Corpcentre's Blog

October 30, 2009

Statistics Canada: 56% of Canadian Small Businesses are in Quebec & Ontario

In July 2008, Statistics Canada released facts and figures about the Canadian business community. The figures released indicated that, as of the end of 2007, Canada had more than 2.3 million businesses. (This figure reflects a decline of 100,000 businesses over the course of the year). This number included small businesses that met at least one of three minimum criteria. To qualify as an official small business, the establishment must have at least one paid employee (with regular payroll deductions). The business must have annual revenues of at least $30,000. Finally, the business must be incorporated and have filed a federal tax return at least once in the previous three years.

In regards to self employed Canadians, the number rose at an annualized rate of 1.5 percent between 2000 and 2007.

More than half of all Canadian businesses, some 56 percent, are located in Quebec and Ontario. Roughly a third of the businesses – 36 percent – are located in the western provinces and a mere 7 percent are located on the Atlantic side of the country. Less than 1 percent of Canada’s businesses are situated in the Northwest Territories, the Yukon, and Nunavut.

However, when examining the business to population ratio, the numbers swing dramatically. The national average is 70.7 businesses per 1000 population. Ontario and Quebec fall below the national average while the Yukon has the highest ratio at 91.4 establishments per 1000.

Statistics revealed that entrepreneurs were more likely to reside in rural areas, rather than urban centres. The ratio of small businesses relative to population was 50% higher in rural regions of the country.

Finally, the survey concluded that 60 percent of small businesses are situated in areas that have large local populations, affording a strong employee base and good market opportunities.
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October 28, 2009

Starting a Small Business Survey: 12% to Establish Internet Enterprises

Starting and owning a small business appears to be the aspiration of many Canadians, according to the findings of a poll conducted for the Royal Bank of Canada (RBC).

Over the next several years, some 3.3 million Canadians intend to start their own business. Moreover, the survey found that there appears to be a change in preferred industry focus of would-be entrepreneurs. The desire to open a retail business dropped by 2 per cent from previous surveys; personal services and arts also dropped by 2 percent; and business services/consultancies dropped by 3 percent. The top industries of choice appear to be Internet related businesses. Nearly 12 percent of those interviewed plan to establish an online enterprise.

The RBC survey also rated advice by veteran entrepreneurs for newcomers to the business world. The top piece of advice was to do thorough research before setting up shop. Know exactly what you’re getting into. Learn about your competition and be realistic about what share of the market you can capture.

Other pieces of popular advice of what to do before opening a new business included preparing a detailed business plan, networking with others in the field, allocating time and resources for marketing, surveying potential customers, and selecting the best site for the new enterprise.

The survey revealed that 61 percent of Canadian business owners are satisfied with the way they opened their business and would not change a thing, if they had to start over. More than 60 percent felt that, looking back, they probably should have started at a younger age. 58 percent of those surveyed felt that it would have been beneficial to get more financial advice at the onset.
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October 27, 2009

Organizing Your Small Business Home Office

Filed under: business,Incorporate in Canada,small business,small caps stocks — corpcentre @ 5:52 pm

More and more people are operating businesses from home, or keep an office at home. One of the most commonly overlooked tasks is keeping the home office organized.

For those of us who spend many hours deep within the confines of our home office, the surrounding environment all too often takes on the look of a natural disaster. Why not take a few minutes and put some order in your home office? After all, there is nothing worse than talking to an important client on the phone, reaching for the client’s file, and coming up with a stack of takeout food menus.

Start throwing things away! Be brutal with your castoffs. Do you really need a collection of telephone directories for the last several years? Chances are slim that there is a growing demand for chewed pencil stubs. Contrary to popular folklore, empty chewing gum boxes prefer not to live on desktops. Choose a few items to throw away each day. You’ll feel good about it!

Let’s admit it. Almost every bulletin board contains layers of long forgotten items. Try digging down several layers and leave only the current important items. You may even free up space for new memos and current pictures.

How about the junk drawer? That’s the drawer with the broken tape dispensers, dried-up pens, broken scissors, etc. It never fails that the special marker that you need is buried under mounds of old junk (and a semi open jar of glue). Take some time to organize that drawer so that you can find what you need, when you need it.

It is not true that every document ever read must stay in the filing cabinet. Old ones can be shredded. Others can be stored in cardboard cartons and put away in a storage area.

Finally, take a good look at your desktop. Take pity on your current work material and allow it to sit in a clean, orderly environment. It will respond in kind by being readily available and easily located when you need it.

Business is all about organization. This should extend to your personal work environment as well.
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October 26, 2009

E-commerce Provincial Sales Taxes

E-commerce has greatly increased many retail sales. Businesses, large and small, can now reach customers from coast to coast with relative ease, if they have a presence on the internet. However, a very interesting – and tricky – question arises from all these sales. Does a website vendor in one province selling taxable goods and/or services to customers in other provinces have to charge and remit other provinces’ sales taxes?

Would that the answer were simple and straightforward. Just as taxes differ from province to province, so do the requirements for inter-provincial commerce.

Keep in mind that when dealing with tax related issues, it is better to err on the side of caution. Therefore, you should consult with your accountant and/or tax advisor to verify your own personal situation. Similarly, you can obtain detailed information from the finance/revenue ministries of the specific provinces in which you are conducting online business.

There are a number of factors that will determine your tax collection situation. As many small business owners are aware, you are exempt from charging and remitting the GST if you are a small supplier. However, even a business with small supplier status may have to register for GST if they conduct business in provinces that currently have HST (Harmonized Sales Taxes). The GST is part of the HST. Therefore, de facto, you will have to charge and remit provincial taxes in those provinces.

Some provinces have passed legislation requiring out-of-province vendors to register for their provincial taxes. Other provinces “suggest” registering.

Were you aware of the fact that if you, as a vendor, do not collect RST (retail sales tax) in a specific province, the responsibility falls onto the purchaser?

The tax issues are complicated and the requirements, and loopholes, are plenty. Before pursuing your sales in other provinces, check the tax requirements carefully with a qualified tax professional.
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October 25, 2009

Need a Small Business Loan?

Eventually, most small businesses need additional capital, whether for start-up purposes or to expand an existing business. The technical process is usually straightforward; you have to ask for the money, whether from a financial institution or a private individual. Either way, the lenders will have some hard questions that you have to answer to their satisfaction. Being properly prepared is definitely to your advantage.

The lender will want to know what the money will be used for and how you will be able to repay the loan. Therefore, you should have a detailed business plan ready at hand as well as cash flow projections for your business. Additionally, a bank or commercial lending institution may wish to review your tax returns.

Prior to your approaching the lender, you may wish to check your credit rating via a credit report. Chances are very good that the lender will order such a report. Check your rating before the lender does. If you do not have a satisfactory credit rating, try and repair it before seeking a loan.

Be well-versed in all the details of your business and its finances, present and projected. Remember that applying for a loan is partly dependant on presentation, not just documents. You have to make an impressionable pitch to the lender and be able to answer all questions satisfactorily.

One area that shouldn’t be overlooked is how you plan to share the risk with the lender. How much are you investing personally? This is equally important to the lender as is your knowledge of your business.

Consider preparing to apply for a loan as if you were making the most important sale of your career. If you can adequately impress and convince the person sitting opposite you, you may close the deal.
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October 21, 2009

Telephone Etiquette for Small Business 101

It may sound like a trivial subject, but that is far from the truth. Even in this computer age, the telephone is your front line. More often than not, a business is judged by how one is received over the telephone. Give the wrong impression and the transaction is over.

Try and be prompt. Don’t let the telephone ring off the hook. No more than a few rings if necessary.

It is important to convey enthusiasm and professionalism. A warm, clear response, coupled with moderate tones and proper language convey a highly, professional image. Accents are most acceptable but improper language is not. Try and avoid using slang and leave professional jargon out of conversations with laymen.

Avoid leaving people on hold for an extended period of time. Even though the music on hold may be quite pleasant, remember to check back every half minute or so. If the desired person is not available, or will not be free to take the call for several minutes, offer to take a message before the caller asks.

We all have bad days. However, the rule of thumb is to leave it at the door. Don’t convey your negative feelings to the caller.

Speakerphones should be avoided. The caller can hear when they are speaking to someone on a speaker. It gives the impression that you are simply too busy to lift the receiver.

If your telephone system is automated, be sure that the recorded voice sounds professional and that the information in the system is current.

Finally, be prompt about returning calls. If someone left a message, they do wish to speak to you. Good business sense dictates that a timely reply is the best course of action.
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October 20, 2009

Will Anti-Spam Legislation Put Spam Back In The Can?

Filed under: canada economy,email,spam,technology and business — corpcentre @ 4:55 pm

If you have a computer with internet access, you receive SPAM. All that unwanted “junk mail” that clutters up you e-mail inbox is SPAM. The advertisements, the pleas, pledges and proposals, the prize notices – all this constitutes SPAM. Canada ranks as one of the leading countries for origination of SPAM. Current proposed legislation in Parliament has targeted SPAM but the business community has targeted the legislation.

The Electronic Commerce Protection Act, otherwise known as Bill C-27, will require a marketer to obtain implied or explicit consent from the consumer before sending them an e-mail. The Canadian Marketing Association (CMA), representing 800 of the nation’s largest corporations, is lobbying MPs to change the proposed bill. The CMA is proposing that consumers should have to opt out of receiving commercial e-mail messages.

Supporters of the bill in Ottawa fear that an opt-out condition will water down the legislation and render it fairly useless. A similar action took place last year in legislation for telemarketing rules. Altering the bill caused it to have too many exceptions to make it practical to consumers.

The vast amount of SPAM that travels through the internet in Canada today undermines confidence in the internet as a platform for personal and business use. SPAM is considered by many to be an invasion of personal space and consumers are tired of being bombarded by advertisements that do not interest them but merely clutter up their e-mail.

While the business community has a strong vested interest in protecting this advertising option, MPs from both sides of the political arena are uniting to support this bill to protect consumers’ rights. Ottawa wants to send a clear message that Canada will no longer be an international haven for SPAM.
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October 19, 2009

Canadian Broadband’s Poor Rating

In a recently released report commissioned by U.S. regulators, Canada, compared to other leading nations, rates very poorly in areas such as national broadband adoption, network capacity, and prices.

Employing results from a detailed survey conducted by Harvard’s Beekman Center for Internet and Society, Canada ranked a disappointing 22nd place overall out of 30 countries. Japan, Sweden and South Korea ranked highest in the survey. The United States placed 13th in the survey.

The survey was commissioned as a basis for the U.S. Federal Communications Commission (FCC) to create a national next-generation broadband plan.

Broadband service is viewed as a key factor to enable economic growth that can benefit a wide range of intrinsic services in areas such as telemedicine and management of transportation and energy systems. It can also greatly reduce infrastructure costs for businesses.

European nations support open-access policies to spur competition among service providers. Open access allows new companies to lease lines from a network owner. This has proven to be a highly effective method of promoting competitive pricing to the consumer market. Currently, both the U.S. and Canada have yet to adopt this policy. Both nations rely upon competition between cable and phone companies to develop better and cheaper services. The Beekman Center study concludes that this method is highly ineffective for the short and long term of the industry.

Canada’s CRTC (Canadian Radio-Television and Telecommunications COMMISSION) did implement open access rules in 1997 but, by allowing network owners to charge the highest lease rates on the planet, the CRTC effectively hampered any positive development. With rates as much as 70% higher than some nations, open access did not progress in Canada.

With a rating that has continued to decline over the last decade, Canada must seek to revamp its broadband policy if it wishes to compete with the world.

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October 16, 2009

How Important are Credit Checks for your Small Business?

Imagine conducting business in an ideal world – a world where everyone is honest and truthful and the thought of cheating someone never enters the conscious mind. Nice fantasy but hardly reflective of our modern society.

Not to cast disparaging remarks on the average consumer. Most of us are honest and hardworking. We pay our taxes and our bills on time. However, many a small business owner has fallen victim to the customer who has been extended credit and fails to pay the bill, leaving the business owner absorbing the debt.

Credit, both extending and receiving, has become a way of life in our world. Truthfully, it is not a modern concept. Credit has existed probably for as long as commerce and trading. Similarly, the unpaid debt has probably existed equally as long. Today, though, there are modern tools to help afford the business owner a certain degree of protection.

The credit check is a tool that can save the business owner much grief and heartache. Before extending credit to an unknown customer, it is wise to invest in a credit report, especially if a large amount of credit is being considered.

A credit report, obtainable for a fee through several agencies, gives complete information about the customer. The report will include the customer’s historical payment data, records of any bankruptcies, lawsuits, liens, or any other court judgments. Based on the data, the report will also offer a risk rating that predicts the likelihood of bill payment by the individual.

Credit in business is partially risk. Risk management, via a credit report, is an advisable investment for your business.
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October 15, 2009

Rating Online Business: The Star Rating System

Many of us have been a victim of the stars. No, this doesn’t refer to astrology. Rather, the star rating system that is prevalent on many internet shopping sites has led many a shopper astray.

One of the big questions is who determines how many stars a product or a site rates? Another thought is how accurate is the rating? Also, who monitors the accuracy and validity of these ratings?

In many instances, the answer to all three questions is identical: the owner of the site. This is not to say that all ratings are fabrications. Many websites are quite honest and respect the consumer market. However, there is no limit to sites that serve as clearing houses and have little or no control over who posts products or services for sale.

In reality, the star rating should be used to reflect an average of opinions from actual consumers. However, fears of honesty and good old fashioned greed have led many sellers to conduct virtual opinion polls of likewise virtual customers.

The truth is that it is highly unlikely that all products and services have top notch ratings. Even a superior product is bound to have its critics. On the other hand, studies conducted by market research groups have shown that 65 percent of word-of-mouth is positive and only 8 percent is negative. In other words, it is quite likely that many shoppers who have not been pleased by the product or service they purchased online may prefer to say nothing rather than spread negative feelings.

The bottom line is that a website is no different than a conventional store in terms of purchasing. Don’t believe everything that you read. Do your own research. Speak to friends who have purchased that product or frequented the seller. Educating yourself is the best consumer protection.

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