Why Resilience is a Key Ingredient for Entrepreneurial Success

Why Resilience is a Key Ingredient for Entrepreneurial Success

My favourite definition of resilience is the ability to get up one more time than you are knocked down. It’s one of the first lessons we are taught as kids when learning how to ride a bike, or deal with schoolyard bullies. But resilience is inherent to the success of entrepreneurs—it’s the drive that keeps you going when things don’t go according to plan (and trust me, they almost never go according to plan).

Running a small business is an education. You must develop the persistence to tackle the challenges that come your way, absorbing the blow of a risk or obstacle and overcoming it. Your resilience is what measures your success, because in finding a solution that betters your company, you better your understanding of the risks facing your business.

Here are a few reasons why resilience is key to entrepreneurial success…

It’s Science

A 2014 study published in the Journal of Economic Psychology examined the resiliency of entrepreneurs and how it impacts the success of their business. When looking at the three key factors of resilience—identified as hardiness, resourcefulness and optimism—researchers found resourcefulness to be a key factor in entrepreneurial success.

You Don’t Have All of the Answers

Entrepreneurs are self-starters—it can be hard for us to admit we don’t have all of the answers. In order to thrive you must accept that you may be ill prepared to address some of the challenges your business will face. The first few years of starting a business is all about taking punches. But if you open your perspective and think of your business as a work in progress—something that is malleable—then you will survive those obstacles and grow to become a better entrepreneur.

Money is Hard to Earn and Easy to Lose

You want to make the best investment decisions for your business, whether it comes to capital or the solutions you invest in to drive your business. Part of resiliency in business is learning how to sort through the weeds. Everyone will claim they have the best solution for your business—I’ve invested thousands of dollars into marketing campaigns that didn’t work, only to realize I know my clients better than a third party.

Many Success Stories are Built on Resilience

Some of the world’s most successful and well-known entrepreneurs have unwavering persistence to thank for their accomplishments. Just look at vacuum tycoon James Dyson—it took five years and over 5,000 prototypes to bring his bagless vacuum cleaner to market.

Every entrepreneur is different—it’s the combination of our strengths and weaknesses that make us unique as fingerprints. We work with small business owners to help them figure out what makes their business tick and foster that resilience that will make their business thrive.

We’re here to help you navigate obstacles and become a better business owner. Call us today: 289-466-5210 to find out how. We never charge just to chat.

When and Why to Incorporate Your Small Business

When and Why to Incorporate Your Small Business

There are pros and cons to incorporating a small business, much of which depend on your individual situation. But, in my experience, far too many business owners fail to ask their accountant about whether or not to incorporate.

When you incorporate you’re essentially creating a separate entity, separating yourself from the business you worked to build. As your business grows, a corporate structure can give you more flexibility and the opportunity to do better tax and succession planning than having a proprietary structure.

But when and why should you think about incorporating your business?

You’re Planning for Continuous Growth

What are your goals for your business? Does your business plan include goals for long-term growth (both financially and in terms of your workforce)? Are you hoping to turn your business into something that can be passed down by generations of your family? These are all goals that speak to eventually having a corporate structure. However, if your business hinges on your personal skillset, or you plan on shutting the business down once you retire, incorporating may not serve you in the long-term.

Your Business Carries a Lot of Risk

If your business carries a heightened opportunity to incur more risk, whether you work with children, food, or within the healthcare industry, then a corporate structure will give you a better umbrella of protection because you are indemnified from the liabilities of the corporation. By separating yourself from the business, you protect your personal assets in the event of a lawsuit. If you are a proprietor your house, cars, and investments are all on the table!

You Want to Take Advantage of Tax Credits

One big benefit that comes with incorporating is being able to take advantage of the lifetime capital gains exemption, which is available to qualified small business corporations. Each Canadian is entitled to a capital gains exemption of up to $813,600 on certain small business shares, as well as on qualified farm and fishing properties, which could save you a huge amount of tax over your lifetime—as much as $200,000 by some estimates.

Be Proactive, Not Reactive

Keep in mind that corporations generally require a little more accounting work and different types of tax returns, which are usually more expensive. If your company is only a year or two old and your sales are still small, don’t incur the higher maintenance costs of a corporation right off the bat, but have the conversation about the possibility of incorporating early on. A good accountant will tell you when you’re ready.

If you are a small business owner with questions about whether or not to incorporate, don’t hesitate to get in touch. We’re here to help you plan accordingly for the long-term success of your business. Call us today: 289-466-5210.

5 Ways to Give Your Small Business a Spring Cleaning

5 Ways to Give Your Small Business a Spring Cleaning

Spring represents a time of renewal—a welcome opportunity for small business owners to shake off the winter and embrace what’s ahead. As you know, we’re not just your ordinary Newmarket accountants; we’re about so much more than taxes and compliance. We’re here to help you identify and set goals that align to the reasons you started your business for in the first place. Fortunately, the arrival of warmer weather is the perfect opportunity for entrepreneurs to revisit business goals with a fresh eye and make any changes needed to reflect the reality of your year.

Here are a few things you can do to spring into success this season…

  1. Check that your business budget reflects the reality of your year.

A lot of business owners like to set a yearly budget, but that’s not always the most effective strategy. Where you thought you were going to be back in December may not reflect the reality of the New Year. Spring is a great time to reevaluate your budget and make sure you have enough money put aside for the upcoming visit from the tax man.

  1. Set aside time and money so you can take a break from running the business.

The beautiful spring and summer weather will bring ample opportunities to enjoy the fruits of your labour. But, in order to truly relax during your downtime, it’s a good idea to sit down with your accountant and make sure there are no discrepancies in your cash flow before taking a break.

 Tie up any loose ends preventing your company from moving forward.

It’s time to shake off the cobwebs of winter and officially close things off that anchor you to last year. If you have outstanding projects or filings from 2017, it’s a good time to put it behind you and focus on the year ahead. Remember, it’s difficult to move forward when you’re anchored to the past.

  1. Work with your accountant to become more efficient.

Are your accountant fees too high? A lot of small business owners are guilty of inefficient bookkeeping, which can cost you more money at the accountant’s office. We’re here to help make your money work for you.

  1. Check in with the people supporting your business.

If you’re large enough to have staff, or utilize contractors, touch base with them to work on problem solving and build a stronger professional relationship. Remember, good businesses are built on the efforts of great teams.

Have questions about spring cleaning your small business? At Blue Sky, we don’t charge to chat. Give us a call at 289-466-5210 and we’ll get you back on track for the year ahead.

 

Assessing Your Company’s Financial Performance Ahead of Tax Season

Assessing Your Company’s Financial Performance Ahead of Tax Season

With tax season hot on our heels, many business owners are turning to their accountants for a better look at their financial performance. We all want to see how we are doing before paying our taxes (after all, profits must be made for taxes to be paid), but this is a great time to go over what your goals were in the last year and take your current performance goals into consideration.

Most performance results start with a simple process—but first you must have an expectation. You can determine nothing without a good benchmark. For some business owners that can be a budget, a competitor, or an industry average. But, the context of your performance depends on the benchmark, which is why it’s important that you understand what different benchmarks mean to your company’s bottom line.

Comparing your results to a previous year will tell you how you have grown as an organization. An increase in sales, or profit, would be a positive for your business.

Comparing your results to your budget will tell you how you beat, or fell short of your expectations for the year. Comparing your actuals to your expectations is a good practice for business owners because it will help you make sense of and redefine your goals moving forward.

Comparing your results to industry averages, including industry growth rates, will help you determine whether you are performing well compared to competitors in your marketplace. For example, if your industry increased its sales but you didn’t, that might show that you’ve lost market share.

Another great tool for measuring performance is a variance analysis, which acts as a way of measuring your productivity and profitability relative to those benchmarks. A variance analysis looks at the difference between actual and planned profit. For example, if your goal was to reach $10,000 in sales, but your actual sales totaled $8,000, your variance analysis would yield a difference of $2,000. By looking at these numbers month over month, you’ll be able to visualize fluctuations in your business and account for them.

Making sense of your performance is all about visualizing how successful your projects were. As accountants, we can help you understand where your results came from and help you plan for the next period of growth.

If you need help making sense of your numbers, give us a call and let’s get to work: 289-466-5210.

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