Blow Your Competition Right Out of the Water

By Randall Orser | Small Business

No matter what sort of business you start, you're likely to face competition from other businesses like yours. You need to figure out ways to stay ahead of the competition as well as blow them out of the water.  Here are 12 ways to gain the competitive advantage that you seek.

  1. Run your business for longer hours or during times when your competitors are closed. If you run a  daycare, for example, you might extend your hours to include evenings and weekends to accommodate parents who are taking night classes or who are shift workers.
  2. Go the extra mile. It's amazing how little things make such a big difference. Send thank-you notes,   birthday or Christmas cards to your customers or clients.
  3. Offer your loyal customers special discounts or start a loyalty program.
  4. Always be honest and upfront with your customers. If you messed up, admit it and take immediate steps to rectify your mistakes.
  5. Treat all of your customers with courtesy and respect. That doesn't mean that you have to like every customer or client that you deal with, but you do have to treat each one with professionalism and common courtesy. 
  6. If you cannot perform a certain service or do not stock a particular product that your client or customer has requested, be upfront about it. Better yet, refer them to someone else who has the product or service that they need.
  7. Strive to provide excellent customer service. Customer service can make or break your business.
  8. Study your competitor's advertisements to see which products or services they are promoting.       Get your hands on all of their promotional materials and look for a way you can improve on what they have already done.
  9. Better yet, buy your competitors product. How does it compare to yours? Are there any areas that you can improve on?
  10. Do informal surveys of your target market, both online and offline. This will help you to uncover exactly what the needs of your target market are so that you can more effectively meet them.
  11. Test a product or service similar to that offered by your competition by offering your customers or clients a free consultation or product in exchange for honest feedback.
  12. Send business to your competition. This isn't as crazy as it sounds, and the payoff can be huge. If there is a service that you don't provide and you know of a competitor who does then refer the customer or client to them. Ask your competitor to so the same for you.

Pick the idea that you like the best from the ones listed above and spend some time implementing it in your business and set yourself apart from your competitors.

Have You Not Filed Your Tax Return Yet?

By Randall Orser | Business Income Taxes , Personal Income Tax

Have You Not Filed Your Income Tax Yet?

Every year in Canada we must file a personal income tax return by April 30th(June 15thfor those who are self-employed). As with anything in our busy, hectic lives, we do forget; however, what if it’s your tax filing that you forgot? That can have serious consequences depending on what you owe, and for what benefit programs you are qualified.  

The first thing is Don’t Panic! Okay you will but calm down. If you’ve realized you haven’t filed your taxes, and it’s not too late in the year, you’ll be okay. Yes, if you owe money, you’ll have a penalty and interest, however, catch it soon enough and it won’t be that much. Of course, if you are getting a refund, then you won’t be charged any penalty. And, getting benefit payments will definitely be delayed, as you haven’t filed, though you will get a catch-up payment. 

Canada Revenue Agency (CRA) has now allowed the electronic filing of tax returns until January of the following year, so for the 2017 filing year you can electronically file until January 16th. Eventually, I believe, we’ll be able to file electronically for any tax year any time. 

Many people end up not filing for fear that they will owe or owe way more than they can pay at the moment. It’s much better to file and owe than not file and owe, as CRA tends to get a bit anxious when they realize you owe but haven’t filed and paid yet. Of course, these same people think they’re going to owe tons of money, and, in the end, don’t owe near as much as they thought, or, hilariously, get a refund. I love the expression on peoples’ faces when I tell them they owe $X, and they were thinking $XXX. 

What are the penalties for filing late? If you owe tax for 2017 and do not file your return on time, CRA will charge you a late-filing penalty. The penalty is 5%of your 2017 balance owing, plus 1%of your balance owing for each full month your return is late, to a maximum of 12 months.  

For example, you owe $3,200 and don’t file until November 15th2017. In this case you owe $583.91 in penalties plus 5% interest compounded daily (approximately $194). That’s a total balance owing of $3,977.91. Your penalties/interest are 24.3% of the original balance owing. 

If you failed to report an amount on your return for 2017,andyou also failed to report an amount on your return for 2014, 2015, or 2016, you may have to pay a federal and provincial/territorial repeated failure to report income penalty. The federal and provincial/territorial penalties are each 10%of the amount that you failed to report on your return for 2017. Your late-filing penalty for 2017 may be 10%of your 2017 balance owing, plus 2%of your 2017 balance owing for each full month your return is late, to a maximum of 20 months. That can get quite steep depending on how much you owe. 

Using our example above of owing $3,200, and this is another year of filing late your penalty would be $764.09 for a total of $3,964.09, and interest would be $203 for a total of $4,167.09 (30.2% of the original amount owing). 

From our examples above it is much better to pay upon filing (or pay by installments when you believe you have a big balance owing). If you know you’re going to owe, but don’t have the funds at filing, file anyway and work out some kind of payment arrangement with CRA.  

Do you have multiple years to file? Can’t find your slips? If your slips are normally filed with CRA (such as T4s, T5s, etc.) then you can request copies and use those to file your returns. Your tax preparer can do an auto-fill return for 2015 and 2016, and if you gave them consent, could grab the other years too. CRA no longer worries about returns that are more than 10 years old, unless you ended up owing in those years. You will have to paper file for 2012 and prior. If you believe you will owe for these prior years, you may also want to look into the Voluntary Disclosures Program.  

With the Voluntary Disclosures Program, you may file a disclosure to correct inaccurate or incomplete information, or to provide information you may have omitted in your previous dealings with the CRA. More specifically, this includes information you have previously reported that was not complete, information you have reported incorrectly, or information you did not provide previously to the CRA.

Canada has a high compliance rate (94.5%) of people who file their taxes on time. If you find you’re not one of those, you may need to look into why you’re always late filing. Are you using a tax preparer now? Maybe you should. I hound my clients to get me their stuff, and most appreciate that. Of course, once you’re caught up always ensure you file on time after that so you avoid higher penalties.

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It’s Summer, Time to Delegate

By Randall Orser | Small Business

When setting up a business, people often try to do everything themselves and find it hard to delegate work to others. But spreading yourself too thin can be detrimental to both your customers and employees. Here are some of the reasons outsourcing your bookkeeping can be the best decision you will ever make for your company. 

Time constraints 

Many business owners find it difficult to find time to keep their accounting up to date. A backlog develops, which makes it difficult to extract important financial information. Employing a bookkeeper means you can concentrate on generating sales and improving the general state of your business, while keeping abreast of regular financial reporting. 

Lack of financial acumen 

Being a good manager doesn't necessarily mean you are a good accountant. Many business people are intimidated and stressed by the prospect of handling complex accounts which involve sifting through innumerable pieces of paper. Procrastination typically ensues and, as your daily financial tasks remain incomplete, important payments or deadlines are missed. To avoid this situation, hire a bookkeeper to keep paperwork organized and up to date.

Accuracy  

Bookkeepers with professional qualifications are accurate and organized. This reduces the margin of error in financial reporting, especially compared to a busy manager who is trying to run a business. However, for business owners who prefer to do their own bookkeeping, computerized accounting packages offer a middle ground -- a user-friendly and cost-effective option with reduced margins of error. 

Efficiency and Confidentiality  

Bookkeepers can offer advice on how to maximize profits by cutting costs. They also provide timely financial reports upon which vital business decisions can be made. Moreover, all business information and data are handled with an element of professionalism, giving you confidence that your business affairs are handled efficiently and with confidentiality. 

Employing a trained bookkeeper who can perform routine accounting tasks in half the time of an untrained member of staff is a positive step for any business. Paying a self-employed accountant often saves the company more in taxes and National Insurance contributions than the accountant's fees. Your company is also assured that all work will be completed on time, without incurring charges and fines from missing important deadlines.

 

 


How Secure is Your Information as a Taxpayer?

By Randall Orser | Personal Income Tax

The big thing today is online security, or cyber security, and you need to know whether or not your data online with Canada Revenue Agency (CRA). For the most part it is, but there is always a chance. Just remember that the hackers aren’t someone sitting in their mom’s basement in their underwear hacking away on their laptops. It’s criminal organizations as well as government organizations, such as Russia’s FSB or China’s MSS, that are doing the hacking in what’s called ‘hacking farms’ that are the real problem. So, how is CRA taking care of your data?

The Canada Revenue Agency (CRA) takes the security of all taxpayer information very seriously. The CRA keeps a close watch on internal processes to prevent unlawful attempts to obtain tax information and to make sure that taxpayers’ rights are protected.

Safeguards

For the security of taxpayer information, the following policies and procedures are in place:

  • Personnel screening – All prospective CRA employees are screened for security before employment.
  • Employee awareness of their responsibilities – New employees are trained on their security obligations and security awareness information is regularly communicated to all employees. All CRA employees are subject to strict standards of conduct as defined in the CRA's Code of Ethics and Conduct.
  • All taxpayer information is protected – Taxpayer information must be kept physically secure. Employees may not send taxpayer information by email or leave voice messages containing taxpayer information. Employees have to make sure information is shared only with the taxpayer concerned or with a third party only after the taxpayer has given written consent, except where the disclosure is authorized by law.
  • Security markings on forms and documents – All CRA forms and documents containing taxpayer information are marked Protected. These markings help CRA employees make sure sensitive information is handled securely.
  • Access to taxpayer information is on a need-to-know basis – CRA employees, such as taxpayer services personnel, auditors, investigators, and those handling income tax files, have only the levels of access to taxpayer information required to do their jobs.
  • Regular risk assessment – The CRA performs regular risk assessments and internal audits to ensure its internal processes are secure.
  • Suspected breaches of confidentiality of taxpayer information – If a taxpayer tells the CRA about a suspected breach of confidentiality of his or her personal information, the Agency can protect that taxpayer's account by disabling all online access whether it is My Account for Individuals, My Business Account, Represent a Client, NETFILE, or EFILE. Online access can later be restored at the taxpayer's request by calling the e-Services Helpdesk at 1-800-959-8281.
  • Investigating possible breaches – CRA officers immediately and thoroughly investigate any security breach or allegation of unauthorized access or disclosure of taxpayer information. Any employee found to have acted inappropriately is subject to disciplinary action, up to and including the end of employment. Potential criminal acts are referred to the RCMP for investigation.

Legislative framework

The CRA’s legal obligation to safeguard the confidentiality and integrity of taxpayer information for which the CRA is responsible is stated in the following legislation:

Under the Income Tax Act, the Excise Tax Act, and the Excise Act, 2001, an employee may disclose taxpayer or confidential information to the person about whom the information relates. However, no employee can give that information to a third party without the written consent of the taxpayer, except where authorized by law to do so. Similarly, both the Privacy Act and the Access to Information Act do not allow the disclosure of personal information, except under circumstances as stated in the legislation.

The CRA's controls to protect information from external threats

Protecting the Canada Revenue Agency's (CRA) integrity includes ensuring that we have the proper systems and technologies in place to safeguard the sensitive information that we hold from external threats.

The CRA adheres to the Policy on Government Security and direction provided by lead security agencies like the Communications Security Establishment Canada (CSEC) and Public Safety Canada (PSC). Additionally, the CRA publishes, promotes and monitors its own security policies that guide and support the CRA's culture of integrity.

Ongoing improvements

The CRA's team of highly qualified information technology professionals works in conjunction with other departments such as Shared Services Canada and the Treasury Board Secretariat to identify and mitigate cyber threats and risks to privacy and the security of the data we hold. The CRA follows a continuous improvement security program where the effectiveness of the security tools are continuously evaluated and improved.

As part of our commitment to continual improvement and as a result of the CRA's experience in addressing vulnerabilities to caused by the Heartbleed bug, our security controls and policies are being reinforced and updated to ensure that this or similar types of incidents do not re-occur. The CRA is working closely with Shared Services Canada and the Treasury Board Secretariat to ensure our response to security threats and software vulnerabilities is timely. In addition, more monitoring has been put in place to identify potential vulnerabilities in our environment. With these enhancements the CRA is able to respond even more swiftly in the unlikely event of another incident.

A layered approach to security

As threats to security can occur prior to, during, or after the receipt of electronic data, the CRA employs a layered approach to security.

All communications and transactions with the CRA are protected and are conducted on secure platforms. As phishing scams become more frequent, the CRA is proactive in warning the public about fraudulent communications claiming to be from the CRA.

External services are protected by firewalls and intrusion prevention tools to detect and prevent unauthorized access to CRA systems and block malware. During online transactions we ensure that all sensitive information is encrypted —or scrambled—when it is transmitted between your computer and our Web servers. Controls in place to protect our data from external threats include network and host security systems like corporate firewalls, anti-virus software, intrusion detection and prevention measures, and identity and access management controls.

CRA employees must use approved levels of encryption on all removable devices (such as USB storage media) and when transmitting private information externally to authorized recipients. Personal storage devices are not authorized to be connected to the Agency's network and are not permitted on CRA equipment.

Network components such as servers and routers are stored in secured and locked rooms or cabinets, accessible only to authorized personnel. Agency networks and workstations are equipped with malware and virus detection and removal software which are updated daily and protect the CRA environment from increasing threat of malicious code and viruses. At the CRA employee level, computers are secured with a suite of security products ranging from anti-virus software to host intrusion software. Malicious or potentially malicious internet sites, email (e.g. spam) and email attachments are blocked to ensure the CRA's environment remains secure. All software used by the CRA undergoes a rigorous certification process which must meet our strict standards for security.

For more information about the controls in place at the CRA to protect data from external threats, go to Access online services safely.

Internal controls to ensure privacy and security

The Canada Revenue Agency (CRA) is proud of its reputation as a leading-edge organization committed to excellence in administering Canada's tax system. However, inappropriate or fraudulent activity can occur in the workplace. The CRA has incorporated a broad array of checks and balances to ensure that those who access your information are strictly limited to employees required to do so as part of their job, and to detect misconduct in the rare instances when it occurs.

Monitoring of employees' access to taxpayer information is centralized, ensuring an independent process that enables the CRA to detect and address any suspect transactions in our systems. This provides assurance that authorized users are accessing only the applications and data they are allowed to access based on our business rules

The CRA's Internal Fraud Control Program uses a strategic approach to managing the risk of internal fraud by preventing fraud where possible, detecting fraud when it occurs, and fostering a heightened level of deterrence in the CRA. The program is an important component of the CRA's Integrity Framework and contributes to the range of compliance-based activities that detect and deter fraudulent and unethical behaviour.

The CRA has also strengthened its internal audit processes for small and medium-sized enterprises by creating, in 2013, Business Intelligence and Quality Assurance units. This measure further strengthens the integrity of the CRA's internal processes by segregating the duties of auditors during the audit process to ensure strong independent oversight and review of actions taken on a file, and quality control of the files audited. No one auditor can carry an audit file from start to finish. Similar processes are already in place for audit processes pertaining to large corporations.

In addition to the current personnel screening for appropriate security clearance, additional verifications are also conducted for individuals who hold or apply for positions that require a high degree of public trust.

As you can see CRA is doing everything it can to ensure the safety of your data online, and that only yourself, or those you authorize, have access to that information. While nothing can be 100% secure online, it’s good to know our government agency that controls our tax information is doing everything it can to protect that data.

Reduce Liability Risks for Your Small Business

By Randall Orser | Small Business

Operating your own small business can be freeing and exciting. It can feel very good when you go your own way and make your own way, and if you do it right, your future could be unlimited.

Sadly, for the small business owner, there are those that want a piece of the action, so businesses are frequently the target of frivolous lawsuits. 

The cliché, an ounce of prevention is worth a pound of cure, couldn’t be more suitable for lawsuit prevention. Your best bet for dealing with a potential lawsuit is to take the liability risks head on. You have the opportunity to use some things every day to prevent such an occurrence and getting rid of those dangers can go a long way. What can you do to reduce your risk of legal liability? Here are some things you can do.

Research Applicable Laws and Regulations

Before you get your business going research applicable laws and regulations, so you don’t end up regretting it later. Getting caught off guard by the law is never a good thing, and it could put you on the losing side of a lawsuit. As small business owner you need to become aware of applicable laws and industry regulations and ensure you meet them to the letter, if not the spirit.

Stick to What You Know Best

As business owner, you end up doing it all, especially at the beginning, however approaching unfamiliar tasks or working on something you’re not qualified to do increases the risk of an accident and the potential for a lawsuit. Find people with the necessary skills, and delegate those tasks to them, which costs more upfront, however, in the end will probably save you much more.

Get It in Writing

The days of the handshake over a deal are long gone. In whatever endeavour you’re doing, you need to get it in writing with a contract, however don’t get sloppy and pay attention to the paperwork ensuring you get legal representation for any contract you write, or sign. Yes there is an initial cost for using a lawyer to draw up contracts, but this could end up stop potential lawsuits later.

Hiring and Firing Staff

Your small business can be at risk when hiring the wrong people, or even firing unsuitable employees. Staffing decisions are a regular target for lawsuits, which you may not have the wherewithal to defend. You need to be extra careful when hiring new people for your small business, and even more vigilant when letting them go. You need to document everything when it comes to employees: tardiness, insubordination, errors, etc., in every step of the warning and termination process.

Not Engaging with Customers

As a small business owner, you need to engage with your customers otherwise you’re heading for trouble. Customer complaints are something you definitely need to address as it’s not only bad for business but could fend off future lawsuits. You should be engaging with your customers on a regular basis via social media, your website, email, or in person, in order to preserve good relationships with your customers.

Lack of Insurance

Too many business owners are running their business with too little or no insurance and that’s highly risky. You need to understand your insurance needs and the risks that you are taking, analyze your situations all the time. For those about to start a new business venture, talk to an insurance agent familiar with your industry or a lawyer to determine possible risks and how to address them.

While running your own business can be very satisfying and profitable, you need to recognize your risks, and be ready for them. Small business are usually targets for legal action, just being a small business could put you at risk. Nonetheless, you can do things to reduce your liability risks inherent in your industry, and the above tips can help you.

Large Refund, You’ve Just Paid Too Much

By Randall Orser | Personal Income Tax

Another tax year’s been filed, and you’re excited as you’re getting a huge refund again this year. That’s great! Or, is it? A large refund is really saying you’re not managing your money as well as you probably could. Financially, getting a refund every year may be doing more harm than good. Wouldn’t you rather get that money on each pay cheque, rather than in one lump sum? Hopefully, after you read this you’ll talk to your human resources department, tax preparer, and your financial planner.

What Does That Large Refund Mean?

What you’ve basically done when you get a large refund is loan the government your funds for a whole year without any interest. Why would you do that? You probably wouldn’t loan a friend or family member money without interest, but you give it to the government. Just think of the ways you could use that large refund, even if it’s only $2,000, you could put that money into an RRSP, or TFSA. Or, invest it into non-registered investments to make some additional cash. 

What Should You Do Instead?

If you’re finding that large refunds are a way of life, then you need to figure out what to do so you don’t get those large refunds. The first thing to do is talk to whomever is in charge of payroll at your work: boss, payroll preparer, human resources, etc. 

Get a copy of Form TD1, Personal Tax Credits Return, and go through each section and fill in amounts that apply to you. The TD1 form used to determine the amount of tax to be deducted from your employment income or other income, such as pension income. The payroll person, or your tax preparer, can help you figure out the amount of tax exemptions for which you qualify, and fill out the form. You should do a new TD1 each year.

If you find that your tax situation has changed during the year, you can update the TD1 at any time. Many things could change during the year, such as a marriage, divorce, children aging out of credits or going off to college, which could cause either a balance owing or a large refund.

Now What?

You’ve talked to your payroll department, and made the changes to your TD1. You will start to see an increase in your pay cheque as less tax is coming off. The amount won’t be huge; however, you need to look at the overall view. This is where things can get interesting. Figure out how much extra you’re getting on each pay cheque, and setup a new direct deposit with work for that much to go into a savings account (or even a TFSA). If you can’t do that through work, then an automatic transfer into a savings (or TFSA) account will work too. Whether the amount is $20 or $100, do this each pay, and watch your savings grow.

Getting that large refund at tax time, is not necessarily a good thing, especially if you’re using to pay certain bills that come due at that time, such as property taxes. You’re much better off taking that money for yourself each pay cheque, rather than giving it to the government interest free.

Can Your Business Handle an IT Disaster?

By Randall Orser | Small Business

High-profile hacks are in the news a lot lately and you’re understandably on edge about your internal data being compromised. You need to protect yourself from both external and internal attacks, however, you could still lose your data in a non-virtual way as well. Your disaster plan needs to account for both physical and virtual threats.

Virtual Threats to Data

Ransomware

This is the newest online threat to businesses and it’s taking over from most other threats. Since 2013 when CryptoLocker exploded on the scene in 2013, ransomware has become epidemic, ultimately costing an estimated $75 billion loss to small business due to downtime and the ransom payment total in the hundreds of millions of dollars in 2016.

Ransomware is where someone forces a business to pay up or lose their data forever. This is accomplished by getting you to click on an email attachment or a link that leads to a site that pushes ransomware code through your browser. Your key files (documents, audio and video) are quickly encrypted with a password that is basically unbreakable, and the criminals demand payment, sometimes more than one, to unlock it. Of course, you’re assuming that the criminals keep their word after receiving payment, most don’t.

Even Apple users are not protected from ransomware like other viruses and malware. KeRanger was the first such attack on Macs, which popped up in 2016. While these kinds of attacks are rare on Apple computers, there’s still a chance that one can get through by using a scripting language like JavaScript.

Loss of Access to Cloud-Based Data

Cloud storage (basically someone else’s servers) are an amazingly beneficial way to share data between users and devices, however, you are relying on another organization to keep your data secure and available. The attack on Dyn that happened in 2016 caused Reddit to be down for a good portion of the day, so there’s no guarantee that cloud- based data will always be available 100% of the time. These attacks could also lead to data compromise or loss, too.

Physical Threats to Data

Theft and Loss

The actual theft of physical equipment is pretty tough to pull off, but it’s not impossible. Generally, as devices get smaller, they’re more vulnerable to theft as well as someone just losing them. Surprisingly, the theft of laptops and small items like USB sticks is common.

Fire

Fire is an obvious hazard, however, it’s usually how that fire is put out that is the secondary hazard, and usually the worst. Server rooms today come with special fire suppression systems that seal the room and deprive it of oxygen, but the rest of the building it just the same fire sprinklers as anywhere else. These old-fashioned fire sprinklers are going to ruin any devices that might be under them when they go off.

Natural Disasters

The location of your server facility could be a big threat to your equipment due to a natural disaster, and that needs to be taken into account. For example, California there is that possibility of the “big one” happening and that must be in the back of your mind. As well the Gulf Coast, where the warmer months mean watching for hurricanes and coastal flooding. Remember Katrina?

The Solution

There is no ‘one size fits all’ solution but there is one approach that you should definitely work into your disaster plan, and that’s having backups of your local data as well as what’s in the cloud. You want a ‘snapshot’ system that backs up most, if not all, of your IT infrastructure, which makes automatic backups at frequent intervals, every few minutes is best. With this system, you can quickly restore your business back to functioning if you’re ever hit with a data loss.

Do You Look at Your KPIs?

By Randall Orser | Small Business

What is the purpose of your business?  What do you need to do absolutely correctly in order for you business to succeed?  What are the activities that you absolutely cannot screw up without losing significant amounts of business?

These questions are answered by examining your Critical Success Factors or CSF’s.  Critical Success Factors are defined as those activities that a business undertakes that allow it to succeed.

It’s more than just the numbers on your financial statements.  Some CSF’s relate to measures of quality, customer satisfaction, and how efficiently you are using your resources.

However, before you can do any analysis on your company’s Critical Success Factors, you need to examine your business strategy.

Ask yourself the following questions: Why is my business better than my competitors’? What do my customers tell me that they like about my business? What don’t they like? What action could I take that would make my customers go elsewhere?

Note that two of the four questions relate to your customers’ perception of your company, not your impressions on what they think.  It’s an important distinction as your customers may have a very different view on you and your business than you think.  How do you know what your customers think?  Ask them!  Set up a procedure where they are asked to fill out a feedback form when they purchase your product or service.  Ask them what they like and don’t like.  Ask why they might choose to shop elsewhere.  Ask what you are doing well and what you could be doing better. You may be surprised by the results.

The answers to the four questions above give you a list of those activities that you need to make sure your business is doing regularly and consistently.  Review your list.  You will most likely find that the items on it relate more to your customers’ perceived value in your product or service, not just its cost.  Companies that compete only on cost will always suffer in the long run as there will always be someone else that can do it cheaper. 

Now that you have defined your Critical Success Factors, you need to be able to make sure you are on track.  But how to measure them, especially when some are non-financial?

The measurements of Critical Success Factors are called Key Performance Indicators or KPI’s.  To recap the jargon, Critical Success Factors are things your company must do to thrive, and Key Performance Indicators are the measures of those things. 

Here is a typical list of Critical Success Factors:

Personal service-making sure the customer gets to speak with a staff member when the purchase is made.

Product quality-making sure the product does what you say it will do and is durable.

Quick problem resolution-making sure all customer complaints are handled quickly and in a manner that impresses the customer.

Same-day shipping-making sure that your product gets shipped out to your customer the day the order is received.

All four of these CSF’s can be measured, even though some of them are non-financial.  

Those are some of the ways that non-financial indicators can be measured and tracked.  Once the measures have been determined, it’s important to set your expectations to measure against.  For example, if your target is to ship 100% of your products same-day, then you would gauge the actual against the standard (100%).

What would happen if your Key Performance Indicators start to slide?

Let’s say you’ve been tracking your key performance indicators for months and this month, several of the indicators seem to show problems. What do you do?

When this happens (as it inevitably will), you need to discover the source of the problem.  A business could face many problems that would impact its key performance indicators including employee illness, cash flow crunch, breakdown in processes, and inattentiveness to customer needs.  If the problem is short term, such as employee illness, there is no need to take drastic action.  However, you will want to see if there is a way to make your operations less vulnerable to the illness of a single employee.

If the problem seems to be in the underlying processes, it’s time to put new procedures in place to make sure the critical success factor is being met.  Have there been changes in the external business environment?  New competitors in the industry?  Quality control problems with the inventory?  These are all situations that need a rethinking and reformulation of your business plan.  If you can see the icebergs, you will have a much better chance of being able to steer around them.

How do You Measure up on Making the Hard Decisions?

By Randall Orser | Small Business

Running your small business can be one demanding enterprise. Your dilemma is that you have control, but that is both a blessing and a curse. You have the joy of deciding how your company grows and develops, but you are also answerable for everything that happens, good or bad. If you let it, this kind of pressure can douse the flames of passion. You can make things mentally and emotionally easier for you to deal with by using the following in your approach to decision-making.

Limit Your Options

The old adage analysis paralysis can easily set in. That’s why you should look at having your offers have as few options as possible. The more choices the customer has to decide on then the less likely they are to make any choice at all.

The more options you have available to you, the harder it will be to take a path. Your best bet is to limit options is to raise or refine your standards. The more specific your needs or desired outcomes, the less options you’ll have to pick from.

Use Your Numbers

Not sure which way to go, then your best to approach the issue objectivity. Rather than just go with your gut, check your numbers. Focus on the measurable metrics and forget what isn’t quantifiable. 

While this can take more time and slow down your decision-making process, it also makes your decision more tenable as well as improving the quality. As an example, you have two manufacturers to choose from and it’s a hard choice, however, go to the numbers and which one gives you a better deal when it comes down to brass tacks.

Think Long Game

Fear is one of the biggest barriers to quick decision making. The idea that your business can be hamstrung by a single mistake is a common one, fortunately it’s not an accurate one. Although a single mistake can hurt, it’s not the death knell you may make it out to be.

Some decisions won’t always expose their true nature early on. What’s working now for your small business won’t necessarily work in the future. On the other hand, that bad decision you make today that negatively affects your business may not necessarily do so in the future. Don’t focus too much on your mistakes or their immediate effects. They’re not necessarily representative of how things will turn out.

Manage Decision Fatigue

Nothing withstands constant pressure. Exercise one muscle frequently in a short period of time, and it’ll fatigue, no matter how strong it is. The same effect happens on your brain when making a lot of decisions, fatigue. Deciding what to have for lunch, which is a simple choice, can add to the barrage of stress bearing down on your brain.

By delegating those small-impact decisions to other people can keep that stress at bay. You need to focus on the big decisions. If you can reduce something to a habit or pattern, do so. Save your energy for important choices.

Not Your Problem

You can easily miss the forest for the trees when you’re deep in the woods, and that’s where you’re at when trying to solve your own problems. Especially challenging decisions can leave you lacking perspective. Taking a step back and removing yourself from the situation can be the best thing to do. Pretend it’s not your problem.

If you had a friend facing this decision point, think about what advice you’d give them. That seems silly but pretending that it’s someone else’s problem to resolve can jar your mind enough to recover your perspective.

You must nurture decisiveness as it’s a key trait to decision making. You won’t be able to run your business if you can’t make decisions quickly. It will take a lot time, practice, and effort, but it’ll be worth it if it makes you a leader who can make choices without freezing.

Seven Things You Need to Look at for Financial Success

By Randall Orser | Small Business

You’re a small business operator, managing your business by the bootstraps -- literally! Money is tight, your expenses are on the rise and your competition is nipping at your boots.

Maintaining a thriving business is challenging enough but advancing it may seem downright impossible. One important way you can conserve your resources is by employing multiple money-saving strategies. We’re serving up seven, each designed to help you come to grips with your bottom line.

Just ask

That 13.4 percent rate you’re paying on your business credit card has you losing sleep. Get some sleep after you contact your credit card issuer and ask for a lower rate. You just might get it. You can do the same with your telecommunications company and with any other business that offers rate flexibility.

Share your office

Perhaps you have more space for your business than needed. You may not be able to get out from underneath a lease, but your landlord might allow you to sublease part of your office to someone who can share some of your expenses. An empty cubicle or back office might be desirable to a freelancer who works at home.

Freeze or cut your salary

When things are tough, cut back on what you pay yourself. Then tell your team what you did. Don’t expect your team to offer to do likewise, but they might step up their game in appreciation for you taking a hit on behalf of the team.

Get rid of your merchant account

You’re paying high fees and had to buy or lease equipment for your merchant account. Get rid of that account and use online PayPal instead. Avoid statements and monthly fees, paying a flat rate for each transaction instead.

Buy online

Shopping online can yield big savings, but you need to carefully find the right suppliers to serve your needs. Online shopping typically offers two other advantages: no payment of sales tax and free shipping.

Use independent contractors

Before you consider hiring an employee, use independent contractors to do the work for you. Keep you overhead costs low by outsourcing your accounting, advertising, website and marketing needs to people who charge a flat rate or by the hour.

If possible, barter

Exchange goods and services with a company without exchanging cash. Find a business that needs your service and likewise, developing an even plan to exchange services. Read CRA Interpretation Bulletin 490(even though it’s archived it still has good information in it) to stay within the good graces of the tax man.

There are other ways for you to cut expenses including joining a business association where members offer each other discounts, reducing your insurance costs, making use of open source software and sharing your advertising costs with another business; though stay away from ‘free’ accounting software as it’s just not worth it. With a mind to save, you’ll find savings in virtually every area of your business, money that will benefit your financial statements.