Category Archives for "Small Business"

Tips to Improve your Brand Strength

By Randall Orser | Employees , marketing strategy , Retail , Small Business

For your business to have a competitive advantage you need to have a brand that is strong and authentic.  It takes a long time and lots of persistence to build your brand but the benefits are worth the work.  A strong brand has advantages inside your company and in attracting customers.

  • If your brand is strong you are more likely to attract the best talent.  Not many job seekers will apply to company that has a bad reputation.
  • Your profits will increase as many customers are willing to pay more for products that they trust and value.  
  • More loyal customers, customers will accept higher prices and will come back for more.  Over 40% of consumers say that brand consistency is important when deciding if they will be a loyal customer.  
  • During an economic crisis consumers will look for a strong brand with a competitive edge over weaker competitors and shareholders are more likely to value the brand's potential.
  • Brand equity will give your company the maximum chance of coming back from any negative publicity.

How can you develop a strong brand?

  • Know what your brand's purpose and passion is and why your business exists, these are the basic building blocks.  You then need to define your ideal customer and what your products can offer them.  Get feedback from your target market and cultivate customer relationships to get their feedback.
  • Create a set of brand identity guidelines that are comprehensive and distributed throughout your company and beyond.
  • It is important that you continually communicate with your customers to make sure that your message is resonating with them.  Your brand message should not change during the life of your company. However it can grow and adjust slightly to suit your audience but it should continue to be something that your customers recognizes.  
  • When you update your logo and marketing materials make sure that your logo remains standard and easily recognizable on advertisements and social media.
  • Always be consistent this will continue to build your brand strength.  Consumers will try something new from you if you are always consistent in your message and product quality.  They are not likely to react well to anything that does not align with the company values and image that they are familiar with.

Creating a strong brand takes a lot of effort and expertise and can only take your business so far.  So it is important to target the right potential customer.  You will never please everyone so target people with similar values and beliefs.  What can you offer that is unique to your company and makes you different from your competition so that you stand out and are able to connect with your customers.

From an article by Justin A Staples

Building Better Business and Customer Service in 2021

By Randall Orser | Business , Employees , Retail , Small Business

In 2021 most businesses are looking for ways to rebound from the disastrous year that was 2020.  As well as dealing with the ongoing Covid-19 crisis, there are many new variables affecting business such as how products and services are offered and delivered which will have an impact well into 2021 and beyond.  There are also other market forces to consider including the impact of big-box stores and being able to offer a fast delivery service that customers now expect.

According to "Go-Daddy" half of the businesses that they surveyed had a website or active social media account before the pandemic hit.  The number has now almost doubled but businesses who want to maintain their market share in 2021 will have to go further and adopt platforms that do everything in one place, sales, email communication and marketing.  When businesses improve their digital systems and at the same time continue to offer top class customer service they are more likely to survive.  This could include using the Canadian platform Shopify so customers can order and pay online, and then offering them the bonus of fast local delivery.  For those businesses who are behind in creating a digital presence they should be thinking seriously about investing in online in 2021.

For those businesses who are wondering how they can compete with the fast delivery service offered by Amazon, or the prices offered by the big box stores the answer is don't.  It is better to work on offering what the big retailers don't - excellent customer service and the personal touch.  Once you have an online platform to offer customers a fast and easy ordering service, expand on that by offering free local deliveries, discounts for in-store pick up, curb-side pick-up, and personalized invitations on key dates such as birthdays and anniversaries.  

To make your customer's experience at your store memorable think about offering little extras such as a hand written thank you note attached to the bag, or a small free gift in the bag such as a chocolate, pen, bookmark, fridge magnet etc.

When you are building your brand it is important to work on earning customer loyalty, not only do you need them to return to your store for more of your products or services but also to recommend you to their friends, relatives and colleagues.  You need to tap into what is important to your clients.  If they like to support their local stores provide them with a branded reusable shopping bag.  Remembering their names and the names of their children will make them feel special.  Encourage repeat customers by offering VIP offers or discounts.  Positive interaction with your clients goes a long way to advertise your business and good service is always appreciated even from a distance.

From an article by iCapital

What Your Tax Accountant Needs to Prepare Your Income Tax Return

By Randall Orser | Business Income Taxes , Freelancing , Home Based Business , Investments , Personal Income Tax , Small Business

A reminder for our business clients

When it comes to income tax preparation, there are do-it-yourselfers and there are those who have their income tax prepared by professionals.

For many businesses, having a professional such as a tax accountant prepare their income tax returns is the most sensible option. We don’t all have time to become income tax experts and income tax mistakes can be costly. So why not hire an expert to get the job done right and cut down on tax time anxiety?

To do the job right, though, your tax accountant or other income tax preparer will need to have all the right tax records at hand – preferably organized. Use this checklist to get your records together for your tax accountant.

Business Records Your Accountant Needs

· Revenue and business expenses for the year

· Business use of auto

· Auto operating expenses

· Vehicle driving log with business kilometres driven

· Asset additions

· Business use-of-home details

Your tax accountant will also need any tax records such as:

· Last year’s Notice of Assessment

· Amounts paid by installments

· A copy of your income tax return filed last year (if you’re a new client)

Other records your tax accountant will need will depend on whether you’re asking him or her to prepare a T2 (corporate) or T1 (personal) income tax return.

If the latter, your tax accountant will need all the relevant information slips and tax-related documents. Here are some of the most common:

· T4 slips (if you have employment/business income)

· T4A commissions & self-employed

· T5013 Partnership Income

· T3 Income from Trusts

· T5 Investment Income

· RRSP contribution slips

· Charitable donations

· Medical and dental receipts

· Child care information

Save Money on Your Tax Accountant’s Fee

Accountants generally charge by the hour, so the harder you make their job, the more it will cost you.

Summarize and tally records wherever possible. Cheques, invoices, business expenses - all should be categorized and totalled. Sort all your information slips by type. Having your tax accountant do the organizing and tallying is the expensive way to go.

If you have several businesses, remember that you will have to have separate revenue and business expenses figures for each business, as business income should be listed by individual business on the T1 form.

Be as organized as you possibly can. For example, clip groups of receipts together by type and put a post-it-note stating what the category is on the top. The less your accountant needs to figure out, the less time she’ll be spending on your file.

And remember, having a tax professional prepare your income tax return(s) isn’t costing you as much as you think when you see the bill – it’s a legitimate business expense.

Small Business Loans for Women

By Randall Orser | Budget , Personal Finances , Small Business

Businesses owned by women account for about 38% of small businesses in Canada and they are the fastest growing segment of entrepreneurs.  Just like other small businesses they need borrowed capital to purchase inventory and other business needs and to grow their business.  Despite the growth traditional funding sources give fewer loans to women than men despite all businesses sharing the same challenges.

Here are some financing tips for women owners that might help them to prepare and qualify for a small business loan.

1.  Do not use your personal credit to pay for business expenses - although many small business owners use their own personal credit to start their business it is not a good long term strategy as the business grows.  While your personal credit might be sufficient to get you started when your expenses are low as your need for capital increases using your personal credit can become a problem and it does not help your company to build it's own strong business credit score.   It is a good idea to open business accounts with companies such as Staples, Home Depot and Lowes to help your business credit score.

2.  Ask your suppliers if they offer payment terms - although this maybe not as good as getting a business loan but in the early stages of your business establishing a strong credit profile with your suppliers will help you to secure a loan down the road.   Many suppliers offer a credit account to their customers and this is one of the best ways to start building a strong credit score, however it is important that they also report your good credit history to business credit bureaus. As this is so important you should always encourage your suppliers to do a report for you.

3.  Look outside your bank - most business owners will try to secure a loan from the bank where they already have their business account or personal account.  Although this seems to make the most sense those banks often have more stringent requirements for loans that new businesses cannot meet.  It makes sense to look into other options for loans from lenders who are will work with younger businesses and measure the health of the whole business rather than the personal credit score of the owner.  One suggestion might be the Business Development Bank of Canada.  Visit the Canada Small Business Financing Program for more information on loans for small businesses.

From an article by Ondeck.

Watch out for Lenders who ask for a Fee Upfront

By Randall Orser | Small Business

If the pandemic has left you in financial difficulties and you are considering taking out a loan there is some  important information that you should know about advance fee loans. Upfront fees on loans are illegal - If you have bad credit and a loan broker offers to secure a loan for you for a $50 upfront fee, it is illegal for a company to do that according to the Canadian Anti-Fraud Centre.  

The Financial Consumer Agency of Canada has some tips about advance fee loans and some red flags to look out for.

  • Don't pay upfront, legitimate lenders do not usually ask for advance fees.
  • Don't fall for promises that you will get a loan regardless of your credit problems.  If you have a poor credit history then it is unlikely that you will secure a loan without paying large fees.
  • Be careful about emails offering you a loan - they are usually scams.

If you have taken out a loan, paid fees upfront and believe that you might have been scammed you need to report it to your local police or contacting the Canadian Anti-Fraud Centre.

From an article by Consumer Protection BC

Stay Alert and Recognize Signs that your Business may be in Trouble

By Randall Orser | Budget , Business , Small Business

As a business owner closing your company can be one of the hardest things you ever have to do.  But especially in these financially difficult times it is important that you recognize the signs of trouble early and prepare to deal with these difficulties early. Here are some red flags that can indicate that it is time to consider your options and what these may be:

1.  Dwindling Cash Flow - a shrinking cash flow is the most important factor that determines if a business is failing.  Financial experts say that having a cash reserve and a 13-14 week projection of future cash flow is critical to the business.  The covid-19 crisis has shown that many businesses did not have savings for a rainy day but were basically living from one payroll and rent payment to the next.  In addition many of the both large and small businesses that have filed for bankruptcy or a Companies Creditors Arrangement Act in the past few months were already financially distressed long before the pandemic started.   Many familiar companies are working with their lenders and advisers and considering restructuring to determine if they can continue to operate as a going concern.  

2.  Leaning on subsidies vs strategy - Do not rely on government subsidies to keep your business open.  There are over 300 different programs available federal, provincial and municipal and all require different guarantees, covenants and future repayment commitments.  Qualifying for subsidies may be just delaying the inevitable instead they should be used to help you to carry on with your business without this extra support.

3  Pressure from Suppliers - When the income flow slows companies are forced to extend their payables and manage their cash flows.  However if your unpaid bills are piling up and your suppliers make you pay COD or cut you off this is a serious sign that your payables have stretched as far as they can go. This may have been the situation for many businesses prior to the pandemic and it may quite likely be the same once the pandemic is over if your cash flow has not increased.

4.  Support from Lenders - If you have a bank loan or secured creditors that have taken assets as collateral you will need to generate enough positive cash flow to keep them happy.  If that is not possible even though your bank has eased restrictions and is offering an interest only loan then it is time to say that you are done.

5. Commitment to using your personal wealth - Many small business owners put their personal wealth on the line to finance their business so if they run into cash flow problems they have to decide how much more of their personal wealth do they want to commit to the business.  Even though entrepreneurs are usually optimistic, in this current climate they need to take a hard look and decide if their business is still viable.  

Even if you are seeing an number of warning signs the solution is not always bankruptcy.  It is a good idea to consult an insolvency professional as soon as financial problems are anticipated.  They will help you to explore all your options before closing the business which could include, finding an acquisition partner, forming a strategic alliance leading to a merger, or filing a holding proposal under the Bankruptcy and Insolvency Act.  In this situation your existing creditors are held in abeyance until you are able to put together a plan to sell your assets, or change your business model to become able to repay your creditors in the future.

From an article by Margaret Craig-Bourdin

Incentives are Key During Salary Freezes

By Randall Orser | Budget , Employees , Small Business

As companies are struggling to survive under the grip of Covid-19 employee salaries have been mostly frozen and instead of pay increases different ways have to be found to keep employees motivated.   Companies are currently conservative with their profit projections and approach to changes hence the salary freezes.  In 2020 more than 36% of Canadian organizations froze salaries in 2020 compared to the pre-covid forecast of only 2%.  This trend will probably continue into 2021 as 46% of employers expect to freeze salaries in 2021.

As most companies are conserving cash and not increasing wages here are three ways that they can mitigate repercussions on business performance and employee engagement.

1.  Offer Incentives such as flexible work hours, extra vacation days, training opportunities and employee assistance programs.  This will deter talent from seeing new opportunities and encourage loyalty and promote the notion of teamwork and that the company will succeed if everyone works together to move the company forward.

2.  Communicate clearly with employees so that they are clear about the reason for the salary freeze, how long it will be in place and how it will affect their workforce.  Communications with employees should be on a regular basis especially with employees who are working remotely.  This helps employees to feel less isolated and increases transparency so that they know what is happening with the company so that there are no surprises.  

3.  Companies that do not keep up with salary increases run the risk of losing their talent to the competition.  Businesses able to increase salaries are going to try and attract the best talent and that will impact organizations that have to freeze or roll back salaries.   Pandemic support such as the Canada Emergency Wage Subsidy have enabled companies to furlough or give a temporary leave of absence that will keep employees in their jobs.  They can return to work instead of being laid off ensuring that talent is not lost and the employee will have a job despite the bleak labour market.

According to a survey by Morneau Shepell 76% of employers have reported that covid-19 has negatively affected their bottom line and in 2021 salary increases are going to be dependant upon how quickly these businesses can recover.

From an article by Sophie Nicholls Jones 

Online Holiday Sales Expected to Surge by 90% in 2020

By Randall Orser | Business , holiday season , online shopping , Small Business

Shopping in this 2020 holiday season is going to look unlike anything we have ever seen before as 30% of shoppers will be buying their gifts online.  This will cause a shift in what is known as the seasonal rush as couriers, delivery services and Canada Post rush to deliver parcels.  A huge surge in online shopping occurred almost overnight starting back in March as shops closed due to the pandemic.  Digital sales saw a five year acceleration in just a few months trigged by this change in shopping habits and the retail industry will see a 15% market share which took 30 years to reach explode to at least 30% by the end of the year.

As more people are choosing to shop from home the main driver of these online sales will be social media direct advertising.  At least 15% of purchases will be referred to company websites from social channels especially in the height of the season and almost one in ten online purchases will be made directly through digital purchase points on social media.  The digital e-commerce demand is so strong this year that experts predict that companies offering personalized and curb side pick up options will increase their digital sales by 90% in 2020.

The anticipated volume of parcels to be delivered prompted Canada Post to release a video asking consumers to shop early to help to alleviate the backlog for their workers and to ensure packages were delivered on time.  On December 14th alone, Canada Post delivered half a million parcels.  They are adding more than 4,000 temporary seasonal workers and increasing their fleet by more than 1,000 vehicles.  There will be weekend deliveries and additional pick up points and post office hours will be extended.  Additional processing equipment has been installed along with enhanced tracking technology to enable customers to track packages. Despite these measures up to 70 million gifts could be delivered late.   

Many larger retailers have set up their own delivery services or teamed up with mail carriers and couriers to delivery purchases to customers.  Many are offering national two day shipping and next day delivery in major cities and in additions some started their holiday events early offering shopping with strict social distancing measures, online shopping with curb side pick up or home delivery.  

In order to have a successful holiday season retailers have had to change the ways that they do business to include more personal services such as the ability to chat on line with a store associate. Offering free shipping often with a dollar amount of purchases is always a bonus to attract a customer and have them buy more to get free shipping.

From an article by Michelle Singerman

The Rise of the Virtual Restaurant

By Randall Orser | Employees , marketing strategy , Small Business

The pandemic has forced millions of people across Canada to stay home no longer eating out, giving rise to "the virtual restaurant". Virtual restaurants are also known as dark, cloud or ghost kitchens and they exist just to take orders from food-delivery apps.  They don't have dining areas or servers and often do not even have a storefront.  The only physical part of them is the kitchen where delivery drivers pick up. 

The first ghost kitchen started in New York in 2013 and the concept has grown from there as have the delivery apps that work with them.  Online food delivery is big business, the global market is currently US$84.6 billion and is projected to nearly double to US$164.5 billion by 2024.  In Canada a third of the $3.3 billion food delivery market goes through third party apps like Skip the Dishes and DoorDash.

There are many incentives for restaurant owners to have a ghost kitchen.  Labour costs account for a third of a restaurant's revenue and ghost kitchens cut these costs as front-of-house staff are eliminated.  Owners are able to offer a variety of food styles all from the same kitchen which can be set up anywhere such as rented spaces inside commissary kitchens, converted warehouses and even parked trailers.  

In 2019 a well known large restaurant conglomerate in BC launched 100 virtual restaurants in repurposed kitchen spaces.  In 2019 a Restaurants Canada survey of 9424 food service establishments found that only 4% of those responding operated ghost kitchens but 17% were planning on launching one in the next two years.  Sixty-two per cent of Canadian quick service restaurants already use a third party delivery service so especially due to Covid-19 it makes sense to create a ghost kitchen to further use these services.

Regulations for virtual restaurants depend on the province but they are generally treated the same as a brick and mortar restaurant.  They are inspected prior to opening and have regular and random inspections.  

From an article by Ali Amad

Will Wage Subsidies Help Retail Businesses?

By Randall Orser | Budget , Covid-19 , Employees , Retail , Small Business

Though the lockdown of last Spring was the right thing to do to keep people safe and flatten the curve, but it did a huge amount of damage to the economy.  Canadian retailers saw a 26% fall in sales during quarantine and 40% of retailers had to close their doors.  

Stores offering non-essential products and services such as clothing stores were the hardest hit, along with gas stations as people were no longer travelling.  However those selling essential goods found themselves thriving and even experiencing surging sales such as in groceries, home renovations, alcohol and cannabis.

Canadian retailers have been slow to transition to on-line sales but the pandemic has forced them to adopt e-commerce techologies to try and keep themselves in business and as a result e-commerce sales have more than doubled year over year.  Although it means that Canadian retailers face competition from others worldwide it also gives them the opportunity to expand their market share at home, especially if they sell niche products.  

In 2021 it is likely that retail business will still suffer a bumpy ride.  As we are seeing now there will probably be sporadic shut downs due to minor outbreaks but these are likely to be more regional.  During this time retailers can expect sales to fall and they will have to deal with high labour costs and the costs of having to comply with health regulations but it is hoped that on-line sales will be a stop-gap solution to keep them in business.

The federal government is continuing to support businesses by extending the Canada Emergency Wage Subsidy program into 2021, coving 75% of employees wages for those that are eligible.  This will help retailers to avoid bankruptcy and will give employees more disposable income to spend.  

Even with these new ways of doing business and federal help it is unlikely that many in the retail sector will survive another major lockdown.  However localized shutdowns will allow the majority of retailers to stay open and keep some revenue coming in until a vaccine arrives.

From an article by Ali Amad

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