Small business blog posts we liked this week

By Samantha Garner | May 25, 2019

Small Business Founding Team

From fragrance to farming, here are some of the small business blog posts and articles we’ve enjoyed lately. Do you have any you’d like to share?

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Entrepreneurs: Don’t get sued

By Samantha Garner | May 18, 2019

tech business

When it comes to small business rules, regs and legalities in Canada, it can be confusing to know where to even begin to stay compliant. Thankfully, we’ve helped thousands of Canadian entrepreneurs stay on top of all the paperwork required to run a small business.

Permits and Licenses

As a business owner, it’s important to make sure from day one that you have all of the required licenses in place before opening your doors. Without them, you could be facing some pretty hefty fines. A license signifies that you are permitted to operate in your area, while a permit is a document that shows proof of compliance with certain laws. The permits and licenses that are required for your company will not only vary by industry, but also by city and province. You may require a municipal and provincial license to operate your business. Most businesses need a license of some sort to operate. License fees are required, so be sure to budget for this, especially for signs and company vehicles.

Industry Canada runs an online service called BizPal which helps you find the licenses required for your operation within particular areas of Canada. You may also be required to contact local authorities like Development and Building Approvals, Health Services, Fire Department, Gaming and Liquor Commission, Police Services, and Motor Vehicle Industry.

Business Number (BN)

A business number (BN) is something you’ll need for GST/HST, payroll, corporate income tax, import/export or other (registered charity, excise tax, excise duty, insurance premium tax, or air travellers security charge) business accounts with the Canada Revenue Agency. When registering your business, you will be assigned a business number. This business number will have 15 digits, consisting of two parts: the registration number and the account identifier. Your account identifier may be either RT (GST/HST), RP (Payroll Deductions), RC (Corporate Income Tax), or RM (Import/Export) and will be followed by a 4-digit account reference number. You’ll need your business number when making payments or enquiries related to your account. While the whole thing might sound complicated now, registering for your business number is easy — it can be done by phone, internet, fax or mail.

Rules and Regulations

Some of the most important regulations you’ll need to follow will be the local bylaws that may affect your business operations. Examples include smoking bylaws and alarm system bylaws. Bylaws may be updated and renewed often, so keep up to date on this information. For details about the regulations of your area, contact your provincial, town or rural municipal office.

Other regulations that must be followed include land use, zoning and building regulations. Be sure that your company complies with zoning and building regulations before committing to any land use or renting. Zoning is actually often a prerequisite to licence applications. Watch for any additional taxes you may have to pay for your business, including a business tax for companies operating in their own facilities. The Government of Canada provides some excellent guides to starting specific types of businesses, including many of the required rules and regulations, on their website.

Product or Service Liability

Product or service liability refers to the extent to which your company is obligated to make compensation to your customers for loss related to personal injury, property damage or other harm caused by the product or service that you offer. Things that you could be liable for include negligent packaging or product design; failure of the product to be safely used for the purpose it was intended for; environmental damage; failure to adequately warn against misuse; or inadequate product or service testing. Service companies can experience liability due to failure to fulfill requirements or inadequate performance. Be sure to speak with a lawyer to develop strategies to protect yourself from potential lawsuits. Insurance policies often include a general liability policy that can help protect your company.

More about government compliance

For more info on things you’ll need to keep things above board, check out our online small business training, and these blog posts:

Types of business insurance

Intellectual property protection for small businesses

What you can do about small business fraud

Small business legal issues: Tips from entrepreneurs

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Be a great leader in your small business

By Samantha Garner | May 11, 2019

Group of people in a meeting

Whether you have one employee or a dozen, your role as a leader is to make the high-level decisions, inspire employees to be their best, and keep a cool head. However, as you’re well aware by now, small business does things a little differently. Change comes quicker to a small business; communication and recognition come easier; and there is often a greater workload divided among fewer people. This means that if you want to be a good leader in your small business, you’ll have to develop some specific characteristics and skills.

Emotional stability and maturity

Stress and frustration are dealt with constantly, so it’s important to be able to face issues effectively without flying off the handle or taking things personally. You should be able to absorb any major risks or obstacles as a leader, and keep it together during chaotic times. Show maturity by putting your own recognition secondary to that of your employees and company.

Risk management and decision-making skills

Here are some key tips to help you manage risk and make effective decisions:

  • Have a clear understanding of the decision to be made.
  • Consider the vision and values of the company.
  • Evaluate the consequences and outcomes of your decision.
  • Brainstorm as many alternatives as possible.
  • Evaluate the pros and cons of each alternative.
  • Be sure the appropriate person is making the decision.
  • Understand the timeline in which the decision must be made.

Enthusiasm and passion

Passion is contagious! Infuse the company’s vision and values into the company from the beginning, even through informal ways. You don’t need to be able to see the future, but your team needs to see that you’re excited to take on challenges and put in the work necessary to see the business succeed.

Thick skin and assertiveness

Learn to take criticism well, and show respectful assertiveness in your attitudes to help you gain respect and motivate others. But don’t hog all the leadership! Being able to delegate and supervise effectively, instead of controlling and micro-managing, are very important traits. Empowering others to make decisions and handle responsibilities will allow the company to run smoothly while you’re away.

Giving employees the power to make certain decisions on their own is a great way to prove you recognize the value of your team.

High standards and the ability to recognize achievement

You must have high standards for yourself and for others and recognize the potential of your team. You should always try to do your best and encourage your team members to do the same. Be sure to recognize achievement and develop a welcoming corporate culture.

Good conflict resolution skills

When you do have to deal with conflict, do so maturely and productively. Look for a win-win situation whenever possible. You should also take time to uncover the real reasoning beneath trivial issues and recurring disagreements. Stick to your word when you make promises or plans, so your employees have a consistent and reliable leader — this seemingly simple task alone will diminish a great deal of conflict.

Understand differences in character and psychologies, and adjust your response to the employee’s personality and preferences.

Leading by example

It’s a bit cliché, but it’s cliché for a reason. If you’re always late for work or unprepared in meetings, why should your employees be any better? Nobody’s perfect, but a great small business leader is one that inspires employees through action.

Sound like a superhero yet? You can definitely get close to being one! Being a great leader is one step in the journey of entrepreneurship. For more business skills, and advice on how to guide your business to success, sign up for our online training today!

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What is the break-even point?

By Samantha Garner | May 4, 2019

break even analysis

The break-even point is a critical number for every small business. Yet, many Canadian entrepreneurs don’t know the point at which sales will translate into profit. Let’s break down the break-even analysis and help you easily understand how it’s calculated.

Why is break-even important?

The break-even point is critical for entrepreneurs, because any money coming in over and above this number is profit! As well, knowing the break-even point can help an entrepreneur determine how much of an increase in sales is required to cover an increase in costs, and may be used when deciding whether to launch a new product.

How to calculate the break-even point

Break-even can be calculated using this formula:

Total Fixed Costs ÷ (Unit Price – Unit Variable Cost)

                                  (also known as contribution margin per unit)

To use this formula, the price of the product or service, per unit, should be known. Entrepreneurs will also need to know the variable cost, per unit, of the product. For example, variable costs for a shoe manufacturer could be the cost of the materials in each pair like leather, laces as well as that portion of labour that it takes to build each pair.

Next, subtract the variable cost per unit from the selling price per unit, to get the bottom part of the formula — the contribution margin per unit.

The top portion of the formula is total fixed operating expenses, things like a business’ rent, salaries not associated with manufacturing, utilities and so on.

For example, let’s say the selling price of an average bouquet at Jill and Lauren’s flower shop is $25. The variable cost of a bouquet, including materials and labour wages, is $5.00 per bouquet.

To figure out the contribution margin per unit, they subtract the variable cost per unit from the sales price. So, $25.00 – $5.00 = $20.00.

Let’s say the fixed costs of Jill and Lauren’s flower shop amount to $10,000. Now that they have all of our numbers, they can plug them into the formula to determine the break-even point, or the number of bouquets they’ll need to sell to cover their costs.

     $10,000                  =                      $10,000          =          500 bouquets
($25.00 – $5.00)                                      $20

Other analyses can be conducted with this knowledge. For example, product-focused businesses can take that number and divide it by the number of days they work per year to figure out how much they’ll need to sell each day to break even.

The break-even point in sales dollars can be determined by multiplying the break-even point in units by the selling price. This will give the entrepreneur the point where total sales equals total costs, in dollars.

For more insight into the break-even point and more, check out our online small business training – comprehensive but designed to fit around your busy schedule!

 

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What’s the most important entrepreneurship skill?

By Samantha Garner | April 27, 2019

small-business-planning

Our small business training was created after surveying 200 uber-successful Canadian entrepreneurs. These entrepreneurs were asked what business skills they believed made the difference between success and failure for them.

Today, we’re sharing some of the most vital skills entrepreneurs need to know, and which ones GoForth entrepreneurs were surprised they didn’t know.

Branding

This is the importance of developing a small business brand, including brand experience, identity, image, pillars, equity and delivery. Brand pillars are the most important values and characteristics of your small business that you want to communicate in your branding. The brand experience is strategically developed to provoke thoughts, interact with, and persuade people to take action. Make sure your client’s brand experience is consistently positive!

Read more about brand experience.

How to build a financial plan

Most entrepreneurs don’t spend enough time understanding the numbers in their business — but the lead entrepreneur really should know the numbers inside and out. If you’re easily stumped by simple questions about profit, costs, or break-even, then others will lose confidence in your ability as an entrepreneur. Investigating financial feasibility before you start your business and while your business is running will help you tweak your business model canvas, which will raise your confidence that you’ll run a profitable company.

Customer experience

Customer experience (CX) is the sum of all experiences a client has with your business, either during one transaction or over the lifetime of your relationship. Research shows that customers do business with companies they like, so the more positive experiences a customer has with your business, the more they’ll continue to do business with you. To define your customer experience, it’s important that you know what your customers want and need. Refer back to our email about researching your customers to start the process today!

Read more about CX.

How to manage a small business

Successful leaders are teachers, learners and visionaries. Your employees will look up to you for motivation, guidance and also as a model for their own performance. In order to lead effectively, you should consider your business and its staff to be like a team. Everything that’s done should focus on strengthening and improving your team. According to Bond Street Newsletter, these five skills are the essential toolkit for effective leadership in a small business: 1) Empathy; 2) Decisiveness; 3) Collaboration; 4) Planning; and 5) Support.

Government compliance

Staying on top of government compliance can greatly improve a business’ odds of success. There are income tax requirements, GST/HST requirements, rules for working with self-employed contractors, and documents and policies required if you become an employer. It’s not all doom and gloom, though. Government compliance can lead to benefits for you as an entrepreneur. For example, there are many tax deductions that self-employed entrepreneurs can make, as well as employees and commissioned sales employees.

The importance of creativity in business

Creativity is the ability to view the world in new ways, to find hidden patterns, to make connections between seemingly unrelated things and to find solutions. This conceptual combination is seen often in the history of some of today’s most unique product innovations. For example, in 1941 George de Mestral, a Swiss engineer, returned home from a trip with his dog, and noticed burrs sticking to the dog’s fur. Like a good engineer, Mestral examined the burrs under a microscope. There, he noted their hundreds of “hooks” that caught on anything with a loop, such as clothing, animal fur, or hair. And with that, the idea for Velcro was created!

What about you? Are there small business skills you wished you knew before starting your entrepreneurship journey? To learn these, plus dozens of other vital small business skills, check out our online small business training!

 

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