Category Archives for "Budget"

Your Marketing Budget Needs to Include Content Marketing

By Randall Orser | Budget , marketing strategy , Small Business

Managing a budget is probably the biggest issue that any business faces. Spend too little, and get nowhere. Spend too much and you may go bankrupt before building up a steady income. As a small business, you need to accommodate content marketing into this delicate balance act you call a budget.

Content Promotes Engagement

It’s pretty hard to talk back to a sale, however, interacting with a great article is much easier. Today’s internet is all about creating a community, and if your site is all about prices and sales, that doesn’t really encourage engagement or return business.

That’s not all though. Your content can help with interaction with industry leaders as it gives you something to talk about with them. By doing this, you increase your network and boost your reputation, following which makes your content marketing more powerful.

Affordability Compared to Other Forms of Marketing

Content marketing is much less expensive than say print or television marketing, and that’s good news for the small business. Even if you’re not making the content in-house, you’ll still save a lot as most of your expenses will be social media marketing costs. If you have an established page or website, you may not even have to spend that much.

Branding Through Great Content

Astute marketers believe that content marketing is like releasing business cards into the wild. Each video, article, or post that you put out there with your brand has a direct impression on how you and your business are recognized. Your content has to be of a consistent quality, and distributed consistently, for you to improve your brand.

As a small business, you can benefit from this. Getting noticed and respected in your industry is one of the most difficult tasks. Having well-researched and readable content can definitely help you get your foot in the door.

Lead Generation and Sales

The issue with advertising is that today’s modern customer is that they’re extremely aware when you try to just sell to them. Most consumers today just tune out your advertisement, except if they’re ready for your offering. Content marketing approaches the problem on two levels. First, a strong video or article can bring about the likelihood of your advertisement working. Second, it can replace your need for an advertisement by developing leads and sales on its own.

Content Marketing is Huge for Site Traffic

Creating your website is fairly easy. You can pay someone to do it for you (probably the better choice), with you focusing on setting guidelines. The hard part is getting people to your site. Even with great Search Engine Optimization (SEO), you may find it hard to get traffic.

This is where content marketing can help by giving viewers another opportunity to find your site. It’s not just search engine traffic, content allows your users a chance to discover you on YouTube or whatever social media site you share on. Actually, using Facebook Ads to share your content through targeted ads can gain you clicks by virtue of making users feel the content was created for them.

Are you ready to embrace content marketing? Are you wondering how it can improve your standing? There’s only one way to find out and that’s by setting aside some money in your budget for content marketing. You’ll want to get into it soon, before everyone else finds out just how valuable it can be.

Six Growth Initiatives to Help Build a Long-term Business Strategy

By Randall Orser | Budget , Business Income Taxes , Small Business

Building a profitable business is much more than launching a website and hoping for the best. The smart entrepreneur realizes he needs a plan, and a long-term one at that. Growth initiatives are definitely part of a premiere business strategy. Thinking about challenges and opportunities that could come up allows you to stack the odds of success in your favour. Here are six growth initiatives you should think about adopting in your business plan.

Managing Operating Costs

If you’re not watching your operating costs, they can get quite out of hand and quickly. You’re approving work orders, signing off on supply purchases, and hiring additional staff, which can add up noticeably. You need to have a definite plan together before these operational costs escalate. The profitability of your business greatly depends on you managing your operational costs.

Improving Profitability Ratios

How do you plan on improving profitability over time? Are you expecting reduced supply costs will just generally occur? It is critical that you plan for profitability improvements. Unless you want your revenue-to-expense margins to take a nosedive, you must develop a plan to address ways to increase company profits.

Maintaining Workforce Productivity

Workforce productivity is another key growth initiative that many business owners dread facing. It’s perfectly natural for your employees’ enthusiasm and job performance to slowly wane over time. In order to position your company for success, you need a strategic plan in place to address productivity. You could look at gamification to rewards-based incentive programs to keep your workers engaged and productive.

Inventory Management

To keep your business running smooth, you need an inventory management plan. You could be hurting your business with too much inventory, as well if you have too little; customers may go elsewhere if your inventory is too old, or you don’t have enough to meet demand. You should be prepared for supplier shortages as well as seasonal product demands, so you can ensure your sales don’t take an abrupt dip.

Product Development

To stay ahead of the competition, you need to incorporate product development into your growth initiatives. Realizing that your sales will stagnate if your business never innovates is an essential business truth you need to address. Constructing a product development strategy helps you to remain excited about your business growth opportunities and gives your sales people opportunities to look forward to.

Competitive Businesses

Once your business becomes profitable, you’re going to have competition. You could face local competitors and international knock-offs. Now, you won’t be able to stop the copycats from copying your business, however, you can plan for their arrival. Will you try to buyout your competitors and/or hire their staff? Will you patent your technology? Or trademark certain systems you’ve developed? That old cliché ‘failing to plan is planning to fail’ was never truer than when it comes to your competition. You can deal with potential competitors by having a plan for such a strategy in place.

Putting growth initiatives into your business plans benefits your company’s readiness for success so you’re not blindsided by challenges you should’ve had the smarts to plan for. Your top priority should be to build a company that survives over the long-term. Unless you want a flash-in-the-pan business, you must have a strong growth strategy. Are you ready for the challenges above as you grow your business?

Ensure You Have All Your Medical Receipts

By Randall Orser | Budget , Personal Finances , Personal Income Tax

It’s the digital age, and the government is somewhat getting behind that by allowing us to electronically file our tax returns. However, with that Efile® comes the problem that Canada Revenue Agency (CRA) doesn’t get all your receipts and/or slips like it used to when we paper filed. The number of ‘reviews’ has increased considerably over the years, and one of the big ones CRA reviews is medical receipts.

CRA can do a pre-assessment review of your medical expenses where they ask for your medical receipts before they actually process your return. This usually happens when you have a large amount for medical expenses; that could be $5000 or up.

Then there’s the post-assessment review where they process your return as filed, however, later in the year when CRA has time, they’ll look at medical expenses. This happens when they either couldn’t get to your return pre-assessment, or the amount wasn’t at their threshold at that time.

Either way, you’ll get a letter from CRA outlining what they’re looking at and what they require. Something like this:

Dear Madam:                                                                                    

Re: Income Tax and Benefit Return for 2016

​Account Number         XXX XXX 264

Reference Number      TB1718 6045 7310

We regularly conduct review programs as an important part of the self-assessment tax system. To determine if we have assessed your return con-ectly, we need more information. Please note, if you claimed a provincial or territorial 11011-reftmdableta x credit that corresponds to the federal tax credit

under review, we will review both credits at the same time.

Medical expenses          Amount being reviewed $x,xxx.00

LINES 330 AND 331 OF SCHEDULE 1

To support your claim for medical expenses for self, spouse or common-law partner, and your dependent children born in 1999 or later, and/or the allowable amount of medical expenses for other dependents, please provide the following information, as applicable:

all receipts, forms, and/or other supporting documents or medical certificates;

Receipts have to include the following information:

the name of the patient;

the type of service provided;

the amount and date of the payment for the services provided;

the name of the person who made the payment;

If submitting a pharmacy statement, it should also contain the name of the

controlled drug, preparation, substance, or the Drug Identification Number (DIN).

NOTE: Cancelled cheques and cheque images are not acceptable receipts.

a detailed statement from the insurance company confirming:

the name of the patient;

the date and the amount of the payment;

the name of the controlled drug, preparation;

the kind of medical, paramedical, and/or dental expenses;

the amount that has been or can be reimbursed.

  • indicate the 12-month period used. If a 12-month period is not indicated, we will use the calendar year.
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Should I Invest in my RRSPs now?

By Randall Orser | Budget , Investments , Personal Finances , Personal Income Tax , Retirement

Now is the perfect time to check where you RRSP contributions have been for the year, and where they’ll be in by the end of February. Do you have the room to put more in? Do you have some extra funds lying around? You may want to put the funds in now, and earn some income on them rather than wait until February; plus, you’re beating the rush and not scrambling to get them in by March 1st.

I’m going to assume you know what is an RRSP, and have hopefully checked what your contribution limit is for the year. Does your work have a pension plan? If so, how much have you contributed so far, as that comes your contribution limit.  If you’ve reached your contribution limit, then what about your spouse? You can always put money into their RRSP, up to their contribution limit (they would need to be the contributor and annuitant).

Planning Opportunities

Contribute early in the year. This helps shelter income for a longer period and increases the compounding of the income in the plan. A monthly plan can also be used to help with cash flow.

Use the spousal plan (including common-law spouse) as much as possible to split the income tax upon withdrawal. Remember not to withdraw from any spousal plan until 3 years after the last contribution was made or it will be added to the income of the contributor. Note that it is the timing of the payment of contributions to a spousal RRSP that governs this recapture rule, not when (or whether) you claimed a deduction.

Make your money work for you. Consider other investments within your RRSP, such as mutual funds. Carefully consider what you invest in to maximize your return. (See schedule on page 3)

Utilize “rollovers” (special RRSP contributions). You may find yourself in a situation where you receive a payment which qualifies for special contribution treatment.

These special situations include:

  • Special payments you receive on leaving employment, either in recognition of long service or as damages for loss of office. Note that years of service after 1995 no longer qualify;
  • Lump-sum payments received from foreign pension plans for services performed outside Canada;
  • Lump-sum payments received from a United States IRA and taxable in Canada;
  • Amounts received from the RRSP or RRIF of a spouse, or in some cases, a parent or grandparent, who has died; and • The “cost amount” of shares you receive, directly or through a trust, in a special lump-sum distribution from a DPSP.

The magic of compound interest! Annual contributions of $13,500 at an average interest rate of 8% per annum made at the beginning of each year accumulate over $15,000 more interest in the first 10 years than contributions made at the end of the year. After 25 years, the difference is over $75,000!

The compounding effect of interest earned on the RRSP is clearly demonstrated above by the difference in interest rates. An investment of $13,500 per year at 6% interest per annum grows to $785,111 at the end of 25 years, while the same amount invested at 8% grows to $1,065,885.


Should You Borrow to Finance an RRSP

Interest on money borrowed to make RRSP contributions is not a deductible expense for tax purposes. If you have a choice between borrowing to make an RRSP contribution or borrowing to make another investment, you should always borrow to make the other investment. The interest paid on the investment loan may well qualify for tax deduction and thus offset the cost of borrowing.

Spousal RRSP

A spousal RRSP is an RRSP which names your spouse rather than yourself as the “annuitant” but you have made the contribution. Any amount, which you could have contributed to your own plan under your current contribution limit, can instead be contributed to your spouse’s plan. Contributions made by you to your spouse’s RRSP can be deducted from your income. Your spouse will be taxed when the funds are withdrawn subject to the 3-year rule described in Planning Opportunities above.

Once a cohabitation relationship achieves the status of a common-law marriage under the 12-month or child rule, that marriage is considered to continue until there is a marital breakdown marked by a separation of at least 90 days.

Common-law spouses are included in the definition of spouse and are, therefore, eligible for the spousal plan, although there are still some questions as to how Canada Customs and Revenue Agency will monitor the common-law relationships.

The special rules on spousal RRSPs are very beneficial. Ideally, you and your spouse should have the same amount in your RRSPs at retirement. However, when using a spousal RRSP, you should note that the contributing spouse would be taxed on any withdrawals within 3 years of the last contribution to any spousal plan.

Are You Leaving Canada?

If you leave Canada for an extended period, you must determine whether you are going to become a non-resident for income tax purposes.

If you have withdrawn funds from an RRSP under the Home Buyers’ Plan (you qualify as “first-time home buyers” could borrow up to $20,000 from an RRSP to purchase a “principal place of residence”), and become a non-resident before acquiring your Canadian home, your withdrawals will be disqualified and added to your income in the year of withdrawal. You may cure the disqualification by refunding the withdrawal and cancelling your participation in the plan.

If you have withdrawn funds from an RRSP under the Home Buyers’ Plan and become a non-resident after acquiring your Canadian home, you must repay the entire withdrawal within 60 days of becoming a non-resident. To the extent that you do not repay the amount within 60 days, the unrepaid balance will be included in your income for the period of the year in which you were still a resident of Canada and taxed accordingly.

Now is a great time to review your RRSP, and what you want to accomplish with it this year. Think about all that money you’re missing out on by not investing now, and waiting until January or February of next year. That’s a missed opportunity, and that’s just sad.

Are You Having a Baby? 

By Randall Orser | Budget , Personal Finances , Personal Income Tax

Congratulations! If you are a new parent, or about to be one, there are some things that can benefit you tax wise when having children. Children can be expensive to raise and the government recognizes this and gives parents different tax credits and benefits to somewhat offset those costs.

If you are a single parent, then you can claim the child as equivalent to spouse, which gives you an additional $11K non-refundable tax credit.

Apply for child benefits

With the Automated Benefits Application (ABA), you can automatically apply for child benefits when registering the birth of your new baby. If you live in a province that has ABA and give your permission, you will automatically be applying or registering for:

  • the Canada child benefit (CCB)– A tax-free monthly payment made to eligible families to help them with the cost of raising a child under 18
  • the goods and services tax/harmonized sales tax (GST/HST) credit - A tax-free quarterly payment that helps families and individuals with low and modest incomes offset all or part of the GST or HST that they pay
  • any related provincial programs – Most provinces and territories also have child and family benefits and credits, which families can receive in addition to the CCB and the GST/HST credit. We won’t get into these in this post as there are just too many of them.

If you live in a territory that does not have ABA, you can apply for child and family benefits using the “Apply for child benefits” service through My Account or by completing and mailing Form RC66, Canada Child Benefits Application to your tax centre.

Canada Child Benefit (CCB)

The Canada child benefit (CCB) is a tax-free monthly payment made to eligible families to help them with the cost of raising children under 18 years of age. The CCB might include the child disability benefit and any related provincial and territorial programs.

The Canada Revenue Agency (CRA) uses information from your income tax and benefit return to calculate how much your CCB payments will be. To get the CCB, you have to file your return every year, even if you did not have income in the year. If you have a spouse or common-law partner, they also have to file a return every year.

Benefits are paid over a 12-month period from July of one year to June of the next year. Your benefit payments will be recalculated every July based on information from your income tax and benefit return from the previous year.

If you want to know if you qualify for the CCB check out CRA’s website here.

GST/HST Credit

The GST/HST credit is a tax-free quarterly payment that helps individuals and families with low and modest incomes offset all or part of the GST or HST that they pay. You no longer have to apply for the GST/HST credit. The Canada Revenue Agency will automatically determine your eligibility when you file your next income tax and benefit return for the 2014 and later tax years.

There are various provincial programs related to the GST/HST credit, which you can check on CRA’s website here. For British Columbia, there is the BC Family Bonus and the BC Low Income Climate Action Tax Credit.

If you have a spouse or common-law partner, only one of you can receive the credit. The credit will be paid to the person whose return is assessed first. The amount will be the same, regardless of who (in the couple) receives it.

Working Income Tax Benefit

Your baby is considered an eligible dependent, which means you may now claim the working income tax benefit (WITB), or the amount you claimed before might increase. The WITB is a refundable tax credit that provides tax help for working low-income families and individuals. Eligible individuals and families may be able to apply for WITB advance payments, which are paid quarterly. This credit is especially helpful if you are a single parent.

Save For Your Child's Education

It's never too early to start saving for your child's future education by contributing to a registered education savings plan (RESP). Programs such as the Canada education savings grant (CESG) and the Canada learning bond (CLB) are other reasons for creating an RESP for your child. These programs may provide incentives for using an RESP to save for a child's education after high school (post-secondary education).

With the above credits, there is a disability portion if your child is diagnosed with any kind of disability. All the above credits get an increase for a disable child under 18 years of age. Note that the disability must be severe and prolonged impairment in physical or mental functions.

If you are having a baby, then these credits can help with the cost of raising them, and you may as well take advantage of them.


Now’s the Time to Check Your RRSP

By Randall Orser | Budget , Investments , Personal Finances , Personal Income Tax , Retirement

I know, I know, it’s only July, I don’t want to think about tax stuff. However, now is the perfect time to check where you RRSP contributions have been for the year, and where they’ll be in 6 months. Do you have the room to put more in? Do you have some extra funds lying around? It’s not too late to think about a monthly RRSP contribution rather than that lump sum you do in January or February.

I’m going to assume you know what is an RRSP, and have hopefully checked what your contribution limit is for the year. Does your work have a pension plan? If so, how much have you contributed so far, as that comes your contribution limit. If you’ve reached your contribution limit, then what about your spouse? You can always put money into their RRSP, up to their contribution limit (they would need to be the contributor and annuitant).

Planning Opportunities

Contribute early in the year. This helps shelter income for a longer period and increases the compounding of the income in the plan. A monthly plan can also be used to help with cash flow.

Use the spousal plan (including common-law spouse) as much as possible to split the income tax upon withdrawal. Remember not to withdraw from any spousal plan until 3 years after the last contribution was made or it will be added to the income of the contributor. Note that it is the timing of the payment of contributions to a spousal RRSP that governs this recapture rule, not when (or whether) you claimed a deduction.

Make your money work for you. Consider other investments within your RRSP, such as mutual funds. Carefully consider what you invest in to maximize your return. (See schedule on page 3)

Utilize “rollovers” (special RRSP contributions). You may find yourself in a situation where you receive a payment which qualifies for special contribution treatment.

These special situations include:

· Special payments you receive on leaving employment, either in recognition of long service or as damages for loss of office. Note that years of service after 1995 no longer qualify;

· Lump-sum payments received from foreign pension plans for services performed outside Canada;

· Lump-sum payments received from a United States IRA and taxable in Canada;

· Amounts received from the RRSP or RRIF of a spouse, or in some cases, a parent or grandparent, who has died; and • The “cost amount” of shares you receive, directly or through a trust, in a special lump-sum distribution from a DPSP.

The magic of compound interest! Annual contributions of $13,500 at an average interest rate of 8% per annum made at the beginning of each year accumulate over $15,000 more interest in the first 10 years than contributions made at the end of the year. After 25 years, the difference is over $75,000!

The compounding effect of interest earned on the RRSP is clearly demonstrated above by the difference in interest rates. An investment of $13,500 per year at 6% interest per annum grows to $785,111 at the end of 25 years, while the same amount invested at 8% grows to $1,065,885.

Should You Borrow to Finance an RRSP

Interest on money borrowed to make RRSP contributions is not a deductible expense for tax purposes. If you have a choice between borrowing to make an RRSP contribution or borrowing to make another investment, you should always borrow to make the other investment. The interest paid on the investment loan may well qualify for tax deduction and thus offset the cost of borrowing.

Spousal RRSP

A spousal RRSP is an RRSP which names your spouse rather than yourself as the “annuitant” but you have made the contribution. Any amount, which you could have contributed to your own plan under your current contribution limit, can instead be contributed to your spouse’s plan. Contributions made by you to your spouse’s RRSP can be deducted from your income. Your spouse will be taxed when the funds are withdrawn subject to the 3-year rule described in Planning Opportunities above.

Once a cohabitation relationship achieves the status of a common-law marriage under the 12-month or child rule, that marriage is considered to continue until there is a marital breakdown marked by a separation of at least 90 days.

Common-law spouses are included in the definition of spouse and are, therefore, eligible for the spousal plan, although there are still some questions as to how Canada Customs and Revenue Agency will monitor the common-law relationships.

The special rules on spousal RRSPs are very beneficial. Ideally, you and your spouse should have the same amount in your RRSPs at retirement. However, when using a spousal RRSP, you should note that the contributing spouse would be taxed on any withdrawals within 3 years of the last contribution to any spousal plan.

Are You Leaving Canada?

If you leave Canada for an extended period, you must determine whether you are going to become a non-resident for income tax purposes.

If you have withdrawn funds from an RRSP under the Home Buyers’ Plan (you qualify as “first-time home buyers” could borrow up to $20,000 from an RRSP to purchase a “principal place of residence”), and become a non-resident before acquiring your Canadian home, your withdrawals will be disqualified and added to your income in the year of withdrawal. You may cure the disqualification by refunding the withdrawal and cancelling your participation in the plan.

If you have withdrawn funds from an RRSP under the Home Buyers’ Plan and become a non-resident after acquiring your Canadian home, you must repay the entire withdrawal within 60 days of becoming a non-resident. To the extent that you do not repay the amount within 60 days, the unrepaid balance will be included in your income for the period of the year in which you were still a resident of Canada and taxed accordingly.

Now is a great time to review your RRSP, and what you want to accomplish with it this year. Think about all that money you’re missing out on by not investing now, and waiting until January or February of next year. That’s a missed opportunity, and that’s just sad.

Save Your Small Business with Five Money Measures

By Randall Orser | Budget , Small Business

Your business needs money in order to thrive. If capital is insufficient, your business goes under. If your business is not able to make money, then it ceases operations. The fact is that you need to handle your money accordingly for your business to flourish. Cash is king, and the practices below will allow you to take good care of it.

Monitor Accounts Receivables and Accounts Payable

At its essence, a successful business hinges on it making more than it spends. As long as your income is greater than your expenses, you’re making a profit. Your Accounts Receivable are those customers that owe you money, and your Accounts Payable are the suppliers that you owe money, and you need to watch these two very carefully. By not watching the money owed to you and that owed by you, you’re ignoring the essence of business, and you could fail.

Margins are low for most small businesses, so you need to give yourself breathing room as well as take risks to outsmart your competition. That means you need to watch your cash flow so you’re never put yourself out on a limb, and can’t meet payroll or produce your product or service. Always collect your receivables on time, and never let anyone get over your terms, and you’ll have a better picture of what monies are available.

Multiple Streams of Income

Your small business has a collection of devoted customers, which feels awesome, and means a steady income stream, so you can support your plans. Counting on just this small group of devoted customers could end up disappointing you in the end. It’s like a sand castle at the beach, the water eventually comes up and brings it down. Your clients could change their mind at any time and not renew their business with you.

Your best bet is to always be marketing. Don’t just sit back and rest, you need to keep marketing and finding new clients. This doesn’t mean a new product, however, revising your product or service or adding value to what you’re doing now may help. You could look at product or services you could add that are compatible with your existing ones. In the online marketing world, it’s all about the upsell (to try to persuade a customer to buy a more expensive item or to buy a related additional product at a discount), and that’s something you may want to do too. Your safety net is always looking for new clients, that way if your current client base wavers, it won’t bring the entire business down.

Always Be Bootstrapping

When you start out you’re usually not buying things, or paying more than you have to for the items you need in your business. This shouldn’t really stop, though don’t become what I call ‘stupid cheap’. That’s where you are so cheap it hurts the business. That said, spending more than you have to on materials or staff, gives you less to spend in other areas, such as marketing. This wrong spending will ultimately have you questioning what happened.

One area you are probably paying too much is income taxes. Are you keeping all your business receipts? For any expense you claim, you must have a receipt, no exceptions. To learn about what you can and cannot deduct, talk to your bookkeeper or accountant, and if you don’t have one then you need to get one. If you put the effort in now, you won’t end up paying over again for the things you bought for the company. Your bookkeeper/accountant should understand your company, and how it works.

Another thing you probably spend on is office equipment, and this turn into a money waster fast, especially technology. Do you really need that expensive desk? Or that advanced computer? Probably not. Standing desks are great, and I do have one. However, does everyone in the company need one? That can get expensive. As I said before, don’t be ‘stupid cheap’, however, don’t go crazy either and spend on things you don’t need.

Know Your Cost of Goods Sold and Profit Margins

Your products cost money to make, deliver, and store them. This is your cost of goods sold or COGs. Your COGs are all the expenses vital to make your product that you sell. COGs aren’t just how it’s produced, but include labour, customer conversion costs, and more. The goal is to keep this number low, so when you sell you make a profit.

You don’t want to go too low on your costs, as your product quality will suffer. Your COGs are a mix of art and science. The art is in determining what people will want, and what they’re willing to pay. The science is in determining where to price it. Your pricing needs to be fair and steady. In order to compete, you must know all facets of your product’s cost, and if you do then you’ll better manage your money.

Time is Money

You can actually save, or even make, money by outsourcing work, projects, even hiring cleaners. Successful businesses outsource what they can, and as a business owner you should too; look at your weaknesses and hire for those. As they say, time is money, and wasted time is money gone. You’re not bringing in cleaners just to keep the office clean, but to lessen your employees’ stress of having to do it. If you’re employees are having to clean, then they can’t spend their time and energy on the work that needs to be done.

This works for allocating tasks, too. A sick employee is not as productive as a healthy one, so they end up costing you money. Burnout is a major cause of many employees getting sick, or worse, leaving a company. Share the load and save yourself money in sickness and turnovers. The Japanese even have a word for death from overwork called 過労死 (Karō shi). Your business is important, but don’t let it kill you or your employees.

Is this everything to keep in mind about managing your businesses money? No, but it is a step in the right direction. Always be proactive when it comes to keeping your numbers high, being reactive just gets you into trouble, especially when it comes to money. Don’t wait for the problem to be big enough to grab your attention, as you may be too late. Take control now, and these headaches won’t happen to begin with.

Kill Your Dream Faster with These Five Mistakes

By Randall Orser | Budget , Consulting , Freelancing , Home Based Business , marketing strategy , Small Business

How many dreams die because of a mistake? As an entrepreneur, you’re going to make mistakes, maybe learn from them, however, you don’t have to be learning from mistakes. Yes, you remember better from mistakes, but you can learn better without having to throw away months of hard work.

Forgetting Profit

Emotional rewards abound from starting a business. Being the boss of the whole thing is a great freedom, and isn’t that why you started in the first place. As Harry Truman said, ‘The buck stops here’, and that’s a great feeling. Your emotional rewards are definitely important, however, don’t get stuck on those alone as you can’t survive on joy and contentment.

Not taking into account profit of your business, can kill your dreams faster than anything. Wanting more out of your business than profit is great, and that emotional connection is needed. That said, you’ll doom the business if it’s not making money (profit). You need a business plan that helps you make money, so you can run your business, and sell your product or service.

Doing it all Yourself

A business is a many armed beast, you can’t do it all, and can’t be everywhere. Let’s face it, we all have our weaknesses, and need to think where we fall down. Are you good at marketing? What about the numbers side of things? Figure out your weaknesses find people to work them, do what you can’t and be where you’re unable. Delegation is a big key to running a successful business, otherwise you’ll kill it.

Is your venture meant to expand? Not all are, depending on your offering, or your desires. In such a case, doing it all may be okay, if you’re going to stay small.

Misjudging Demand

As an entrepreneur, you probably understand if no one buys, you don’t make money, but that’s as far as your understanding may go. Many businesses get caught up on one person buying, which proves that someone wants it, but a successful company is not made on one client.

As an entrepreneur, misjudging the number of prospective clients is the biggest mistake you can make. That’s more than just miscalculating future revenue; it’s misunderstanding your businesses viability. Once you have your product or service idea, think about your ideal client who’d buy it before even producing said product or service. You don’t want to waste time or resources because you had to change direction halfway. Think about pre-selling or crowdfunding as a way to get interest, and have some startup money.

No Unique Selling Proposition

A great product is pointless, and not a determining factor in your businesses success. Competition is fierce nowadays, and doing the same thing as you, so to get your market’s attention you need a Unique Selling Proposition (UPS), which shows how your product or service is unique from everyone else’s. You need on for each product or service you sell. Apple and Samsung are good examples. Their smartphones have comparable performance, but different in the apps available, how their app stores are setup, to how they work with other devices. Apple’s real difference is their ecosystem, which most others don’t have.

The days of jumping into an industry, and putting out your product or service are gone. You need something to urge customers to leave their existing supplier and come over to you. You can’t compete if you don’t have something unique to offer. That could be something as simple as a pickup service or drop off service.

Your Accounting Sucks

Everything has a cost. Especially when it comes to finding a business location, as you may have to focus on one area over another, or be home-based at the start. Money & time are one of the more literal and direct costs of your business. Under-funding is one of the biggest startup killers. Remember, if you don’t have money you can’t work your business.

You need room to breathe, whether it’s your plan, or your estimates. More than likely, it’ll take longer than expected, and cost more than you thought. Keep yourself safe by overestimating (being conservative).

Entrepreneurship is risky, even if it’s done perfectly. You may be strong in your way, but some errors will kill your business. You don’t need to see your business crash and burn to learn from those mistakes. Do your due diligence before you start, and you’ll succeed.

Home Accessibility Expenses 

By Randall Orser | Budget , Personal Finances , Personal Income Tax , Retirement , Small Business

For the 2016 tax year, the government added Home Accessibility Expenses. This a non-refundable tax credit for those expenses you incurred to make your home more accessible for yourself, or a spouse, a parent, or a child that you care for. Whomever the expenses are incurred for, they must either qualify for the Disability Tax Credit, or be over 65 years of age. This being a non-refundable tax credit, it must be used in the year the expenses are incurred, and cannot be carried forward.

Are you eligible?

You can claim an amount for the eligible expenses for a qualifying renovation of an eligible dwelling, if:

  • you are a qualifying individual; or
  • an eligible individual making a claim for a qualifying individual.

A qualifying individual is:

  • an individual who is eligible for the disability tax credit for the year; or
  • an individual who is 65 years of age or older at the end of a year.

An eligible individual is:

  1. a spouse or common-law partner of a qualifying individual; or
  2. for a qualifying individual who is 65 years of age or older, an individual who has claimed the amount for an eligible dependent (line 305), caregiver amount (line 315) or amount for infirm dependents age 18 or older (line 306) for the qualifying individual, or could have claimed such an amount if:
    • the qualifying individual had no income;
    • for the eligible dependent amount, the individual was not married or in a common-law partnership; and
    • for the amount for an infirm dependent age 18 or older, the qualifying individual was dependent on the individual because of mental or physical infirmity.

OR

  1. If (2) does not apply, an individual who is entitled to claim the disability amount for the qualifying individual or would be entitled if no amount was claimed for the year by the qualifying individual or the qualifying individual's spouse or common-law partner.

Do you have an eligible dwelling?

An eligible dwelling is a housing unit (or a share of the capital stock of a co-operative housing corporation that was acquired for the sole purpose of acquiring the right to inhabit the housing unit owned by the corporation) located in Canada and meets at least one of the following conditions:

  • it is owned (either jointly or otherwise) by the qualifying individual and it is ordinarily inhabited (or is expected to be ordinarily inhabited) in the year by the qualifying individual, or
  • it is owned (either jointly or otherwise) by the eligible individual and is ordinarily inhabited (or is expected to be ordinarily inhabited) in the year by the eligible individual and the qualifying individual, and the qualifying individual does not throughout the year own (either jointly or otherwise) and ordinarily inhabit another housing unit in Canada.

Generally, the land on which the housing unit stands, up to ½ hectare (1.24 acres), will be considered part of the eligible dwelling.

A qualifying individual may have only one eligible dwelling at any time, but may have more than one eligible dwelling in a year (for example, in a situation where an individual move in the year). When a qualifying individual has more than one eligible dwelling in a year, the total eligible expenses for all such eligible dwellings of the qualifying individual cannot be more than $10,000.

What renovations or expenses are eligible and ineligible?

A qualifying renovation is a renovation or alteration that is of an enduring nature and is integral to the eligible dwelling (including the land that forms part of the eligible dwelling). The renovation must:

  • allow the qualifying individual to gain access to, or to be mobile or functional within, the dwelling; or
  • reduce the risk of harm to the qualifying individual within the dwelling or in gaining access to the dwelling.

An item you buy that will not become a permanent part of your dwelling is generally not eligible.

Eligible expenses

These expenses are outlays or expenses made or incurred during the year that are directly attributable to a qualifying renovation of an eligible dwelling. The expenses must be for work performed and/or goods acquired in the tax year.

Work performed by yourself

If you do the work yourself, the eligible expenses include expenses for: building materials; fixtures; equipment rentals; building plans; and permits.

However, the value of your own labour or tools cannot be claimed as eligible expenses.

Work performed by a family member

Expenses are not eligible if the goods or services are provided by a person related to the qualifying individual or the eligible individual, unless that person is registered for goods and services tax/harmonized sales tax (GST/HST) under the Excise Tax Act. If your family member is registered for GST/HST and if all other conditions are met, the expenses will be eligible.

Work performed by professionals

Generally, paid work done by professionals such as electricians, plumbers, carpenters and architects for eligible expenses qualifies. If you're planning on hiring a contractor to do construction, renovation, or repair work on your home, the Get it in writing! website has information that will help you.

Ineligible expenses

The following expenses will not be eligible:

  • amounts paid to acquire a property that can be used independently of the qualifying renovation;
  • the cost of annual, recurring, or routine repair or maintenance;
  • amounts paid for household appliances;
  • amounts paid for electronic home-entertainment devices;
  • the cost of housekeeping, security monitoring, gardening, outdoor maintenance, or similar services;
  • financing costs for the qualifying renovation; and
  • the cost of renovation incurred mainly to increase or maintain the value of the dwelling.

Other factors to consider

Medical expense tax credit (METC)

You may have an eligible expense that also qualifies as a medical expense. If so, you can claim the expense as a medical expense and a home accessibility expense.

Condominium and co-operative housing corporations

For condominium or co-operative housing corporations, your share of the cost of eligible expenses for common areas qualifies.

Other government grants or credits

The expenses are not reduced by assistance from the federal or a provincial government, including a grant, forgivable loan, or tax credit.

Vendor rebates or incentives

Eligible expenses are generally not reduced by reasonable rebates or incentives offered by the vendor or manufacturer of goods or the provider of the service.

Business and/or rental use of part of an eligible dwelling

If you earn business or rental income from part of an eligible dwelling, you can only claim the amount for eligible expenses incurred for the personal-use areas of your dwelling.

For expenses incurred and/or goods acquired for common areas or that benefit the housing unit as a whole (such as a ramp or hand rails), you must divide the expense between personal use and income-earning use.

Completing your tax return

To claim home accessibility expenses complete Schedule 12, Home accessibility expenses, and report the amount from line 4 of Schedule 12 on line 398 of Schedule 1, Federal Tax.

A maximum of $10,000 per year in eligible expenses can be claimed for a qualifying individual. When there is more than one qualifying individual for an eligible dwelling, the total eligible expenses cannot be more than $10,000 for the dwelling. The claim can be split between the qualifying individual and the eligible individual(s) for the qualifying individual. If the claimants cannot agree to what portion each can claim, the Canada Revenue Agency (CRA) will determine the portions.

Supporting documents

Eligible expenses must be supported by acceptable documentation, such as agreements, invoices, and receipts. They must clearly identify the type and quantity of goods bought or services provided, including, but not limited to, the following information, as applicable:

  • information that clearly identifies the vendor/contractor, their business address, and, if applicable, the GST/HST registration number;
  • a description of the goods and the date when the goods were bought;
  • the date when the goods were delivered (keep your delivery slip as proof) and/or when the work or services were performed;
  • a description of the work done, including the address where it was done;
  • the amount of the invoice;
  • proof of payment. Receipts or invoices must show that bills were paid in full or be accompanied by other proof of payment, such as a credit card slip or cancelled cheque; and
  • a statement from a co-operative housing corporation or condominium corporation (or, for civil law, a syndicate of co-owners) signed by an authorized individual identifying:
    • the amounts incurred for the renovation or the alteration work;
    • as a condominium owner, your part of these expenses if the work is done on common areas;
    • information that clearly identifies the vendor/contractor, their business address and, if applicable, their GST/HST registration number; and
    • a description of the work or services done and the dates when the work or services were done.

The Home Accessibility Expenses credit can give you a bit of tax relief if you’ve had to make your home more accessible for yourself or a dependent. Even if you’ve gotten federal or provincial assistance, you can still claim the expenses for this credit.

Paperwork Nightmare Rules

Four Financial Rules To Live By In The New Year

By Randall Orser | Budget , Personal Finances , Personal Income Tax , Small Business

People set ambitious goals when the new year hits, but one of the best goals you can make is to improve your finances and the way you handle them. This article outlines 4 financial rules that you should live by this year.

  1. Save every month

If you do not already have a savings account set up, now is the time to do it. You might have lots of money in your checking account, but it’s a good idea to have a separate account set up specifically for saving. This way you won’t spend it without thinking. You do not have to add every extra penny to the new savings account, but adding a nice chunk to get you started it a good start. It will motivate and inspire you to continue saving. You should also leave a little money to have fun with. Once you have a saving account you can decide how much you will save every month.

  1. Stop indulging so often

It’s fun to treat yourself to things now and then, but if you’ve made a habit out of treating yourself to a $5 coffee every day or a new piece of clothing every time you get a pay cheque, you are overindulging and spending money that you don’t need to be spending. Just because you have money doesn’t mean that you need to spend it. By cutting out three coffees each week, you will save money automatically.

  1. If you want something, save for it

Credit cards have made the need to save seem obsolete. This isn’t the case though. Once your credit card bill comes in, you still need to pay for whatever you bought. If you don’t have the money in your account when you buy the item you want, then it’s better to not buy it. Save up for what you want and then buy it. You’ll appreciate things more when you save for them before rushing out to buy them.

  1. Pay off credit card in full

It’s important to your credit score that you pay off all bills in full and on time. If you tend to forget what you’ve bought and what your balance is going to be when you get your bill, hold on to all receipts so that you can add them up. If you don’t pay off your bills on time, the interest will add up and it’ll be even more difficult to pay off.

Improving the way you deal with money will not only help you this year, but also for life. Good money habits will last you forever.