It's Bad Business to Let the Killer Get Away With It: The Sam Spade Guide to Better Business

Sam Spade, the hard edged protagonist of The Maltese Falcon, is in some ways the quintessential small business owner.  He is a private detective (or dick if you prefer) with an office, a partner, a secretary and a network that would make a social media climber swoon.   As a small business owner he takes on the risks of running a business and enjoys the rewards.  He sets his own prices which vary significantly depending on the client and the job.  (Recovering the Maltese Falcon is worth thousands, while searching for someone’s sister is worth considerably less).  And despite his womanizing and wayward ways, he also embodies qualities that would behoove business owners to emulate.

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Nine Steps to Starting your Small Business

Starting a small business is fairly simple.  Having a successful business that meets your long term goals is a little more difficult.  In this technological age, the tools to help you succeed are numerous and overwhelming.  You are a Google search away from being bombarded with search results, many pages deep, that provide insight, tips, tricks, mistakes and guidance.  The difficulty arises when you have to implement them, since every small business owner’s circumstances and business goals are unique.   Keeping that in mind, below is a roadmap to help you focus on what is important, particularly in the early stages:

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Top 6 Signs Your Small Business Might Need a New Accountant

I met with a small business owner recently who had just purchased a retail business and was looking for a new accountant.  It seems that the current accountant was reviewing her books on a quarterly basis, preparing financial statements and doing the year-end tax returns – all typical accountant stuff.  The problem was that the accountant, while charging this small business a fairly significant amount of money, was not really adding any value to their business.   The bookkeeping, which was done by the previous business owner, was still being entered manually in ledgers (!). The quarterly accounting review consisted of checking the ledgers for mathematical accuracy and ensuring no major deductions had been missed without any discussion regarding the performance of the business.  Worst of all, the accountant was not responding to the client’s requests for a meeting.

There are many great accountants out there, however it is important to ensure that you are hiring someone who will compliment your business and add value.  Below are some of the qualities that should be considered either with respect to your accountant:

 

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Tax Filings for a Typical Canadian Small Business

When starting a business, it can be confusing and a little overwhelming to keep on top of the different types of tax filings that need to be submitted and the timing on each one.  Documents received from the government are not always clear as to what needs to be done, particularly if you are not familiar with what they are asking for.  It can be easy to put them aside to deal with them later, however this will usually result in more letters and if left for long enough, arbitrary assessments and interest and penalties. It is therefore prudent for registered and incorporated businesses to keep on top of their tax filing.
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9 Psychological Traits that Affect Our Investing and Business Decisions

Modern portfolio theory assumes that we are rational investors and invest only in efficient and optimal portfolios that provide the maximum return for minimum risk.  The truth (as posited by Behavioural Economists)  is that we far from rational and are subject to a myriad of psychological influences and behaviours that prevent us from not only making optimal investment or business decisions, but can in some cases turn us into morons.  We buy and hold too long or buy and sell too quickly; we refuse to accept losses assuming that we will recover our money or we sell losing investments way too soon; we are overconfident about our own abilities or place too much trust in “experts”; we maintain the status quo and do nothing or we change things too frequently.  The dichotomies of investing behaviour are numerous and fascinating and have lead to creation of field of study referred to as Behavioural Ecomomics.  Each of these behaviours also has a tremendous impact on our business decisions and are discussed below:

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Pricing Small Business Services: 3 Considerations

One of the most challenging aspects of starting a new business is knowing what to charge for your services.  In economics terms, the ideal price is where demand meets supply.  The problem, of course, is that at the beginning we tend to have a lot more supply than demand. This can lead to imprudent pricing decisions. Below are 3 considerations to take into account when determining the price for your services:

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8 Inexpensive Ways to Build a Client Base

Perhaps the most daunting aspect of starting a new small service based business is building a client base.  On the other hand, there is nothing quite so exciting as getting those first few clients. 

When trying to generate new business, it is important to cast a wide net as you never know where potential clients may be lurking.  There are many ways to build a client base, even with limited resources.  I have outlined some below:

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Employee vs. Self Employed: Criteria and Considerations

For the majority of income earners, employment status is pretty evident.  If you are going to the same place every day,  have an assigned cubicle with a computer and corporate stapler, and your boss tells you what you need to do, chances are that you are an employee.  Conversely if you have several clients, use your own laptop, and are worried about where your next  sale is going to come from, you are most likely, self employed.

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9 Factors that Affect the Value of Your Business

Blood, toils, tears and sweat go into building our businesse; however their values are very rarely a direct product of our efforts.  A recent bidding war between HP and Dell pushed the stock price of 3Par from $10.00 to $33.00 over a two week period.  The company ultimately sold for $2Billion.  It seemed that both HP and Dell decided that they needed a company that sold storage servers and were ready to pay far more than an independent valuation would have gotten 3 Par (the market had valued it at $700 million).  Of course most businesses are not 3Par, and most business owners need to take numerous factors into account when determining the value of their business.  Some of these are discussed below:
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5 Income Tax Tips from the Trenches

It is the time of year when many accountants and tax preparers live, breathe, eat and sleep taxes (leaving very little time to write about them!).  And while much of it is routine, there are numerous issues that arise, the treatment for which is not immediately apparent and can actually be quite interesting (perhaps more so to a tax nerd), some of which are compiled below:

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Invest in RRSPs or Repay your Mortgage?

One of the most common questions asked by Canadian taxpayers is whether they should use their excess disposable income to invest in RRSPs or pay down their mortgage.  Since contributions to an RRSP are made on a tax free basis,  reduction in taxes payable can be substantial.  Conversely,  higher mortgage payments can result in significantly lower interest expense.  As such, there several factors to consider when deciding which option is better:
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24 Cost Effective Ways to Promote Your Small Business

 After thinking long and hard you have decided that is time to launch your own business.  You have a great product or service, you’ve come up with a compelling business name, all the paperwork has been filed and you have picked out the perfect location (or setup a snazzy new home office).  Everything seems to be set for your new independent life as a business owner.  And then you realize that nobody except your spouse and cat knows about your new venture.   So, how do you bring your fabulous new product to your target market's attention?  One way is to use the “build it and they will come” approach.  This is usually not particularly effective (even Google, who historically launches products with little fanfare, could benefit from a little more marketing).  The other, more effective approach is to get out there and promote your business.  Of course in the initial stages, marketing budgets tend to be miniscule.  On the other hand, many new business owners have time on their hands, while they wait to be deluged by orders.  Below is a list of 24 cost effective ways to promote your small business:

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What Small Business Owners need to know about Tax Filing Deadlines for 2014

One of the responsibilities of being a small business owner requires having to submit a variety of tax declarations by specific deadlines or face consequences that involve penalties, interest and if left long enough, aggressive letters from Revenue Canada and Revenue Quebec.  The bad news is that there is no way around it and ignoring it does not make it go away.  The good news is that if you are prepared and organized it doesn’t have to be painful and can actually be quite straightforward with the right infrastructure.  The first step is to be aware of the deadlines and understand the obligations that go along with it:

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To Inc. or Not To Inc.

The decision to incorporate is one that most small businesses face at some point in their lifetime.  Incorporation, literally, represents the creation of a new person.  Whereas a sole proprietorship is an extension of one's self, a corporation takes on a life of it's own; it can give birth to subsidiary, marry via a merger and die with a dissolution.  It has to file it's own tax return, can be sued and has a set of rules that govern it's existence.  Below are some of the points to consider when deciding whether to incorporate:

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9 Year End Tax Planning Tips for Small Business Owners

As the end of the year draws nigh, it is time for business owners everywhere to start contemplating some end of year tax planning tips to not only ensure that they can maximize their tax deductions and reduce taxes payable, but to streamline the tax filing process in the New Year.  Even if you are incorporated and your year end date is not December 31st, it is a good time to take advantage of calendar year deadlines for personal tax planning purposes.

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7 Qualities of Highly Desirable Clients

“I want to create a rival to Twitter. So I want it exactly the same except where it says What’s Happening? I want it to say How are you feeling?”(From the very funny "Clients from Hell")

This pretty much sums up the type of client we don't want - ridiculous expectations, unimaginative and just plain clueless. Conversely, there are some clients that are a pleasure to deal with.  Ones that ask great questions, and make us feel happy to have chosen the entrepreneurial route.  The more important of these are listed below:

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How to Set Up a Small Business Accounting System

Many small business owners (including myself) tend to focus on the more glamourous aspects of their business like sales and marketing and product/service development.  As a result, accounting (poor misunderstood accounting) does not get the attention it deserve.  In addition to the perception that an accounting system does not necessarily add value, they can also be a little intimidating.  However, setting up an accounting system does not have to be complicated and should be considered essential for any small business or self employed owner (the reasons for which will be covered in my next post). A good software tends to handle most of the complexity of accounting as long as the data is entered accurately.

The primary steps in setting up an accounting system are represented below:

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Consider These Financial and Tax Implications When Buying a Home

The Canadian real estate market has been a good place to invest in recent years, although comparisons to the US real estate bubble, which finally culminated in 2008, are continuing to intensify. Potential homeowners often find themselves seduced by their vision of the perfect home in the perfect neighbourhood and end up in a difficult situation, referred to as “house poor”, where the majority of their disposable income goes to paying down their mortgages.  This can be avoided by ensuring that you realistically assess what you can afford and being financially responsible. 

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Breaking Up with a (Likeable) Client

Many of us have clients who are annoying, cheap, stupid , high maintenance or some combination thereof.  As a new business owner, we are often stuck with these clients because we need them.  However, we look forward to the day when we will have the thriving business that we so deserve, and fantasize about the spectacular way in which are going to fire them (you can shove your business into your rear orifice etc.)  This is actually a productive fantasy as can help to channel and concentrate anger.  Of course, in the majority of cases, a firing should be conducted with slightly less vigour.

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Last Minute Guidance and Information for Tax Filers

Accountants and tax preparers all over Canada are waiting with bated breath for the end of April and dreaded busy season, when sleep will no longer be a luxury and dreams cease to be tax reconciliation exercises.  At this point in the month, most tax filers have submitted their info and efiled (or mailed in) their tax returns.  Of course, there are always a few stragglers (accountants among them) who have either have not had the time to prepare their tax files or simply tend towards the easy yet stressful path of procrastination. For those that are in the straggler category, below is some guidance to help facilitate the process:
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