9 business101 3.0 - she anna bella · 2016-10-30 · business 101 4 business 101 3. we suggest...

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SINESS 101

Business 101

Your ‘Independent Contractor’ Role with She Anna Bella ...........................................3

Managing Your Business & Setting Up Your Office .......................................................3

Sales Taxes – GST/HST & PST .........................5

Applicable Taxes & Exemptions ...................6

Hostess & Customer Sales Taxes and Lady Boss Refunds .....................................6

Provincial Licensing Requirements for Direct Sellers ...................................................7

The Basics................................................................ 8

Filing & Record-Keeping ..................................9

Income Tax ..............................................................10

Re-Paying Your Start-Up Costs & Re-Investing Money into your Inventory ......11

Four Event Scenarios – A Glance at $300, $600, $1000 and $1400 Events .......11

BUSINESS 101 3

BUSINESS 101

Your ‘Independent Contractor’ Role with She Anna Bella

You are now considered self-employed! Congrats on being an entrepreneur and starting your She Anna Bella business! All Lady Bosses are required to sign an Independent Contractor Agreement that governs the business relationship between the company and each Lady Boss. Any questions regarding your contract can be directed to your Unit Director or HQ. Because you are an Independent Contractor and not a She Anna Bella employee, you will NOT receive a T4. Typically, employees have tax withheld from their wages throughout the year but because you are an Independent Contractor, you will be responsible to report all sales of She Anna Bella products that result in business income on your Canadian income tax return. You will also be responsible to pay any monies owing in income tax on the net taxable income that you are reporting. See more details later in this section under “Income Tax”.

She Anna Bella will provide you with all the support, training and motivation needed to become a successful Lady Boss. We offer a true entrepreneurial experience but are providing the brand, the promotional materials, the online presence, and the knowledge and training so that you are able to focus on making your business successful as quickly as possible. We are providing everything you need to hit the ground running! Go, go, go!

Managing Your Business & Setting Up Your Offi ce

She Anna Bella has laid out a program that off ers you everything you need to do well but the manner, commitment and enthusiasm in which you operate your business will determine whether or not it is a profi table venture. You are now the proud owner of a fashion accessory business... you must start THINKING like a business owner! You are the CEO of your business and your success is truly in your hands.

Here are some key things we recommend that you do to start operating She Anna Bella as a true business leading to a greater chance for success...

1. Get on Facebook, Instagram and Twitter! Use it! Social media is one of the BEST marketing tools your business will have! Social media is popular—really, really popular—for all ages and demographics. Facebook in particular has extensive reach and dynamic functionality so that almost every business can benefit from having a presence on it. Not only that—social media is free! It won’t cost you anything to sign up for these sites. Some social media sites offer low cost advertising, which allows you to reach more people, increase your audience and grow your business faster. Follow She Anna Bella at www.facebook.com/sheannabellastyle or on Instagram and Twitter @sheannabella and share any of our product promotions or fun tweets with your followers.

2. Assign a spot in your house to be your She Anna Bella “offi ce”. Preferably a space where you can keep fi les organized and one that off ers the ability to focus on work during a stretch of uninterrupted time. Life has become so busy nowadays and focused work time will be the key commitment to help generate new ideas and continue to grow your business! Once you’ve picked a spot, doll it up a little! Make it pretty, make it very “She Anna Bella” and create a space that you LOVE to sit down in. It’s amazing what a few pretty things will do to fuel your passion and help you to literally get lost in your work!

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BUSINESS 101

3. We suggest opening up a separate bank account for all your She Anna Bella banking so that your income and expenses are easier to track and are maintained separate from your household expenses.

4. Have a designated “business” phone number. Installing a separate phone line can be costly so think about assigning your cell phone number as your work number. This helps keep business and personal calls separate and creates a professional standard from the fi rst point of contact. Don’t forget to record a stellar voice message greeting to thank your caller for contacting your She Anna Bella business. Along the same lines of professionalism and fi rst impressions, She Anna Bella has created a specifi c @sheannabella.com email address for you. Be sure to use this for ALL She Anna Bella related communication online.

5. Have a system for booking your events into a calendar, following up on the steps of the Hostess coaching for each event you do, tracking communication with leads on additional event bookings and possible new Lady Boss referrals, and fi ling your receipts and invoices for income tax purposes. Being organized from the start is a priceless piece of business insight that you’ll thank yourself for later!

6. Set up “business hours”. With your busy life, we realize that committing time to your business may be tough but your profitability depends on it! Sit down and mark off times on your weekly calendar that will be dedicated to your She Anna Bella business and stick to it! If you focus regularly on getting exposure for your business, work your leads, and follow up with potential and past Hostesses as well as future Lady Bosses, then your calendar will be booked full and your team will grow! We’ve assured you that, with She Anna Bella, you won’t have to arm-twist to get Hostesses to book events with you—but people do need to be informed about your business to book an event! The event bookings are not going to come to you if you do nothing to help the process along. You have to get out there and grow your business! Refer to the Goal Setting Worksheet in the Building & Growing Your Business section to help you determine the business hours you will set for yourself.

7. Subscribe to a fashion magazine to keep up with the current trends (This is a business expense that you can claim!) They are materials that will help you educate yourself to become an expert. Feature a “She Anna Bella” look at your events, using pages from the magazines as part of the display! This lends credibility to how on-trend our products are! The top three magazines we recommend are LouLou, InStyle, and Elle Canada.

8. Dress the part!! Take your acquired knowledge, shop from your She Anna Bella supply, and get out there in the public looking like a true Lady Boss! One of the things that our reps always joke about is how they have literally sold a purse off their shoulder at the grocery store or a bracelet off their arm at a wedding! YOU are your BEST advertising!

9. Lastly, now that you’re exhilarated and ready to head into your She Anna Bella business, we just want to remind you to balance your family time and personal time too! This is your business, and we want you to make it

Subscribe to a FASHION MAGAZINE to keep up with the current trends.

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BUSINESS 101

work for you AND for those you love. As with any new business, it is sometimes diffi cult to bump yourself up on the priority list. But if you don’t take care of yourself, then you can’t take care of your family or your customers. So just have fun and enjoy the path to pretty things!

Sales Taxes – GST/HST & PST

Alternate Collection MethodOne of the trickiest parts of being self-employed is usually the tax implications and how you remit tax collected from your customer vs. tax spent on business supplies and expenses. Through an agreement with Revenue Canada and all provinces, She Anna Bella has relieved you of the responsibility of fi ling GST or HST returns with Revenue Canada or fi ling PST returns with individual provinces. This is known as the Alternate Collection Method (ACM). Yup, we’ve just made owning your own business a whole lot easier! ACM is available to Direct Selling Companies in Canada to simplify the collection of taxes. In this program, She Anna Bella collects GST/HST/PST (as applicable to your province of residence) from Lady Bosses based on the RETAIL PRICES at the time you order and pay for your purchases. So essentially, this means that WE are collecting the taxes that your customers pay ahead of time, and we then remit that tax to Revenue Canada and the provinces on your behalf so that you don’t have to!

Because we are remitting the taxes on your behalf, you do not need to register a GST/HST or PST account. Since you have no need for a tax account, it is actually not necessary to register your business with the government. And yes, you CAN take advantage of the many Eligible Business Expenses an entrepreneur has available to them even without registering (see further details later in this section about submitting a T2125 at tax time).

Provincial Tax Rates Across Canada

PROVINCE/TERRITORY GST/HST PSTAlberta 5% n/aBritish Columbia 5% 7%Manitoba 5% 8%New Brunswick 15% n/aNewfoundland & Labrador 15% n/aNorthwest Territories 5% n/aNova Scotia 15% n/aNunavut 5% n/aOntario 13% n/aPrince Edward Island 5% 9% *Quebec 5% 9.975% *Saskatchewan 5% 5%Yukon 5% n/a

* PEI & Quebec - The sales tax is applied to the total of the selling price plus the GST.

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BUSINESS 101

Applicable Taxes & Exemptions

GST/HST is due on all retail purchases. As agreed upon between She Anna Bella and Revenue Canada, items considered sales supplies, sales aids and thank you gifts are not subject to HST/GST. Under this agreement, shipping charges are classifi ed as sales aids and therefore, GST/HST is also not assessed. PST (if applicable in your province of residence) is due on all retail purchases, goods and services. This includes sales supplies, sales aids, thank you gifts and shipping charges.

Hostess & Customer Sales Taxes and Lady Boss Refunds

Hostesses DO NOT pay taxes on: Any items given away as thank you gifts or sales aids. This would include the Booking Gift, free purse for hosting, free scarf for hitting $500 in sales, free wallet for hitting $1000 in sales, and free necklace for second-time Hostesses.

You have pre-paid the taxes at the time of purchasing all of these giveaway items and because you are not collecting taxes from your Hostess, you need a sales tax refund for that money! When you input your sales into an Event Report, your online account will automatically calculate the amount of tax that you need to be refunded from your giveaways/freebies and places this amount onto your account as a credit. The exception here is with the free Booking Gift. She Anna Bella reimburses you with replacement Booking Gift giveaways at the beginning of each month based on the number of qualifying events you inputted in the previous month. When the replacement Booking Gifts are provided to you, there will be no tax added into the billing of these items.

Hostesses DO pay taxes on: The 10% Free Merchandise Credit. Sales taxes on items selected with the 10% Hostess Credit are calculated on the suggested retail price and must be paid by the customer.

Hostesses DO NOT pay retail sales taxes on the free bracelet for achieving 15+ guests. And customers do not pay taxes on the free earrings for bringing two friends to the event. This is because these items have no retail value. You have purchased these items as She Anna Bella business supplies and therefore have not pre-paid taxes on them so you have no need to collect taxes from the customer.

As part of a company wide She Anna Bella deal to our customers, we off er all jewellery at Buy 4 Items Get the 5th Item for Free. When customers take advantage of the Buy 4 Get the 5th Item for Free, they do not pay retail taxes on the 5th item.

Some residents of Canada from aboriginal decent will be recognized as Native Status and will carry a Native Status Card to qualify for tax exemptions. Please see the provincial chart located in the section Account Creditsfor full details on the tax rate you need to be charging these customers.

In many of the Hostess and customer situations above, your account will automatically calculate and apply the sales tax credits to refund the amount that you pre-paid. However, because of the Alternate Collection Method,

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BUSINESS 101

the following scenarios are times when you have to manually submit a Tax Refund Request through your online account in order to get your refund:

Selling Product to Customers at Discounted PricesAs per the Independent Sales Lady Boss Agreement that you signed with She Anna Bella, you are not allowed to discount retail prices without She Anna Bella authorization. With this being said, She Anna Bella HQ may announce dates where you have permission to reduce the prices of certain products by approved discounts. Because you have pre-paid the tax on the regular retail price of these items, when you sell them at the discounted price during the approved sale period you will be entitled to receive the diff erence in the tax that was collected.

Customer Buys 4 and Gets the 5th for FreeWhen a customer takes advantage of the Buy 4 Get the 5th for Free deal, you will NOT be charging the taxes on the 5th free item. In order to get the tax that you have pre-paid back you will need to complete a Tax Refund Request form in your online account for that item.

Sales to Customers in a Diff erent ProvinceShe Anna Bella charges sales taxes to Lady Bosses based on the province designated in each Lady Boss’s shipping address. You must charge the GST/HST/PST applicable within the province where the event is BEING HELD. There may be occasions, especially if you live close to a provincial border, in which you will do a She Anna Bella event in a province with a sales tax rate that is lower than your own.

In any of these instances, you will need to complete a Tax Refund Request form on your online account. Upon acceptance of this claim, She Anna Bella will credit your account for the diff erence between the amount of tax that you pre-paid for these items and the amount that was actually collected from the customer.

Provincial Licensing Requirements for Direct Sellers

She Anna Bella is considered a direct selling company because we are selling merchandise in-person outside of a retail location. Any home event business is considered a direct selling business.

She Anna Bella HQ has taken care of the corporate direct selling licensing requirements in Canada. However, most provinces and territories require INDIVIDUAL direct selling licenses from each representative. If you are a Lady Boss doing business in any province or territory other than British Columbia, Québec and Ontario,you are responsible for and required to obtain and renew a direct selling license annually. Please ensure that you have obtained the proper licensing to operate your She Anna Bella business. The application form or website link for information for your province/territory of residence should have been provided to you by HQ or your Unit Director at the time you signed up to become a Lady Boss. Applying for the individual direct selling licence and renewing it annually in these particular provinces is YOUR responsibility!

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BUSINESS 101

Disclaimer: Please note that the information contained in the Business 101 section of this manual is intended to be taken as a suggestion on how to organize and track your self-employment income and business-related expenses. She Anna Bella is not responsible for misinterpretation of Canadian Income Tax laws and/or legislation. We recommend that you refer directly to the Canada Revenue Agency Business and Professional Income Guide (T4002) available at www.cra-arc.gc.ca or your local tax o� ce, and/or a tax professional such as a Chartered Accountant for all current legislation and tax laws.

The Basics…

What is Income with your She Anna Bella business?Any and all money generated and collected from sales of your merchandise from home events, public events and personal sales.

What are Expenses with your She Anna Bella business?Your biggest expense is the cost of your inventory. Other major ones include: shipping paid, Hostess incentives/freebies, customer incentives/freebies, gas to and from your events/any She Anna Bella work-related errands (we recommend you keep a log-book in your vehicle to track your business kms driven), and anything that you buy that is work-related. Every pen and piece of paper for your offi ce adds up, keep your receipts for everything!

Other expenses are referred to as “Eligible Business Expenses”. Let’s clear one thing up …your Eligible Business Expenses are STILL costing you money. It still has to be paid for by you! Some think that by “writing something off ” it means they get their money back from the government. This is not the case. Where an Eligible Business Expense makes the diff erence is at the end of the year when it comes to how much income you are taxed on (how much Income Tax you pay). Examples of these expenses are:

* Your vehicle costs - you can expense a portion (a percentage e.g. 30%) of your lease or fi nancing payment according to how much of the vehicle use is for generating income for your She Anna Bella business. You can also use the same formula to expense any maintenance and repairs to your vehicle.

* Your home is now your “place of business” - meaning that you can claim a portion of your home expenses according to how much space in your home you use for your She Anna Bella business. You can deduct a part of your maintenance costs such as heating, home insurance, electricity, and cleaning materials. You can also deduct a part of your property taxes, mortgage interest, and CCA. To calculate the part you can deduct, use a reasonable basis such as the area of the work space divided by the total area of your home e.g. if you have an offi ce and storage area that is solely dedicated to She Anna Bella that is 500 square feet in a 2500 square foot home, then you could expense 20% of your home expenses. If you use part of your home for both your business and personal living, calculate how many hours in the day you use the rooms for your business,

IMPORTANTThe Canada Revenue Agency states that a business needs to keep ALL BUSINESS RECORDS on file for a minimum of 6 years after the end of the taxation year to which they relate. Be sure to match up appropriate reciepts and keep them all together to save much, much choas at annual tax time and down the road if you’re ever audited!

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BUSINESS 101

and then divide that amount by 24 hours. Multiply the result by the business part of your total home expenses. This will give you the household cost you can deduct. If you run the business for only part of the week or year, reduce your claim accordingly. For more information, see Interpretation Bulletin IT-514, Work Space in Home Expenses at www.cra-arc.gc.ca

Just remember that many costs to keep your home up and running are now considered part business costs and can be classifi ed as such when it comes to tallying up your business expenses.

Filing & Record-Keeping

Start a good fi ling system for your She Anna Bella records. Our recommendation is that for EACH MONTH you have TWO fi les – Income & Expenses.

When you input an event into your sales reports in your account, print off two copies of each event. One copy can be put into your Income folder (highlight how much income was collected at the event - on your reports this is called “Pre-Tax Sales”). Staple all of the appropriate customer receipts to that document for back-up (your total receipts should match the total sales you have highlighted from your report).

Take the second copy of this event sheet that you’ve printed out and highlight the dollar amount of Hostess and customer incentives that you gave away at that event - on your reports this is called “Hostess Bonus Discounts (Manual Freebies)”. The “Automatic Freebies” are the ones that She Anna Bella is covering the cost on, so of course you can’t claim those! This copy can be fi led into your Expense folder, because remember, any product you give away as freebies and incentives are business expenses for you.

If the sale was an individual sale, tradeshow or public event and not from a home event then no discounts/freebies apply and you can simply print off the one copy and add it to your Income fi le. It is important to print this documentation off at the time of inputting. Our She Anna Bella online accounts are constantly going through upgrades and improvements and there is a risk that if you go back to print off earlier reports for your fi les, that they may not be accurate because data has shifted to new areas in a newer version of that particular report. Again, DON’T wait until tax time to go back in your account and pull together all of this information. She Anna Bella HQ cannot help you with previous records that may have been laid out diff erently in old formats of the online accounts.

If you completed a She Anna Bella fundraiser, fi le the 20% donation into your Expense File. If you gave away a door prize or a raffl e gift at an event, then track it by fi ling it in your Expense File as well.

IMPORTANTYou will be claiming the TAX-IN cost of all your business expenses EXCEPT your inventory, which you will claim the BEFORE-TAX total. This is because She Anna Bella collects and remits the retail taxes on your behalf for your inventory, but for the rest of your business expenses you need to make sure you get that tax money back, so be sure to claim your tax-in totals for all other costs.

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BUSINESS 101

All receipts/invoices/bills for other expenses (e.g. utilities, vehicle payments, etc.) need to also be fi led into your Expense folder. Start collecting all your receipts. Don’t throw anything away, every little bit adds up! And you can’t claim it as a business expense if you don’t have a receipt as proof that you paid for it.

At the end of each month, add up your total sales (everything included in that Income fi le) and write it on the outside of that fi le folder. Add up your total Expenses (everything included in that Expense fi le) and write it on the outside of that fi le folder. You now have a month-to-month tally of your businesses fi nances!

Income Tax

Just like any other working Canadian, you must pay Income Tax on your earnings. The benefi t of being self-employed is that you are only taxed on your NET taxable income. And the higher your business expenses, the less your net taxable income is on paper. So, like we said …collect every applicable receipt and be sure to properly claim all of these expenses!

We recommend consulting a tax advisor such as a Chartered Accountant to help you with your business taxes.

At the end of the year, if you have followed all of our suggestions for your fi ling system, then all you have to do is add the monthly totals that you’ve written on the front of each Income and Expense folder and you’ll have your annual Income – Expenses = NET Taxable Income.

At tax time, you or your tax professional will need to complete a T2125. Remember to claim the TAX-IN cost of all of your business expenses EXCEPT your inventory, where the BEFORE-TAX total will be claimed (as explained in the previous IMPORTANT box).

Sales (Events/Personal Sales) $ _________

Cost of Sales (Inventory) - $ ________ Before Tax Total

Profi t = $ ________

Expenses (Overheads)Tax-In Cost

Vehicle Expenses - $ ________ Home O� ce - $ ________ O� ce Supplies - $ ________ Hostess/Customer Giveaways - $ ________

Net Taxable Income = Pro� t - Expenses

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BUSINESS 101

Re-Paying Your Start-Up Costs & Re-Investing Money into your Inventory

We want to include some start-up tips to help make sure you “get-ahead” with your She Anna Bella business. The re-stocking and building up of your inventory can make you feel like you’re constantly behind fi nancially if it’s not handled properly!

The key is to re-order AS YOU SELL and grow your inventory when you can!! If you get behind in your stock, then you have to spend a whole bunch of money at once to re-stock!

Our recommendation is that after each event you do and each sale you make you should be ordering stock to replace what you sold. Use your “cash-on-hand” or account credit (income from that sale) to pay for this re-order. As soon as your order is completed by HQ, print out the invoice and if you have paid for the order by credit card, then pay that amount off on your card RIGHT THEN! By paying off as you go, you won’t be left with a huge credit card bill at the end of the month that you can’t pay. You are only restocking what you’ve sold, which you obviously have the cash for because of the event income!

Our next recommendation is that for each event/sale you do in the beginning, take any profi t left after re-ordering and put it towards paying off your Start-Up Package cost. Whether this money was transferred, borrowed, put on a credit card or Line of Credit, etc.... pay it back fi rst before you start taking money out for yourself. The quicker you pay off your start-up costs, the faster you’ll get ahead!

Once your Start-Up Package is paid off , you’ll be able to take full advantage of the profi t from each sale! But it’s a good habit to stick with going forward to pay for your re-orders as you receive them so that you’re always ahead and can take full advantage of the money that is now showing up in your bank account!

Four Event Scenarios – A Glance at $300, $600, $1000 and $1400 Events

Following are four event scenarios to give you a better idea of your income, expenses and profi t for various event sales levels. Take note that the higher your event sales, the higher your profi t percentage! Those events $1000 and over are defi nitely the “sweet spot” to be making the most with your She Anna Bella business! So keep your stock levels high for the best selection, ensure your merchandising displays are always looking their best and that you work your

REMINDER

She Anna Bella is reimbursing you for the 10% Hostess Credit and replacing the free Booking Gift so those numbers are not included in your cost to restock in these event scenarios. But it is important to order to replace these freebies that you’ve given away! Otherwise, you’ll never be ordering to replace exactly what inventory is gone and your stock will slowly get depleted. For e.g., at a $1000 event, the Hostess Credit is $100 or $55 wholesale cost on inventory so be sure to order an additional $55 of product plus other freebies you gave away to the Hostess!

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BUSINESS 101

enthusiasm to help increase those sales levels at EVERY event! Remember that She Anna Bella covers part of your Hostess Freebies (the Free Booking Gift and the 10% Hostess Incentive), so of course those numbers are not included in the scenarios because they are not costing you anything!

$1000 Retail Sales Event$1000 (Income)

• Minus Cost to Restock from Guest Purchases* $550

• Minus Cost to Restock from Hostess Giveaways* $61.50

• Minus Estimated 3% of Retail Sales for Supplies & Shipping $30

= $358.50 PROFIT That’s 36% Pro� t o� of Retail Sales!

* Inventory from a $1000 event would cost you an estimated $550 to purchase at your wholesale cost

* Giveaway based on a free $60 purse for hosting ($36 wholesale cost), free scarf for $500 in sales ($8 wholesale cost), free wallet for $1000 in sales ($14 wholesale cost) and free bracelet for 15+ guests in attendance ($3.50 wholesale cost)







* Giveaway based on a free $60 purse for hosting ($36 wholesale cost), free scarf for $500 in sales ($8 wholesale cost), free wallet for $1000 in sales ($14 wholesale cost) and free bracelet for 15+ guests in attendance ($3.50 wholesale cost)







* Giveaway based on a free $60 purse for hosting ($36 wholesale cost), free scarf for $500 in sales ($8 wholesale cost) and free bracelet for 15+ guests in attendance ($3.50 wholesale cost)



• Minus Cost to Restock from Hostess Giveaways* $36


= $90 PROFIT That’s 30% Pro� t o� of Retail Sales!


* Giveaway based on a free $60 purse for hosting ($36 wholesale cost)

9 business101 3.0 - she anna bella · 2016-10-30 · business 101 4 business 101 3. we suggest...

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