Category Archives for "Small Business"

Conquer These 5 ‘F’s for a Successful Business 

By Randall Orser | Small Business

Your path to success as a thriving entrepreneur will have downfalls, and you must be willing to conquer challenges and work through obstacles. You can’t let these challenges stop you from going after your entrepreneurial dreams, or else you’ll never forgive yourself for not having the conviction to conquer your trying experiences. The barriers on the way to entrepreneurial success are plentiful, and these 5 ‘F’s are the ones you need to beat.


Entrepreneurs need to be fearless in order to succeed. You’re a business builder and your means of growing your business needs to be bold. Do you have a fear of failure? Maybe it’s a fear of being outdone by a smarter, quicker competitor? Either way that fear will be the end of you, so don’t let fear rule your business moves. Face fear head-on, and you can go far in building your entrepreneurial dreams.


You’ll probably go through what many call the ‘imposter syndrome’, which is basically a lack of confidence, and lots of entrepreneurs have felt fraudulent at one time or another in their daily business lives. You will need to triumph over your confidence issues, if you want to be a successful entrepreneur. You could better your confidence level in areas lacking, hire people that can do the jobs where you’re weaker, get helpful tips from other entrepreneurs, and in the end just believe in yourself.


This is a huge thing for the entrepreneur to overcome as you are starting out and trying to be successful is the predilection to give away your products or services for free. The freemium version of a product has taken off as too many entrepreneurs and startups believe they need that in order to gain traction. If you do only one thing to improve your chances of success, consider changing your attitude towards offering your products or services for free, and double-down on providing premium value instead.


Your chance of long-term entrepreneurial success is much less when you falter in your business building efforts. If you allow roadblocks to hinder your growth or are fuzzy (another F!) in your approach to marketing and customer acquisition, your lapses can affect your success rate. You need to be unrelenting in your approach, take glitches in stride, and grow your company confidence and conviction.


Your career as an entrepreneur takes work, and is much easier to have a 9 to 5 job and a regular paycheque than it is to be self-employed. Entrepreneur ship can also be draining, mentally and emotionally. Your time as an entrepreneur is going to be pretty short-lived, if you let fatigue block you from following your passion. As in many aspects of your life, develop coping mechanisms and energy hacks in order for fatigue not to end your entrepreneurialism.

Your entrepreneurial adventure will be much more enjoyable if you aim at conquering these five ‘F’s. It’s not going to be simple, but the success you’ll enjoy will be worth all that effort. Have you thought of any ‘F’s you find challenging as an entrepreneur?

Pass These Five Entrepreneurial Lessons onto your Children 

By Randall Orser | Small Business

As many have come to realize, the middle class is disappearing. It seems that now you are either filthy rich or at poverty level. For financial independence, that long-time career as an employee is not feasible any more. You need to recognize this and teach your kids, from a young age, how to be an entrepreneur and not an employee. For your kids to succeed, they must learn the following business lessons.

Sales Abilities

Whether your child becomes a solopreneur or takes the startup path, they must know how to sell. You won’t get investors to invest if they can’t persuade them the business is viable investment, nor will they be able to persuade customers to pick them over the competition.

One of the major steps is advising them to have pride and faith in their products or services. They won’t be able to sell what they don’t believe in, and for many kids they need to be coached that what they produce will be good.

Target Growth, Not Avoidance

Failure is the biggest educational impediment that your child faces today. Kids are afraid of failure, as parents are drilling into them that failure is unacceptable. The entrepreneurial perspective needs failure as that is feedback, and it can guide you into working better. They need to look at failure as part of the process of entrepreneurship, and that avoiding it at all costs ends up limiting their options.

You need to look at these fear acronyms (there are many more but these two are relevant to our post): Forget Everything and Run or Face Everything and Recover. Everyone makes mistakes, and scolding your kids when they do doesn’t help; just let them know everything will be okay and ask them what they learned because of the mistake. You need to guide them rather than just tell them what they ‘should’ learn; ask them leading questions and guide them toward the answer.

Independence and Autonomy

Successful entrepreneurs take initiative. There always times when waiting is the best call, however, in a lot of cases action is better than reaction. They need to push past the competition, which seems to just get more intense.

The next generation must have independence, autonomy, and initiative. Coddling and helicopter parenting over your kids all the time robs them of all three, which in the end costs them in the future when they want to create their own companies. You need to back off when they have projects to do; you can answer their questions, just don’t tell them what to do.

Fiscal Responsibility

Get your kids to comprehend that being an entrepreneur and running their own business can’t be done for free. There are many costs such as time and money. They need to get a handle on these costs or they won’t be able to handle running a startup.

For an entrepreneur, the important lessons are financial responsibility and literacy. That summer job or lemonade stand, as innocent as those may be, can teach them about income streams, savings, and profits.

Concentrate on Action

Paralysis by analysis is a phrase than can definitely take the beginning entrepreneur. Planning and theorizing are important, but great entrepreneurs are made from that. Entrepreneurs act on their ideas (and make mistakes) instead of worrying about the possibilities. Don’t get obsessed by checking all the angles, you eventually need to take action.

When your kid has an entrepreneurial idea, encourage them to consider carefully but not fearfully. You need to stress the obsessing over every little detail isn’t ideal, and there are many benefits for just doing it.

Entrepreneurial lessons may seem to be harsh, but they don’t have to be given in a strict manner. You’re teaching your kids to be independent, but that doesn’t mean you have to be cold. Being cold-hearted or mechanical may teach the wrong lessons. You should be warm and supportive. Your children will thank you, both for your kindness, and for showing them how to handle being an entrepreneur.

Is it Time to Outsource Your IT?

By Randall Orser | Small Business

Technology is very important to businesses today, and when it fails, it can be an utter disaster. You have two choices when it comes to your Information Technology (IT) operations. Do you hire someone in-house to install and maintain your servers, and train your staff on the latest software? Or, do you outsource it to an external IT expert? The choice of the latter has many reasons to pick and smart business owners recognize the value of outsourced IT.

The benefits of outsourcing your IT can be quite clear, however, some are not as clear. Here are ten benefits to outsourcing your IT.

Lower Costs

You can lower your overheads with outsourced IT, as you’re just renting the equipment or space on a server, and pay a monthly fee rather than having to outlay tons of money for in-house equipment. You end up paying only for what you need.

Enhanced Security

Data security is crucial for your small business, and managed service companies are experts at protecting your data safe. These IT providers can easily increase data security, and make expensive data breeches less plausible.

Decreased Training Costs

It can get quite costly keeping your IT staff up-to-date on the latest operating systems and other software, not to mention the constant updates out today. Outsourcing your IT can reduce or eliminate these costs lowering your overhead even more.

Hiring Issues are Gone

Most business owners are not techies, and you’re probably not either, so hiring an IT person can be difficult when you don’t understand what it is they do. These hiring challenges can be eliminated by outsourcing your IT.

Dependable Backups

You have so many things on your mind as a business owner that backing up your data may fall on that list way down. You may have a setup where your data is backed up automatically, however, are you checking those backups. Managed service companies ensure that backups are done regularly and that those backups are usable. You’ll definitely be pleased about this when something goes wrong.

Technical Abilities

You’re an expert in what you do and the niche you’re in, however, IT is probably not one of those. Through smart outsourcing of your IT to an expert, you can focus on what you do best, and not have to worry about your IT.

Better Budgeted Costs

You can better budget what you’re spending on your IT each month as you just pay a fee based on the infrastructure or services you bought. When you have in-house staff, that’s much harder to do, as when something breaks down, you’re responsible for paying for it.

Easier Scaling

With an in-house IT staff, it can be much harder to scale up, however, with outsourced IT can be as easy as letting them know what you want. Is your business in a growth phase? Then you’re perfect for outsourced IT.

Better Productivity

The goal of any business is to be productive and efficiently serve customers, and that’s much easier when you outsource your IT. If your goal is higher profits, as I’m sure it is, then better productivity and lower costs ensures those profits.

Give Yourself a Fighting Chance

As a small business owner, you can keep up with larger competitors by outsourcing your IT. Outsourcing has always been a great way to level the playing field, and outsourcing IT lets you win in this global world of ours.

Finding ways to do more with less is the way of the startup as well as the growing business. A great strategy to do more with less is for your business is to outsource your IT, it has ten great advantages as mentioned above.

What are the Advantages of Incorporating? 

By Randall Orser | Small Business

While there doesn’t seem to be statistics on how many small businesses are incorporated in Canada, in the US it’s something like 20%. As of June 2016, there were 1,143,630 small businesses in Canada (97.9% of all businesses are small businesses). In Canada, a small business is defined as businesses that have fewer than 100 paid employees. In Canada, when you incorporate, you can use Limited, Ltd., Incorporated, Inc., or Corporation after your company name. Why are small businesses choosing to incorporate their business at the start?

Legal Protection

With a sole proprietorship or partnership, you have unlimited liability, however, a corporation limits your liability to your investment in the company. The debts and other legal judgements against the company do not affect your personal assets.

You can also protect the name of your corporation, at least in the Province you’ve incorporated, or Canada if you do a Federal incorporation. Though if you have something good, it may be worth trademarking it.

Equity Investors

If you are a sole proprietorship, and family wish to invest, then you have to make them partners, which then dissolves the proprietorship, and creates a new entity. Otherwise, it’s just a loan that you pay back. For the corporation, you raise capital by selling shares, and you can have different share structures, such as non-voting or preferred shares where they get their investment back first.


The corporate tax rate for small business, if it’s a Canadian Controlled Private Corporation, is 10.5% at the moment, and the provincial tax rates varies on your province. In BC as of January 2017, it’s 2.5% for a total rate of 13% on net income below $500,000. Over that amount it jumps to 11%, and a federally it’s 15% for a total of $26%.

The advantage to incorporation is you can play with your income. You can take all the net income out as wages, or divide it between wages and dividends, or leave some net income get taxed at 13% on that, and take some as salary and/or dividends. You need to keep in mind if you have a personal mortgage, the banks like to see a higher personal income. I have found the banks don’t like all dividends when it comes to income.


The sole proprietorship dissolves once the owner dies, and the partnership may dissolve if there’s no agreement in place on the occurrence of a partner’s death, otherwise, it becomes a proprietorship or a new partnership. Corporations, on the other hand, continue until they are liquidated.

Ease of Ownership Transfer

As ownership in a corporation is through shares, this makes it much simpler to transfer said ownership. The purchase of shares allows the company to merge or be sold without having to start the business from scratch.


To future investors or customers, having the suffix Limited, Incorporated, etc. after you name makes you seem more legitimate in their eyes. For some people, it just seems like your more invested in your business if you’re incorporated, especially to the banks.

Also, being incorporated allows foreign investors to invest in your company as there are not the limitations to invest like other forms.

There are Drawbacks to being Incorporated

Administrative Costs

Maintaining a corporation does have its additional costs over the sole proprietorship or partnership. Corporations have an annual filing fee with the province for provincial corporations and for federal corporations too. Federal incorporations may have two filings as they file federally as well as provincially depending in which province it operates. Of course, if you operate in more than one province, you have to register the corporation in each province, and then pay annual fees.

Also, many provinces work with the Canada Revenue Agency, and are informed when you incorporate, so you may be required to register for Workers’ Compensation depending on the province.

More Documentation

Since corporations are separate entities from the owners, there is increased documentation account setup, and filing demands, such as:

· Articles of Incorporation

· Bylaws

· Corporate Minutes

· Certificates of Good Standing

· Separate Bank Accounts

· Greater tax compliance

There are some requirements for corporations when they reach a certain revenue milestone or the number of shareholders that they need to register with the TSX. And, maybe the SEC in the US.

Double Taxation

The one advantage of incorporation is taxes; however, it can be a double-edge sword. The reason is that the corporation is taxed on its earnings, and the owners pay taxes on any earnings received from the corporation, such as dividends. Dividends though are taxed at a different rate than employment income.

When entrepreneurs consider starting a business, the corporation isn’t the first type of entity they think about. Corporations are a viable choice for a business startup, and have advantages over the other forms.

How are Your Profit Margins? 

By Randall Orser | Small Business

Do you feel like your profit margins are being choked? You are probably finding that you are working harder and harder to make the same profit with the same capital. Or, maybe you’re finding you’re having to put more capital in to your business to stay afloat. You need to know where your profit margin is now, and find means to improve them.


So, where do you start? Your pricing is one of the things to check out first. You may want to increase prices by a few percent as this grows your profit margins immediately; however, you need to find a percentage that won’t affect sales. This across the board increase on all prices is doable, but not always practical. A better approach is to look at those areas where a price increase can do the most improvement. This could be where your inexpensive items are marked up, while the more expensive items are not. A great example of this is inkjet cartridges, they cost more than the printer, however, you need them to run the printer and going and buy a new printer when the cartridges run out isn’t practical. Are you offering discounts or special offers? Discounts can give away too much, and don’t always get your recurring business, unless you keep giving the discount; and, special offers can be too charitable. If you’re offering discounts or have special offers, stop them or fine-tune them to increase your profit margins without increasing prices.

Mix It Up

Your sales that is. Have you analyzed the costs of your products? Do you know the margins on each? If you offer services, do you know the costs and margins on each? This is crucial to figure out a strategy you need. This could be looking at how to stimulate your customers to change their behavior by offering a loyalty scheme, or offering bundles (putting two products or two services together, or a product with a service).

Lower Your Costs

Looking at what it costs to produce your product, or service, and reducing them can definitely improve your margins. This isn’t going at your costs with a chainsaw, but doing an accurate study, and seeing the best areas to cut. Where are your orders coming from? A good way to lower advertising and marketing costs is cutting those that are not generating a good amount of sales, and moving your dollars to where they are generating good sales. Being purchasing savvy is another good way to lower costs, such as buying in bulk, or paying for a year and getting a lower rate per month or free months.

Waste Not Want Not

There are so many things that can waste your dollars. Leaving lights on or computers on when no one is around, keeping too much inventory on products that aren’t selling, and using old lighting technology that uses too much energy. Investing in a more efficient plant, can quickly payoff. What products and/or services differentiate you from your competitors? Focus on those, not the ones that are the same or similar to the competition. Low quality can hurt your margins, so look at products that are broken or below par, get returned from customers frequently, and perishables that are beyond their best before date; get rid of these as soon as you can.

Time is Money

Time is money, as they say, and it was never more apropos than on a television show, where a minute is worth about $200! – Dirk Benedict, actor

What’s slowing down production? What’s causing delivery delays? Fix those things and you will vastly improve your margins. How often are customer details taken down? This takes time, the more times you do this the more time the customer is on the phone, but not buying something. Cutting the time wasted taking details more than once, benefits you, but the customer more. You can expedite the process by templating or automating email responses, keeping stock of parts that are ready to assemble rather than having to do a whole run to make the product, which will save you money.

Feel the Churn, well maybe not

Are you watching when customers drop out of the purchase, or stop ordering? When customers drop, this is called churn, and it can cost your business big time. What causes churn? It could be your website is not performing adequately, and customers leave before completing the sale. Maybe it’s that your recurring customers are no longer coming around, and you need some help getting them back; such as targeted offers, sales or discounts, maybe a call from you the owner.

Cut the Slack, Customer Slack

Where are your delivery areas? Are there any outer lying areas that you deliver to, such as rural areas; may be good to cut those unless it hurts your business image. Maybe they can be turned profitable for now by delivering only on certain days, or subcontracting out those deliveries. If you sell business to business, look at your customers and let go of the less profitable ones. Don’t just do this willy nilly, do a thorough study to determine if they need to be let go, and do so as tactfully as you can. Of course, don’t forget your more profitable customers, look at the top ten to twenty percent of those, and see how you can get more business out of them.

Your Business Model Sucks

Sometimes in the end it’s your business model that needs an overhaul. You may be doing customized software, or some other product that’s customized, however you may want to change that model to packaged software selling licenses and get royalties from bigger companies. You can improve your margins with a lower cost by selling a complementary, outside supplied product, which may turn you from a manufacturer into a retailer, but could make total sense.

In our current economic climate, it can be hard to boost revenues, however increasing profit margins may be easier, which in turn creates a noticeable bump in the bottom line.

What Happened to Casual Labour? 

By Randall Orser | Small Business

Once upon a time, the Canada Revenue Agency (CRA), would allow you to deduct small payments made to people that you hired to do a particular job, or maybe work a few hours to cover someone, a student to hand out fliers, etc., and it was called Casual Labour. Those days are long gone. Now, when you hire someone they are either an employee or a subcontractor.

If you’re continuing to pay cash for the odd job here and there, even window cleaning, you are losing out, and cannot claim the expense. And, if you are claiming such expenses, then you are waving a red flag at CRA, and could trigger an audit. CRA will look at your wages expense, compare that to your T4s, and then want to look at your payroll records. If you’ve paid a lot out as casual labour, then CRA will determine this as wages and calculate the deductions according, adjust your T4s, and penalize you for not claiming these individuals as employees. And, you will be on the hook for those casual labour people’s CPP and EI.

CRA is trying to stop the underground economy (any activity that is unreported or under-reported for tax and GST/HST purposes; including moonlighting or working under the table). Casual labour was one of those forces that encourages this underground economy. Generally, any income you earn is taxable and you have to report it on your tax return. If you don’t file your tax return or register your business for GST/HST when you’re supposed to, or you don’t report all of your income, you are participating in the underground economy. In most cases, when you pay someone as casual labour they are not reporting this as income, and, therefore you’re contributing to the underground economy. Maybe without even realizing it.

For the business owner, it can be a pain to have to take deductions off a one-off employee, however, that’s the rules and it’s best to follow them. I can certainly understand that, as you now have to calculate CPP, EI & Taxes on such a small amount of pay. Your best bet is to find someone who can work casual on days you need them, you can treat them as an employee, pay them every two weeks, and you’re good.

You can’t just pay someone as a subcontractor either to get away from not having to make deductions. They need to invoice you, provide a SIN (especially if you’re in construction as you have to do a T5018), have their own workers’ compensation coverage, and a GST/HST number is best. You probably would be better off having some kind of contract for anyone you use on a regular basis.

Remember, you can still pay people cash for those little bits and bobs that you need done. Just remember that you won’t be able to write it off as an expense, and if you’re incorporated and draw out company cash to pay them, that is now a shareholder draw and you could be taxed on it.

Casual labour is dead, and you need to decide what you’ll do with anyone going forward you need just on a few days a month or even a one-off. In the end, you’re better off treating them as an employee, even if they’re your kids.

Is the Home-Office Deduction Worth it?

By Randall Orser | Small Business

There’s been much speculation about the Federal Liberals and their approach to home-based businesses with them possibly taxing you when you sell your home (principal residence), as your either ran a business out of it or rented part of it out. We’ll talk about the home-office deduction as it relates to business for now. It still could be worth taking.

If you’re working out of your home, it pays to look into the tax deductions available for home office expenses. Even though Canada Revenue Agency has recently tightened its rules regarding these expenses, you can still save significant tax dollars by taking advantage of home office deductions whenever they’re available to you.

If you have an office in your home, and it qualifies as a “home office” for income tax purposes, you can claim a portion of your ongoing home expenses. The portion will normally be based on the fraction of the home that is used for your office (you can usually exclude common areas, such as hallways, kitchen and washrooms, when making the calculation). The fraction of your home can be based on either square feet or the number of rooms.

Your home expenses can add up to quite a bit today, as mortgages are higher and you’re paying more interest (wait until rates go up), property tax and city utilities continue to climb, and insurance rates go up; so, it can add up to quite a bit. Some people can spend quite a bit on their home expenses in a year.

The expenses you can claim include:

· rent, if your home is rented

· mortgage interest (but not the principal portion of blended mortgage payments) for self-employed individuals only

· property taxes

· utilities: electricity, heat, water

· telephone (if you have a separate business telephone which is fully deductible, consider whether you also use your personal phone for business calls)

· outside maintenance: lawn care, snow plowing

· minor repairs and supplies

· home insurance.

These expenses can add up to $20,000 or more per year. Even if you’re only claiming 10%, that’s $2,000 off your net income, and $2,000 you’re not taxed on. Of course, the savings go higher, the more you use your home for business. However, be careful how much you use as depending on your business, too high and it could flag you with CRA.

Currently, you might convert a portion of a principal residence to an office or other work space to use for the purpose of earning income from a business. In such a case, a partial change in use of the principal residence will occur for income tax purposes. This will give rise to capital gains tax implications as described in Income Tax Folio S1-F3-C2, Principal Residence. However, it is the CRA’s practice not to apply the partial change in use rules and resulting capital gains tax implications if the following conditions are met:

  • the income-producing use is ancillary to the main use of the property as a residence;
  • there is no structural change to the property; and
  • no capital cost allowance is claimed on the property.

Whether the use of a work space in a home is secondary to the main use of a home as a residence in any particular case is a question of fact. For example, an individual may convert a portion of a principal residence to a bed and breakfast. In order to have no change in use, it must be determined that the bed and breakfast operation is secondary to the main use of the property as your principal residence.

Now if the government does change its mind and tax you on when you run a business out of your home, then sell that home, you will incur a capital gain based on the percentage of the home you used for business. How much is this going to cost you? Well, that depends on many factors. Here’s a quick example.

Joe Smith has been running a business out of his home for 10 years, and has owned the home for 20 years. He feels it’s time to sell as the home is worth so much more than what he paid for it, and doesn’t need as much space with the kids gone. Joe ends up selling for $1.5 million. He bought the place for $175,000 and put about $50,000 into over the years, for a total of $225,000; his costs to sell were $100,000 (including realty & lawyer fees). That gives him a total cost base of $325,000. His gain is $1.175 million. His business used 25% of the home, therefore, he will be taxed on that portion which equals $293,750. Since Joe is married and his wife is an owner they split this gain.

As you can see this could add up to a lot of taxes owing when you sell your home.

Anything with government can change at the drop of a hat, or a change in who’s running the country. The Federal Liberals haven’t at this moment put up plans to tax Canadians, however, that could change. I believe a change will come after the next election if the Liberals win, and you will be taxed if you ran a business out of your home and sell it. I believe, eventually, we’ll be taxed on the sale of our homes period; there’s just too much money at stake.

Our governments are broke and looking for money, why wouldn’t they when they spend like drunken sailors on leave.

Save Your Small Business with Five Money Measures

By Randall Orser | 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.

Increase your Net Promoter Score and Create Brand Advocates 

By Randall Orser | Small Business

A big thing for larger companies is the Net Promoter Score (NPS). What is this Net Promoter Score? The Net Promoter Score is an index ranging from -100 to 100 that measures the willingness of your customers to recommend your products or services to others. It is used as a proxy for gauging the customer's overall satisfaction with your product or service and the customer's loyalty to your brand. A consulting firm out of Toronto, Bain and Company, says the NPS of companies that attain long lasting, profitable growth are twice that of their competitors.

According to Bain and Company, two beloved brands Apple and American Express, which claim ardent brand advocates, also have high Net Promoter Scores. The inevitable result is that both companies are high valued businesses with profitable organic growth.

Your company if it delivers a higher quality customer experience may get a greater NPS and therefore long-lasting profitable growth. The following three tips can help you do just that.

One approach is to learn where and how to invest in order to boost your customers’ experience and determine the possible outcome.

A favourable customer experience can transform them into a brand advocate; becoming a long-term customer as well as someone who promotes you to others. One way these brand advocates get others to purchase your product or service is to post on websites or blogs a glowing review.

One way to improve your customers’ experience and increase the possibility of them becoming a brand advocate is through ‘loyalty economics’. Improving the customer experience through investment, when done correctly, will achieve direct and quantitative monetary rewards thanks to increasing sales and profits.

Looking at how you can increase your sales is one thing to determine how you should invest to improve the customer experience. Your website is one such place to invest; this could include: load time, minimizing the time and or steps the customer must make before doing an online purchase. You may also want to look at ways to improve the customers’ favour by improving product/service quality, and even making a return or exchange of the purchase much easier.

Another approach to take is look at your company from your customers’ eyes.

The customer experience is the act of interacting with your brand through marketing (ads, flyers, etc.); the attributes of your products and/or services; and customer touch-points, such as your website, storefront or office.

Feedback from your customers is the best way to gauge your customers’ experience from a typical purchase. This feedback will improve your understanding of customers’ expectations and your businesses procedures that don’t positively impact your customers’ experiences. Feedback can also be used to revise processes, such as your marketing or service practices, to improve your customers’ experience.

Create and employ processes that achieve an extraordinary customer experience.

Armed with this customer feedback, you can create a website, and process enhancements that boost the chances of your customer becoming a brand advocate. A restaurant might, for example, focus on diners’ needs, and change check-in processes so reservations are seated in less time with less effort. The experience you provide will ideally be superior to that of your competitors.

Revising your business processes, systems, products and/or services, can be challenging and tedious; however, it’s the best way to accommodate your customers’ needs who are in your profitable customer segments. This process is well worth the effort, as it increases the possibility that doing so increases the number of your businesses brand advocates. You must be customer-focused to create these brand advocates, and this requires you to commit time and effort to your customers’ experience, and aware of their expectations.

Stand Head and Shoulders Above Your Competition 

By Randall Orser | Small Business

Value matters to your customers, and they’re willing to pay well for it. The problem. How is that value perceived? While appealing to your customers’ tastes can be a good strategy, it’s unpredictable. For example, cilantro is in a love/hate relationship with many people. A large portion of the population hate it as it tastes like soap to them; I’m one of those. If you’re running a restaurant and want to regularly perform well, you may have to take peoples hate of cilantro into consideration.

Make the Customer Lazy

Sheer convenience is why the fast food industry does so well, and has for quite some time. You know the food won’t be that great, but you do know it’s consistent and fast when you’re in a hurry. If you want to increase value, convenience, is the easiest action, as you’re taking up as little of the customers’ time as feasible.

We’ve done that with our Just Say: “Stuff It” To Bookkeeping™ system. All the customer has to do is stuff an envelope, we pick it up and that’s it for them. No scanning or taking pictures of receipts. Pretty simple and convenient.

Improve Customer Experiences

In this day and age of business, it’s all about the experience, not just your product or service. Take a restaurant for example, it’s not just judged on the food, but the wait time, the servers, the feel of the place, etc. A rude or distracted server can ruin your healthy appetite, or worse, drive your customers away before even eating a meal. For your business, no matter what it is, cheerful and affable surroundings is best. Many in the internet marketing business use upsells, and you may want to think about it for your business, too. However, toning down the upsells, may be best, especially if you’re using hard sell tactics. Options are always a good thing, but browbeating your customers, not so much.

Anticipate What Your Customers Want

“Customers don't know what they want until we've shown them," Steve Jobs. This quote is certainly true as most customers don’t know what they want until shown. Ironically, they also want something they don’t know they wanted before they even know it exists. Confusing, right? Look at customer complains that just don’t seem to make sense—they know they want something, but just can’t put it into words. For your business to succeed, you need to figure out a way of answering those wants. The easiest way, say for a restaurant, to meet such wants would be to offer a selection of cold desserts or drinks as the summer season begins.

Make Your Offer a Cut Above

Your business will thrive if you offer your customers a product/service that is superior to that of your competition. What is superior? That’s the thing you need to figure out. For a restaurant, it’s not just about taste, though that’s crucial. What does your customer want? Once you establish what they want, create that. For a place that does fast food, then consider easy to eat foods. For a buffet restaurant, look at offering a better selection, or more of what customers truly want.

Value, Value, Value and the More the Better

On occasion, quantity can trump quality, especially in the case of value. Want to get customers to pick you over the competition? Then make them feel that they’re getting lots for their money. The best way to evaluate your customer offerings is to look at your industry standards. What does everyone else in your industry offer at that price point? How can you improve on that? Get people to flock to your door by offering some so much more and different than the competition.

You may think everyone needs your product or service, and they may just so, but that doesn’t mean your business will be successful. Competition is harsh, but isn’t that what you signed up for anyway? You will have a successful business if you concentrate on your customers’ wants, and work hard.