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…
- 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.
- 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.
- 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.
- 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.
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.
Changes to Ontario’s workplace laws have been the source of fury for many small business owners recently. As of January 1st, the province’s minimum wage increased to $14 per hour—up from $11.60—with an additional dollar increase due in 2019. A lot of small business owners seem to view this increase as a hit to their bottom line, with many grappling with the idea of raising prices, or cutting staff in order to balance the books.
Here’s the reality, folks—whether it be a rise in labour costs, or a rise in interest rates, your business will likely be affected. The important thing to remember is that there are always opportunities to get the value you’ve worked so hard for back.
Here are three ways small business owners can embrace the minimum wage increase:
- Account for rising labour costs in your long-term business planning
If the recent business headlines are any indication, a lot of small business owners have contemplated cutting back on benefits, hours, or even resorting to layoffs to make up for the changes to minimum wage. But let’s keep in mind that, in adjusted dollars, the national average minimum wage isn’t much higher than in the 1970s.
By accounting for rising labour costs in your long-term financial planning, you’ll have the opportunity to make small adjustments to your operations year-over-year—so, when a bump in minimum wage comes along, it won’t feel as big. If a restaurant business were to increase each menu item by 25 cents, they could cover the additional cost of labour without making a drastic change that would turn customers away.
- Focus on boosting productivity
One of the great things about change is that it forces us to take a good look at whether what we are doing is working to our advantage. Instead of looking at the minimum wage increase as an added cost, why not look at how your team can better manage their time to be more productive. Maybe that means adding new performance indicators for sales, or starting a new recognition program to motivate your employees.
- Prioritize your greatest strength: Loyal employees
Minimum wage is the cost of effort—your employees deserve to be compensated for their hard work. Try to find ways of cutting cost without jeopardizing employee incentives, like benefit programs or working hours. Think of it this way: the less staff turnover you have in your business means less money spent on hiring and training. If you treat your staff members right, they will be willing to work even harder for your business, which is priceless.
Do you still have concerns about the minimum wage increase affecting the value of your business? The Blue Sky team is here to help you put a plan into place to grow the value of your business. Call us today to get started: (289) 466-5210.
Goal setting is one of the most powerful tools in a small business owner’s tool belt. This practice not only helps you see where your business is today, but puts into perspective where you thought you might be. It helps identify strengths and weaknesses. It helps push us forward and spark new, innovative ideas.
The majority of Canadian small business owners expect 2018 to be a good year, with more than half anticipating increased revenue over the next 12 months. But, in order to build momentum towards that success, it’s important to set specific, measurable goals for your business.
Here are four goals every small business owner should build off of this year:
- Be “SMART” about your goal setting.
SMART is an acronym for specific, measurable, action-oriented, realistic, and time-based goals—a simple planning framework designed to help you create more actionable goals. For example, a common business goal is, “I want to make more money.” It’s a great goal, but it’s far too vague. How much more money do you want to make? How will you accomplish that? And by when?
- Find a way to hold yourself accountable.
Accountants are all about accountability. Our job is to help your business answer to its performance and help you see where you’re at in terms of reaching those goals. Long term, we can help you see what you have done relevant to the goals you had in years past.
- Be more adaptable.
I can’t stress enough how important it is for business owners to accept change, rather than be fearful of it. Whether it be an increase in minimum wage, or trends within your particular industry, change is often out of our hands—it’s all about how you deal with it!
- Plan for the future.
In my experience, most business owners aren’t doing enough to plan for the future. It’s important to think long term, yes, but it’s the short-term goals that will take you closer to that direction.
If you’d like help coming up with measurable goals for your small business the Blue Sky team is here for you. Let’s get to work and make 2018 your most successful year yet: 289-466-5210.