The Delegation Dilemma: June 24th, 2022
Hello All,
According to Statistics Canada, in 2019, 54% of all businesses had between 1 and 4 employees. It is likely (70% according to some sources) that the majority of these represent businesses with a single founder/employee/shareholder.
This is fine for many business owners, particularly contractors and freelancers who simply provide a service and take on a finite number of clients. However, there does come a time for many business owners when you start to feel overwhelmed. Your area of expertise is the product or service that you provide and perhaps you have a background in something else such as marketing or finance. You are not, however, an expert in all areas of running a business. Additionally, you might be spreading yourself so thin that your business is suffering or at least not reaching its full potential. If you do find yourself working at every available moment, thinking about your business even when you aren’t working and the idea of 8 hours of sleep seems like an unattainable luxury, then it is likely time to hire some help.
As someone who has struggled with delegation, it can be difficult to relinquish control. You know your business better than anyone and you don’t believe that someone else will be as diligent, competent or efficient. Hiring the right person can be a huge challenge as simply interviewing them isn’t necessarily enough to know if they will do a good job. Also, in addition to all your other tasks, you are now taking on role of manager.
The best way to handle the hiring decision, in the early stages, is to identify what parts of the work that you are doing are mechanical/rote and easy to replicate as well as tasks that you abhor and therefore avoid. These can be making travel arrangements, or maintaining an email list or posting to social media or doing your own bookkeeping etc. Each of these can be easily delegated and finding the right person isn’t as hard as you think. You can hire subcontractors at various marketplaces such as Fiverr, Upwork, Freelancer.com and many others. This option can be great if only want to outsource a few tasks for which you don’t need a full time employee. Alternatively, if you do want someone who is dedicated to you and whose work schedule you can control, hiring an employee or more might be the better way to go. And contrary to popular belief, taking on employees is relatively straightforward (the administration of which can be fully outsourced at a relatively low cost).
In the short term, taking on help means that you will have more work as you have to find the right people and train them. In the long term, however, not only will this help make running your business easier, but it can also make it more profitable and ultimately improve your quality of life.
Blog posts
Below are a couple of blog posts about what you need to do before hiring employees and how to take care of payroll.
Guidance on Registering for Payroll and Remitting Source Deductions
There comes a time for many small business owners when they decide that they need to hire employees. This is usually an excellent sign as it means a) the business is growing and b) the small busines
4 Alternatives for Preparing Your Small Business Payroll
Paying salaries to employees (or yourself) requires more than just determining the gross amount to be paid. The Canada Revenue Agency and Revenue Quebec require that employers calculate a variety of
Small Business Articles/Tips
When to hire employees This article from Entreprenuer gives some insights on when it is time to hire new employees.
Also, some information from the government on hiring and managing employees including grants/subsidies.
Tax News:
An interesting case of a fraudulent tax scheme involving 4 Cape Breton women fabricating GST/HST claims
Updated resources from CRA on qualifying and applying for SRED credits for your business.
QuickBooks Tip - Import Lists
For those of you with payroll costs or if you are hiring for the first time, entering salaries will depend on the way in which you are processing payroll.
If you are using QBO payroll, it will automatically be recorded internally.
If you are using a third party application, there will usually be an integration with QBO that you can customize and then automatically have it record the transaction
If you are doing it manually, you can simply enter the total amounts paid to a single salaries or payroll expense account on the profit-loss, or you can separate it out into salaries, employer deductions etc. If you are doing it manually, make sure you have the details, in a spreadsheet that will allow you to generate your T4 at year end.
Books and Resources
Small Business Tax Facts(Sole Proprietorships/Registered Businesses/Self Employed Workers)
This book helps you have a better understanding of tax (brackets, tax rates, deductions etc), how it applies to your unincorporated small businesses and how to do your own tax return (or at least understand what your accountant does). It also includes a comprehensive breakdown of deductible expenses, by category with special sections on more complex deductions such as home office, vehicle and capital cost allowance.
FastStart Your Corporation(Corporations)
A step by step guide to starting your small business corporation, including what you need to know about incorporation, setting up your accounting and tax considerations.
QuickStart your QuickBooks(Sole Proprietorships and Corporations)
A comprehensive guide that takes you through the many features of QBO and gives you step by step instructions on how to setup and work with QBO day to day. It is ideal for beginners who have never used QBO before and also for those who are currently using it, but have questions or need guidance.
FastStart Your Business (Sole Proprietorships)
A step by step guide for anyone who is planning to start a Canadian business or become self employed (and does not want to incorporate) and wants to know what they need to do or simply has questions.
Small Business and Your Dividends (Corporations)
For incorporated small business owners who want to know more about small business dividends, the differences between salary vs dividends and which is better and step by step instructions on how to file your own dividend declarations (T5s).
Use discount code “special” to save 20% on any (or all) book(s) when you purchase from the website.
Please note that all books on my website are in PDF format.
If you prefer a print version, all books are also available at Amazon . Note that print versions purchased on Amazon include a complimentary PDF - you just need to email me and include proof of purchase.
Free Resources
Business 2022 Tax Deadline Calendar
Starting A Corporation Checklist
Start Your Business Checklist
Dividend Declarations Checklist
Small Business Tax Return Checklist
QBO Set Up Checklist.
Small Business Calculators
Previous newsletters.
Consultations
I also provide consultation services where I can answer your specific questions relating to your small business and/or finances, provide clarity and give you guidance. Additional details can be found here and here.
Note that I no longer provide ongoing accounting or tax preparation services.
Reviews/Feedback
I would love to hear your comments on my current blog posts, topic ideas for new blogs, book feedback or anything else that you want to talk to me about. You can use my feedback form or email me directly at ronika@montrealfinancial.ca.
For anyone who has purchased my books through Amazon or directly and found them useful, I would be very grateful for a review on Amazon (to leave a review you only need to have an account with Amazon even if you did not purchase the book from there).
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Wishing everyone a very great (holiday for those in Quebec) weekend!
Ronika