients would come over for meetings, tastings, pick ups or any other form of business. Taking extra liability insurance out would be the smartest thing to do. In the event of an accident at my business, either me getting hurt or someone else, if I didn’t have enough insurance to cover the potential costs of the accident the costs to me could be extremely damaging which to even result in bankruptcy.
So you have extra home insurance, now you need extra car insurance. That’s right. Starting a home based business you would now need to license your vehicle as such and insure it accordingly. Don’t believe me go and ask people about Uber. The second your vehicle is used to transport something or someone for business purposes that insurance is needed. Odds are though you probably will never need it, in the event that you do though it would be best to just get it. If you don’t and something happens well, bankruptcy will be your new best friend.
By Laws and Zoning Laws
Oh yes good old By Law. Having already dealt with them I can assure you that there is no escaping them once they get involved. Unfortunately for many this is a real thing.
Zoning laws are no joke. Legalizing a home occupation has its challenges. With the possibility of needing to apply to amend the zoning by law to permit a business on my property the challenges are just starting. Now that’s not to say I couldn’t do it. The great thing about this is until someone complains I won’t get caught. However if someone does I am looking at fees starting around $500 to get the proper documentation to run my business out of my home and there is no guarantee that I will be successful.
The challenge with this is that the more and more people coming and going from my house the more people get suspect as to what I am doing. Doing my research and getting my ducks in a row first is the best practice for me here.
There are so many things you can’t do at your house it’s not even funny. When by-law pretty much told me that my house is just for LIVING IN, I felt kind of cheated. Technically I can’t even work on my car in my driveway and if someone calls by-law on me well I have to respect them.
So before you even think about running a business out of your home just give by-law an anonymous phone call and ask them your questions. It is better to be safe than sorry. Who knows maybe you will have no issues. For me I wasn’t so successful……….
I love the health board. They are here to help. However they have many things they look for when starting a home based business that deals with handling of food. The second I touch food in my house for my business I need to register it with the health board. That means them coming around as they please to make sure I am following all health board regulations. Just like a restaurant is treated is how I would be treated. That is fair. I bet what you don’t know is I would need to build a separate kitchen in my house. Yeah that’s right a whole new kitchen. Needing to stay within the regulations of the health board I would also require things like a 3 compartment sink, proper ventilation, separate entrance, washable surfaces all the good stuff.
I would also require all the training and food handling certifications out there. There are a few. I already have those so that is no big deal. For peace of mind though wouldn’t you like to know that the person handling your food knows how to? Cross contamination is a real thing, so is bacteria growth. What we do at home is definitely not what can be done in food related businesses and that is why these certifications are required.
Protecting yourself is key in this area. To do so, keeping detailed logs will assist you in the long run. Food temperature logs, fridge and freezer temperature logs, cooling logs, sanitization logs, food samples etc are just some of the documents you should have handy at any time. Cover your butt here. Bet you didn’t know about those now did you? That’s why you get certified!
Hide your business from the government and risk it all is the way I see it. Obviously the more you make the greater the risk, however paying taxes is unfortunately a necessity of life. Believe it or not there are positives to having a registered business. Having the ability to write off gas, hydro, water, mileage, equipment etc is great. However, paying all the necessary taxes such as cpp, ei, federal tax are just the tip of the iceberg.
If we follow simple math you will maybe understand it the way I see it.
So let’s take 30k as your income for Bi- weekly pay (26 weeks) as a small business owner
Bi Weekly Pay = $1153.00
Federal Tax Deductions = $90.18
Provincial Tax Deductions = $46.97
Total Deductions = $137.15
CPP Deductions = $50.41
EI Deductions = $21.68
So what does this all mean for you? Well here is how I break down why paying taxes is not only the smart thing to do but the right thing to do.
1) I am contributing to my overall CPP. Yes that is right, if I don’t register my business and don’t pay this necessary tax I am screwing myself in the future. While for now I might not be benefiting from it, it is not going to do me any good unless I am investing it religiously. When I retire I could see a very small Canadian Pension cheque every month if I chose not to pay into it from my small business. You have to take care of yourself for your future.
2)EI contribution. If I neglect contributing to this good luck going on unemployment if your business fails or if you decide to start a family or have a child. You may not even be qualified for any maternity leave with pay. That’s right don’t contribute EI earnings NO PAY. Paying that small amount has its benefits and they out way every other possible scenario. Unless, that’s right, you invest it religiously.
3) Total federal tax goes to helping my country. If I am not paying taxes I am not contributing to the country. Imagine that there are 500,000 self employed individuals in Canada only making 30k annually in a non registered non legal business. $1,782,950,000 is the total tax that is not going into helping Canada’s. Now one might not think that $30,000k is a lot however in the end the more people not operating a proper business the harder it is on everyone who are working for a proper business or running a proper business. It means higher taxes, higher contributions and higher costs around the board. I would only be hurting myself if I didn’t follow the simple request of registering my business.
While initially I would be running a deficit in my business the benefits in the future are great. Starting out will always be hard and you need to be willing to make those sacrifices now for a better future. While this may not seem like a logical reason to not start a business unfortunately for me it is. I cannot suffer the potential financial risk due to the many financial commitments I currently have. The only way around it would be starting my own business while still working full time. I don’t know about you but I don’t feel like working 90hr weeks again, do you?
So there you have it a small list as to why I won’t be starting my home based culinary business anytime soon. Please don’t take away from this all the bad things I may have pointed out. I would just like all of you to consider the same things that I had to consider if you are interested in become self employed.
It has taken me many hours and many weeks to gather all the necessary information on my business venture. Like I had stated somewhere in this blog get your ducks in a row first. Nothing is easy because if it was everyone would be doing it. This is just the beginning of the hurdles which I would be facing and by no means does that mean you would have the same ones.
I am not you and you are not me. This is a reflection my issues and should not have any reflection on yours. With great risk comes great reward also great failure can come of it as well.
I will leave you with this.
If I was a gambling man I wouldn’t count me out just yet.
* I am not a professional. Do not take this article as truth. This is only information and it should be used only as such.