Archive of ‘Business Basics’ category

Quick – did you reconcile your bank account this month?

| Bookkeeping, Business, Business Basics, Small Business

Quick - did you reconcile your bank account this month?

Before I jump into the nitty-gritty of bank reconciliation, I want to tell you that it’s helpful to think of reconciling your bank account like a game.

Your goal is to make sure all of the transactions that happened in your bank account are also shown in your bookkeeping software, like Xero or WaveApps.

In short, you want everything to match, or balance, like your bookkeeper or accountant might say.


Because expenses and income that don’t show up can’t be claimed, or in other words, can’t be used for deductions.

That would throw off your taxes and potentially force you to pay for more than you owe. Not okay.

To avoid this, we reconcile our bank accounts. We make sure that no transaction falls through the cracks. And if something does? We become the Sherlock Holmes of bank transactions. (I know, cheesy. I couldn’t help myself.)

If everything is connected — your bank account, PayPal, Etsy, invoice software, and bookkeeping software — why might a transaction not show up? Good question.

Here are a few common reasons that your bank balance might not match your bookkeeping software records.

Common Reasons for Inaccurate Bookkeeping Records

1. Tech isn’t perfect, so sometimes transactions don’t show up when your banking website is down.

2. You’re getting double transactions from Etsy.

3. You’re getting double transactions from PayPal.

4. You’re getting double transactions from the deposit from your invoice and the invoice software.

Now, if you haven’t been reconciling your bank account, what are you supposed to do now?

First thing’s first: every software has a different way of reconciling a bank account.

In WaveApps, for example, it’s called Verify. In Xero, it’s called “reconciling” and you simply push a button that says “OK”.

I recommend doing this reconciliation process once a month to keep your books up to date and organized. If you wait any longer, you risk losing track of receipt or forgetting what a specific expense was. You’ll also have a better chance of getting paid sooner if you’re able to catch what invoices are still outstanding.

If you’re not sure what to do to keep your bookkeeping organized on a regular basis, I recommend downloading this FREE checklist: Weekly Bookkeeping Checklist for Bosses. It’s perfect for the DIY business owner who wants to keep her business healthy and make the most of her money. Click here to download it.

All of the above, though, might make sense in theory, but I’m sure you’re still wondering how you actually do it.

That’s why, in the next couple of posts, I’m going to show you step-by-step tutorials of how to reconcile your bank accounts using Xero and WaveApps. 🙂

Have questions for now or want me to do a tutorial using your bookkeeping software? Leave them in the comments below!

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3 Money Reports Smart Entrepreneurs Need to Read Every Month

| Bookkeeping, Business Basics, Finances, Small Business

3 Money Reports Smart Entrepreneurs Need to Read Every Month

You’re finally using a cloud-based bookkeeping software to keep track of your money. While it’s added a lot of ease to your system, it might also be confusing to figure out what you need to pay attention to within the software.

And more importantly, what can you use to help you make financial decisions that help instead of hurt your business?

There are three reports that I think every smart entrepreneur needs to read on a monthly basis.

If you’re allergic to numbers, don’t worry! I’ll make sure you understand what’s most important on each of these reports so you’re only focusing on what matters.

3 Financial Reports to Read Monthly

1) Income Report (Profit and Loss)

Basically, this report gives you an overview of how profitable your business is based on what you’ve earned and what you’ve spent. It represents a period of time, unlike a balance sheet, which shows a specific point in time.

The lines you’ll see on an income report in WaveApps, for example, are:

  • Revenue – How much money came into your business and from what sources
  • Cost of Goods Sold – If you manufacture products, this could be manufacturing costs and labor. If you’re an online business, this is usually merchant fees.
  • Gross Profit (aka Margin) – This is what’s left over after your the cost of your goods sold.
  • Operating Expenses – This is all of your other expenses, like admin, software, travel, etc.
  • Net Profit – How much your business made after expenses

2) Sales tax report

First, in Canada, this is important for businesses that make over $30,000 in a single quarter or within a year, whichever comes first.

Second, sales tax shouldn’t be confused with income tax. It’s like how the tax is included in the price when you buy gas.

The point, though, is that as a small business owner, you are now responsible to give back, or remit, the tax charged on your sales to the government.

This report helps you understand what you owe.

3) Balance Sheet (aka Statement of Financial Position)

This statement answers these two questions:

  • How much does my company OWN?
  • How much does my company OWE?

In short, it gives you a more detailed view into how your business is doing financially at one point in time. It’s typically reviewed at the end of a month, quarter, or year. Or all three. 🙂

On the report, you’ll see:

  • Assets (aka debits) – Value that your company owns, e.g. cash, inventory, etc.
  • Liabilities (aka credits) – What your company owes to others, e.g. mortgage, credit card debt, payment for assets
  • Shareholder equity – Net worth of your company, which is what’s left over after all your debts have been paid

Bonus: Trial Balance Report

This is a bonus since it’s mostly used by bookkeepers and accountants. A trial balance statement gives the current account balance in your bookkeeping, which is used for creating financial reports at the end of the year.

Before we had computers, you’d have to create this first before checking any other reports.

Now, however, it’s primarily used for double checking if your computer program has calculated everything properly.

Its purpose? It makes it easy to see all of your account balances for a specific date. It also helps when switching from one accounting program to another because when starting a new program, you need to enter all the correct balances of each account on the date you switch over.

Your financial reports are only as accurate as your books are organized, so if you’re behind on inputting data or categorizing transactions, your numbers won’t be telling you the truth. If you need help getting your books in order, especially before the busy tax season arrives, click here to get in touch with me. 🙂

Have a question? Leave it in the comments below!

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How She Invests: An Interview with Lisa Savage

| Business Basics, Interviews, Small Business

With all of the options online these days for training programs and tools, it can be difficult to discern which is best for your business. That’s why I created the How She Invests in Her Business series. My hope is that the insights you read from these smart & savvy women help you decide how to make smarter financial decisions so you can stay in business for a looooong time. To kick it off, I thought it would be fun to start with myself. In the following interviews, you’ll hear opinions from other entrepreneurs like Becca Tracey, Halley Gray, and Adrienne Dorison. Happy reading!


What investment has made the most impact on your business? What was the impact it made?

I took a bookkeeping business course because I knew the skill of bookkeeping really well but didn’t know how to run a bookkeeping business. The course helped me create and place healthy boundaries between me and my clients. It also helped me become organized with scheduling client work.

What’s one investment you’re thinking of making right now?

I want to take a course in payroll because it’s the last course to receive a designation from the Knowledge Bureau in Alberta. This is the place where bookkeepers can go and learn new skills.  

Before you decide to invest in something for your business, what do you do?

With the example above, I’ve been waiting a long time. But typically, I consider three things: my cash flow, my expenses, and future income. I’m a saver. I save my money, and now that I think about it, I’ve saved enough to go take that course.

What has been your experience with hiring your first team member / contractor?

When I hired my first contractor, I knew there were other people who could do my marketing better than I could. However, to be honest, I didn’t do what I tell other entrepreneurs to do. I went over my budget because I really wanted to have someone who knew what they were doing.

Actually, I ended up working harder to cover that extra expense, but it ended up working out in the end.

What position, if any, are you planning on hiring next? (CPA, bookkeeper, graphic designer, etc.) Why?

If I were to hire someone next, it would be a “partner relationship,” like another bookkeeper or an accountant. That way, I could handle more clients and offer a more streamlined service.


Who do you think your monthly bookkeeping service is a good investment for? Why?

It’s good for the entrepreneur who doesn’t want to manage their books but wants to know the important details of what’s happening financially in their business. Typically, they’re within their first year and have just passed the 30k minimum. That’s where I come in. I help them get organized and take tasks like entering data off of their plates. The only thing I want them to be concerned about is how much money they’re making.

How do you use what you teach in your own business / life?

When I first started my bookkeeping business, I learned a lot. I went through a lot of experiences where I had to invest in myself because I made mistakes with clients or hiring.

That’s why I want to help other entrepreneurs be smarter with their money and spend wisely.  

I teach my clients how to be organized with their bookkeeping, and that comes from being really organized myself. Finally, I teach my kids to save their money first, and they’ve learned to pay for things they really want on their own.


How do you give back to your in-person community?

I volunteer at my children’s school for events. And I play the flute at school with the kids, too.

Now that school has ended, I volunteered to join an adult band of amateur musicians that plays at various community events.

In what other ways would you like to give back?

There was a time where I was a volunteer tax preparer for the Centre de Benevoles of Cowansville. That’s one activity I would want to do again. However, I’m a part of the knitting group there, and I’m making shawls for one of the retirement homes in town.  


I hang out on the social channels below. If you join my email list, you’ll get access to my free library of bookkeeping resources for the small business owner. Come say hi 🙂 







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Why Entrepreneurs Should Stop Using Spreadsheets for Bookkeeping

| Bookkeeping, Business Basics, Small Business

Why Entrepreneurs Should Stop Using Spreadsheets for Bookkeeping

If you’re still using a spreadsheet for your business’ bookkeeping, we need to have a heart to heart.

I’m guessing that if you’re still using them, it’s either because:

A) You don’t know other options.

B) You can’t choose between the other options.

But here’s the problem. When you use a spreadsheet, bookkeeping has a tendency to take over the important stuff that keeps your business running, like bringing in new sources of revenue or marketing.

Here’s what I believe: bookkeeping should NOT take over your business tasks.

I know this isn’t news to you. Your spreadsheet has been clunky, constantly out of date, and often difficult for you to understand.

And when you don’t understand what you’re seeing, making smart financial decisions becomes a whole lot more difficult and making realistic goals feels impossible.

So what should you do instead?

That’s why the next best move for your business is to choose and sign up for a cloud-based accounting software.

I know that sounds kind of intimidating. But really, depending on which one you choose, the transition can be smooth, and you’re going to LOVE all the time you save.

Let me make the difference between a spreadsheet and online accounting software clearer by talking about something we all love: food.

When you cut a carrot, you can use a knife and cut one slice at a time. It will take a bit of time (especially if you AREN’T Gordon Ramsey).

Or your other option is to invest in a food processor, which will cut your carrot into little pieces in seconds.

The food processor is like your accounting tools, it gets the job done faster and more efficiently. Plus, you were probably able to chop more carrots in the same amount of time.

Remember, no software is perfect

As a bookkeeper, I see accounting software in a different light, and I read a lot of comments that look something like this, “I hate XYZ software. It’s so confusing and so hard to use. I want to find a new one. Any suggestions?”

I want to make sure you know that no software is perfect and that many of the suggestions I give are going to be made for accountants and bookkeepers, so they take the time to learn. What’s most important is that you choose one that fits the size of your business and the type of work you do.

Also, any cloud-based software you choose is going to be a step up from the standard spreadsheet-style bookkeeping.

I know that making the decision to move from spreadsheet to online can feel like a lot of work, so I’m going to go over my favorite accounting tools that help me and my clients with bookkeeping tasks.

These are:

  • Xero
  • Zoho Books
  • WaveApps
  • Freshbooks
  • Kashoo

These tools will help you streamline your business when it comes to sending invoices, accepting payments, tracking income and expenses, and managing your cashflow among so many other benefits.

We’ll talk about who each software is most suited for, the cost, benefits, and disadvantages.

Each requires a different process for making the move from a spreadsheet (or paper and pen) to online bookkeeping, and I love them because they all have a fantastic library of resources and responsive customer service. So, no matter which you choose, they’ll take care of you. 🙂

If you have questions you definitely want me to address or a specific software that you’ve been thinking about, leave me a comment below so I can make sure to cover it.



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Why You Need to Know the Difference Between Sales Tax & Income Tax

| Business, Business Basics, Small Business, Taxes

Why You Need to Know the Difference Between Sales Tax and Income Tax

As tax season approaches, I bet your list of questions has been growing. How much am I going to owe the government? What deductions can I take advantage of? WHY IS THERE SO MUCH TO DO?

I hear you. But let’s take it back a few steps because there are some things to know when it comes to taxes.

First, there are two major kinds to know about: sales and income. What are the differences between them, and why do you have to know them?

Before I jump into the nitty-gritty of what they are, knowing the difference between these two can help you make much better decisions for your business. That way, you charge enough for your products and services and you’re not surprised when tax time rolls around, forcing you to charge your credit cards to cover what you haven’t saved.

For the most part, this advice applies to Canada, but there are some resources for the United States. Okay, enough chatter. Let’s talk taxes.

What to Know About Sales Tax

Sales tax is the tax associated with goods and services.

For example, tax added to groceries, all of your candles and jewelry from online shops like Etsy and Ebay, or services like getting the plumbing fixed. We pay extra for almost every purchase we make every day.

For most people, that’s where it ends.

However, once you begin a business, you’re also responsible for charging Sales tax and giving it back to the government. That’s why I mentioned in the post about how much to pay yourself that not all the money you receive in business is your money.

If you make over $30,000/year in Canada, then you must charge %5 GST (goods & services tax).  

Depending on your province, either PST (provincial sales tax) or HST (harmonized sales tax). I know, lots of acronyms. Stick with me here.

I live in Quebec, so I charge %5 GST and %9.975 PST.

You can check if your province has harmonized sales rates by clicking here.

If you live in the United States, check out this resource from the Tax Foundation.

What about digital products?

Because the number of people doing business online is expanding so quickly, many countries around the world are still catching up and haven’t created tax laws for digital goods yet.

If you sell digital products in Canada, then digital products are subject to tax and follow the same rules as if you were selling a tangible product. You can learn more about that here.

In the US, it depends on your state. For example, a state like Nevada considers digital goods tax-exempt while a state like Colorado considers the products taxable. Take a look at this list to check your state.

What to Know About Income Tax

Income tax is based on your total gross sales for the year, which are the sales before your expenses.

We pay those at the end of the year, and they’re determined by percentages set out by the government. Find your tax rate by clicking here.

In an employee situation, those income taxes are deducted right off your paycheck. You don’t really have to worry about it.

In your business, though, you are once again responsible for paying those taxes. (II know, it’s the price we pay for being able to work in pajamas and eat out of the Nutella jar whenever we feel like it.)

If you don’t pay it, the government will start charging you interest the day after taxes are due (April 30). That’s not a situation you want to find yourself in, so plan ahead.

If you operate a business in Canada, you can estimate how much taxes you will be owed here: Simple Tax Calculator

If you operate a business in the US, you can use this calculator: Self-Employment Tax Calculator

Now, here’s the most important piece of advice I can give you in this article.

Once you have an estimate, start saving portions of your income every month. That way you’ll be prepared at tax time. I recommend opening a separate bank account just for taxes. You can read more about that here: 3 Must-Have Financial Pieces to Run Your Online Business

If you want ideas on how to reduce your tax owing, check out the tax guide by signing up for the free bookkeeping resources library.

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How Much Should You Pay Yourself?

| Business, Business Basics, Small Business, Tutorial

How Much Should You Pay Yourself?

How much should you pay yourself?

So many entrepreneurs falter here and end up paying themselves less thinking that it’s better for the business or that they’re being greedy by taking too much.

The truth is that too many entrepreneurs are underpaying themselves. Here’s what I mean. If you’re paying yourself $2,000 a month and you really should be paying yourself $3000, you’re missing out on $12,000 a year. That’s a couple family vacations or a significant amount of savings!

Business owners are way over-complicating this. Here’s how you can think about this.

Paying yourself is not all that different from getting paid by an employer. When you get your paycheck, you distribute your income between bills, food, fun, and savings if there’s anything left over.

The main difference when you own a business? You have to pay your own taxes.

I know it’s tough to part with your hard-earned cash, so the first mindset shift I want you to take is that not all of your hard-earned cash belongs to you.

I know, I know. I don’t like it either. I’m only here to help guide you along.

Formula: How to Pay Yourself

To make this easy, I have a formula you can use to figure out how much to pay yourself. (If you want, you can download the worksheet I have for free here in my resource library.)

Take this example: You’re making $10,000 per month (congrats!).

In Canada, that means your marginal tax rate is %26. (You can reference this list for tax rates in America.) So, I would distribute income like this:

  • %1 profit – $100
  • %23 expenses – $2300
  • %26 tax – $2600
  • %50 payroll – $5000

To keep things organized, each of the lines above should have their own bank accounts. My favorite is (If you open an account before April 30, 2017 with a minimum of $100, you’ll earn $50. Just use my Orange Key {16898465S1}. Yay for free money!)

Why did I write 1% towards profit?

Mike Michalowicz, author of the book Profit First, explains this best. He says, and I’m paraphrasing, that we’ve learned to pay ourselves first — before bills — so we can relate that lesson to the profit we earn in our businesses.

He says that most businesses don’t make a profit, but this percentage system ensure one because you’re taking your profit out before paying bills and payroll. By following this system, you always have a profit at the end of the year, which you’ll clearly see when you close your books.

While 50% towards payroll may seem very generous, it’s reasonable if you compare it to an average wage of middle-income earners in the US.

Then you’re looking at between 2,000 – 3,000 take home pay each month. If you have contractors. you’ll be looking at another 1,000 – 2,000 in expenses.

So, like so many things in life, how much you decide to pay yourself is subjective. My biggest piece of advice is to make sure you think about taxes all year long, instead of just at the end of the year. I know so many business owners who spend, spend, spend and wonder why they don’t have a profit or enough saved up for taxes.

To sum it all up: First, determine how much you’re spending on expenses (not including subcontractors), find your tax bracket, always put away 1% profit, and work up to take %50 for payroll.

Now, this may take awhile, so be patient with yourself. Learning how to manage your money as a business owner is definitely a journey, but you wouldn’t be here reading this if you weren’t up to the challenge. 🙂

Click here to get free access to my library of financial resources so you can download the worksheet that will help you figure out how much to pay yourself, too.

Have questions about a more specific case or business? Let me know in the comments below.

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The Basics of Starting a Business Part 5: Online Shop

| Business, Business Basics, Small Business


In this series on starting a business, I’m exploring the different types of businesses you can run, from Internet-based to brick and mortar and everything in between – all located in Canada. In each post, I lay out the various pros and cons for the type of business, as well as things you should consider. I do this through the lens of a fictitious business. This company is selling dog collars.

One of the easiest and quickest ways to set up shop is with an online store front. There are so many options to choose from these days that it can seem a bit overwhelming, but each allows you to start selling your wares in no time.

The biggest hurdle to starting your online shop is to figure out which platform to use. There are many different types to consider, and each one will have a set of features meant to help fulfill your specific needs as an online seller. But most can be split into two categories, an online marketplace or a stand alone shop. Each has their pros and cons.

Online Marketplace

The first type of online shop is an online marketplace. Etsy, Handmade at Amazon and iCraftGifts are examples of this type of shop. These marketplaces allow you to set up an individual store selling dog collars within a larger marketplace of stores selling other various items.

These are usually the easiest to set up with minimal fees and often come with a recognizable household name, so your potential customers will have already heard of the platform. But beware of what that reputation is. If you are hand making your dog collars, figure out which platform has the best reputation for handmade goods. You may want to go with that platform.

Each platform will have different fees, such as listing fees, transaction fees or setup fees. For example, Etsy charges $0.20 per listing and 3.5% of each sale. There is no setup fee. For iCraftGifts, there is a one-time setup fee of $25 and depending on the number of listings you want, there is a tiered membership fee that is charged per month between $5 and $15.

The biggest downside of these platforms is being lost in the larger marketplace. There are over 1.6 million active users on Etsy, for example, and over 35 million items for sale on the platform. It’s easy to see how your dog collars could get lost in the crowd.


  • Easy to set up
  • Has name recognition


  • Easy to get lost in the crowd

Your Own Website

Another option is to open a shopping page on your own website. Services like Shopify, Big Cartel, Big Commerce and Squarespace allow you to do this.

Each of these types of services gives you control over the look and feel of your shop and allows you to have your own domain name. The pricing structure is usually a monthly fee along with transaction fees. So evaluate each of your options carefully.

For example, Shopify’s base plan starts at $29 a month, plus you’ll be paying 2.9% + $0.30 per transaction, as well as an additional 2% per transaction if you don’t use their payment system. Big Cartel has a free plan, but you can only list five products. Their base plan starts at $9.99, and you can only list 25 products.

Because these options are for a stand-alone shop, this can be both a blessing and a curse. You won’t have the same problem of getting lost in a marketplace like Etsy, but you’ll have to work harder to get your dog collar business out in the world because it most likely doesn’t have name recognition.

You will have more control over how you market your goods. If you hand make your dog collars, you’ll have the luxury to describe how you go about your process and craft the message of your items. With a marketplace, your items are usually associated with what that service’s message is, which you don’t control.


  • More robust online shopping solution


  • Monthly fees
  • No name recognition

What to Consider

Even if you’ve decided between having a shop within an online marketplace or a stand alone shop, there are other factors to consider.

You’ll need to evaluate what features you need to have for your online store. Is it easy inventory management? Shipping management? How robust the transaction reporting is? The ability to sell physical and digital products? Each of these platforms will handle these areas in different ways, or not offer features that you want or need. So pay close attention to what they offer with which level of service to make sure you’re getting what you need out of the service.

You even may end up starting with one solution just to get going then transition to another shop platform over time. Or you may end up having multiple online shop channels to capture the different types of dog collar shoppers.

No matter which platform you end up choosing, the most important thing is that you promote and market your shop. Because if no one knows about it, you’ll never have any sales.

These are the basics of starting an online shop to help you decide if it’s the right type of business for you and your business endeavors. I hope you’ve enjoyed this series. Read the series from the beginning.


The Basics of Starting a Business Part 4: Direct Sales

| Business, Business Basics, Sales


In this series on starting a business, I’m exploring the different types of businesses you can run, from Internet-based to brick and mortar and everything in between – all located in Canada. In each post, I lay out the various pros and cons for the type of business, as well as things you should consider. I do this through the lens of a fictitious business. This company is selling dog collars.

Direct Sales

More than likely you’ve attended a direct sales party, more commonly known as a house party. Think Tupperware. This is where the host invites friends over for snacks and drinks and a sales consultant pitches you a product, which you can see and feel in person before buying.

But today, it’s a lot more than just Tupperware.

House Parties

According to the Direct Sellers Association of Canada, nearly 800,000 people are direct sales consultants. They sell everything from loose tea to kitchen utensils. Using our fictitious business, it’s possible to sell dog collars in this way.

Selling dog collars as a sales consultant for a direct sales company offers a lot of perks. You can set your own hours. You earn a commission on sales, and you’ll likely get free training and join a team of consultants. They’ll be your support system and help push you with some friendly competition over who can sell the most dog collars.

It’s an easy business to start as you don’t necessarily need sales experience, but you do need to believe in the product you’ll be selling. Because if you don’t believe in it, you’ll have a lot of dog collars on your hands.

When researching which company’s products you want to sell, you’ll need to know the commission on sales, what support or training they offer, how much initial investment you would have to make and what level of sales are expected per month. To get started, you would purchase a certain amount of product at wholesale cost to bring to your house parties for demonstration purposes and potential sales. You’ll be able to sell some of those items during your parties, but most likely you’ll be placing orders for your guests. If you sell out of your demo products, you’ll need to order more. But that’s a good sign.

Customers like direct sales, too. They get to see and feel the dog collars before they buy in a relaxed environment, such as friend’s home. Accompanied by free drinks and snacks, it can feel like a social gathering instead of a sales pitch.

What to Look out for

If you want to sell dog collars or another product via direct sales, there are a couple of things to keep in mind. Depending on the company and product, commission rates will vary, but most start at around 10%. Some companies will encourage you to build a sales team and for each new sales consultant you recruit, you’ll receive a higher commission on your sales, as well as a cut on your recruit’s sales. There may also be trips and prizes involved. This is called multilevel marketing.

You’ll also want to know how much investment you’ll need to put in up front. Some companies require you to purchase a “starter kit” with a small amount of product which usually starts around $99 and how much product you’ll need to buy each month. You also need to know if any product you purchase will be refundable if you don’t sell it.

There are some downsides to being a direct sales consultant, too. Customers who attend house parties can often feel obligated to buy product and friends can feel pressured to buy from other friends on social media. So be careful how you approach your sales and try not to alienate your friends.

And because you can earn more money by recruiting others to your sales team, this is another area where you can alienate friends. While a friend may want to be supportive by asking you questions about your direct sales business, it doesn’t mean it’s an open invitation to try and recruit her.

Start Slow

Like any business, it’s best to start off slow and grow your sales and your sales team as time goes on. You’ll need to market beyond your friend circle to do so. They’re a great entry point, but a good sales consultant will look far beyond the people they know to make sales.

Another thing to keep in mind is what customers want. You may want to sell dog collars because you believe in them and think they’re a superior product, but if your friends and clients don’t have dogs or already have quality dog collars, you’ll need to reflect on if dog collars are really a winning product.

Perhaps your customers really love tea or are always in need of a new kitchen utensil or appliance. If you see a pattern of need, pursue the company that offers products that meet that need and choose a company whose products are in demand.


  • Flexible schedule
  • Low entry point


  • Can alienate friends
  • Can be harder if emphasis is on multilevel marketing
  • Can be pushing unwanted product

If being a direct sales consultant sounds good to you, you can research the members of the Direct Sellers Association of Canada (DSA) to see which company would be a good fit.

These are the basics on becoming a direct sales consultant to help you decide if it’s the right type of business for you and your business endeavors. Next time we’ll explore another business iteration.

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The Basics of Starting a Business Part 3: Affiliate Sales

| Business Basics


In this series on starting a business, I’m exploring the different types of businesses you can run, from internet based to brick and mortar and everything in between – all located in Canada. In each post, I lay out the various pros and cons for the type of business, as well as things you should consider. I do this through the lens of a fictitious business. This company is selling dog collars.

Affiliate Sales

You’ve probably come across affiliate links as you’ve read through some of your favorite blogs. These are links to buy products or services found either in the text of a blog post or as an ad in a sidebar. The author of the blog or owner of the website receives a cut of a sale if someone buys the product or service from that particular link or ad.

There are two sides to affiliate sales. You can run an affiliate program, or you can participate in an affiliate program.

Affiliate Program

Running an affiliate program means you would recruit affiliates or people who would post links or ads to your product or service, to try and increase your sales. In exchange, they would be given a commission on those sales. For instance, as the merchant of dog collars, your affiliate links would be to your dog collar listings and your affiliates would post these links or ads.  

Running an affiliate program can be time intensive. To start, you need to implement a system to manage your program. You’ll need to offer a good commission to recruit affiliates and give affiliates an easy way to sell your dog collars.

A good management system will keep track of affiliates, their personal links (how you track their sales), their commission rate and how and when you pay. There are software programs and professional networks you can purchase or join that can help with this, and their costs will vary depending on the size of your business and your potential for sales.

Commissions can range from 4% to 30% and deciding on a rate can be tricky. You’ll need to weigh the cost to you (paying out commissions) versus the potential for increased sales overall.

Make sure it’s easy for affiliates to sell your dog collars. Everything from registering with your program to being able to use photos, descriptions and their personal links and ads should be easy to obtain and easy to implement. This should include anything else they would find useful in helping them make a sale on your links.



Have other people sell for you

Potential for increase in sales



Must pay commission on sales

Can be hard to set up and manage



Being an affiliate means you are posting links and ads to someone else’s products or services in the hopes of gaining a commission on a sale.

Depending on how much effort you want to give an affiliate, it can be a way to make passive income, meaning you’re not actively trying to sell. It’s a sale that can run in the background, where you don’t have to pay much attention to it or put much effort into it.

But like anything, the more you put into it, the more you will get out of it.

In this version of your dog collar business, you may post about similar products to your dog collars. Perhaps your customers always ask about dog bowls, which you don’t sell. Posting a link or running ads for dog bowls as an affiliate is one example of how being an affiliate could work for you.

You would need to decide which affiliate network you want to join. There are several where they place ads on your site for various products. Or you can search out independent networks and programs and contract with them one by one.

In each instance, you’ll need to know what your commission would be and how and when you would be paid.

Another thing to consider is how comfortable you’d be not knowing the product. Would you need to have first-hand knowledge of the product or service before becoming an affiliate? For example, is your reputation going to be harmed if someone purchases a dog bowl from one of your affiliate links but the product is of poor quality? You’ll need to decide how much time you need to research the various goods and services you would be selling before you place your affiliate links or ads on your site.

Also, if you join an affiliate network that place ads on your website, would you be ok with any ad? Most networks allow you to be a bit selective in the type and scope of ads, but you won’t have complete control over what ads are served on your site.



Create passive income

If you like a product, selling it can be easy



Commission can be low

Product or service can be poor quality


In either scenario, the program or affiliate sales shouldn’t be your main business or source of income. These paths are considered supplemental to your main business, whether that’s direct sales, wholesale or anything in between.


These are the basics of starting an affiliate program or becoming an affiliate to help you decide if they’re right for you and your business endeavors. Next time we’ll explore another business iteration.


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