Corpcentre's Blog

April 18, 2010

How to Use Failure to Your Advantage

The word “failure” has negative connotations. It is hard to think of anything positive when discussing failures. Yet, many business leaders will tell you that failure is not the end of the world, nor is it only negative. While a business failure certainly implies setback, it also leaves the door open for improvement, change and opportunity.

American business leaders have embraced the opportunities presented by failures while Canadians lag behind in this respect. The inability or unwillingness to compete is a common denominator of many Canadian business disasters. One of the first lessons to be learned from a business failure is not to cut back but, rather, to dive into the marketplace and compete with all your might. Learn from failure and allow it to be the catalyst that is your driving force. In California’s Silicon Valley, business has embraced the concept of “failing well.” You made good decisions but circumstances were beyond your control. If you are good at what you do, you’ll eventually succeed. In Canada, the opposite is more common. If your business attempt failed, you’ll have a very tough time securing capital for another venture.

Failure in business can be one of your greatest teachers. Successful corporate leaders have learned from their mistakes and impart that wisdom to their employees as well. By sharing this wisdom with one’s staff, it carries the message that even the boss is not perfect. Moreover, it encourages staff to also learn from their mistakes. Every successful mega-company started small and did not achieve greatness overnight. When your staff appreciates the growing pains of a company, they can become part of the driving force to continue propelling the business forward.

This doesn’t mean that one should create a culture that focuses on failure. Just the opposite is true. A business environment should strive for success. Ultimately, that is the goal that we wish to achieve. However, every successful path has setbacks and failures. Learn to appreciate that none of us is perfect and we can learn something new everyday. The only way to avoid failure is to stop trying to achieve. Use every setback to your advantage and ultimately you will win.

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April 4, 2010

What Government Funding Can I Get for my Business?

If you are like most Canadians in business, you’ve probably wondered if you can ever get something back from the government, after you’ve paid all those taxes over the years. It seems only fair.

The best situation is discovering that you are eligible for a government grant or contribution. Grants do not need to be repaid and contributions are only repaid in certain cases. The problem is that these are few and far between. Generally, grants are available for specific programs and have very specific criteria. For the most part, grants usually are provided for specific industry sectors or for certain demographic groups.

On the other hand, there may be other government options that are applicable to your business. For example, you may be eligible for a government loan guarantee. This would enable you to get a loan that you might otherwise not receive approval for. With the government behind you, the bank will be far more willing to talk with you.

If you hire employees that have certain characteristics, you may be entitled to wage subsidies to help offset their salaries. Check with your tax advisor who is currently on the subsidy list and whether your business can benefit from these employees.

If your business makes certain investments, you may be entitled to a tax credit or refund. Check the current information with the relevant tax authorities.

If your business does not qualify for a commercial loan, you may be entitled to a loan from various government departments. Also, these government offices sometimes offer loans to businesses at lower rates than commercial lending institutions. A little research may save you some money.

In general, before assuming that your neighbourhood bank is the only lending option that you have, check what’s available from the government. You may be pleasantly surprised.

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March 3, 2010

Female Entrepreneurs – Unite!

No longer can it be said that business is a man’s world. Female entrepreneurs are an integral part of the business world. According to a report from the Organization for Economic Cooperation and Development, Canadian women comprise 30% of business across the nation. This percentage is larger than any other country. In the United States, during a ten year period beginning in 1997, businesses owned by women grew at double the national rate of all U.S. private businesses.

So, the good news is that women are making their mark on business in substantial numbers. The bad news is that they are not using these numbers for any collective purpose or advantage.

There is power in numbers. However, most female entrepreneurs seem to prefer worrying only about themselves. An umbrella organization, Women Entrepreneurs of Canada, whose mandate is to create a more collaborative climate for women business owners, is fighting an uphill battle, as reported to a small core group of members at a recent meeting of the organization.

Rather than share ideas and efforts, the group reported that female business owners prefer to do for themselves and not share. Sharing resources and ideas is simply not the norm in female businesses, leading to duplication of efforts and a loss of a potentially powerful female lobby.

Men invest more time and energy developing their businesses. Thus, women cooperating with each other could greatly strengthen their businesses by uniting their efforts. Also, women are less confident than men in certain key business tasks and could certainly benefit by supporting each other to get over hurdles.

On the other hand, in a male dominated world, women still encounter certain prejudices in business. A strong female lobby could help push for changes in the business world that would lead to parity in general, while addressing the distinct needs of female entrepreneurship when applicable.

This organization, while small at present, is picking up speed and hopes to build a strong, influential coalition of female entrepreneurs to help the nearly one third of Canada’s business community leadership.

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December 1, 2009

Credit Card Code of Conduct

If you own a retail business, you will understand exactly what the issue at hand is all about. How much of your hard-earned money goes to the credit card companies through fees and charges that seem to keep rising?
 
Canadian Finance Minister Jim Flaherty recently announced the implementation of a voluntary code of conduct for the credit card industry. The new Code of Conduct has come in response to increasing complaints by small businesses about the excessive fees that they are being forced to pay.
 
The voluntary Code of Conduct, which may be revised over the next couple of months according to Mr. Flaherty, lists measures to give merchants freedom of choice in regards to which payment vehicle to use. The Code requires posting of online information regarding the interchange fees charged to retailers. It will also require the credit card companies to give retailers 90 days notice of any fee changes.
 
Responding to the announcement of this new Code, retailers view this as a positive development but would also like Ottawa to create an oversight body to ensure adherence. Creation of a parliamentary committee was one possible suggestion.
 
Mr. Flaherty pointed out that this Code of Conduct is voluntary and he hopes that the credit card companies will respond positively by voluntarily adopting the measures set out for the industry. The alternative, according to the Finance Minister, is to regulate the industry through legislation. But, as the credit card industry has objected vehemently to regulatory legislation, it is hoped that they will adopt the voluntary measures.
 
As other voluntary codes of conduct have been adopted by other industries, retailers hope that the credit card giants will similarly adopt these new guidelines.

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October 11, 2009

Looking for Startup Money?

Money makes the world go ’round. It also gets your startup business up and running. Many a new business venture has failed due to a lack of cash to get the operation off the ground and get through the initial difficult months until the business starts generating revenue. Unfortunately, there are no guarantees as to where you will find the necessary capital. Many entrepreneurs tend to follow a similar path in seeking funds.
 
The most popular place to look is your own pocketbook. Often, people will mortgage their homes or sell property and possessions. Certainly, there is risk involved but business involves risk and personal commitment to the venture is crucial. Of course, “personal” funds may also extend to family and close friends. Most likely, they will be far more supportive than commercial lenders and their terms are likely to be far more favourable.
 
Next in line is your neighbourhood bank. Assuming that you have a creditworthy relationship, this may be the ideal place to secure a startup loan. Also, a line of credit is most important for your business. You may not need these funds initially but they may come in handy down the line.
 
Do your research well. There are numerous loans and grants available for new small businesses from government agencies and business associations. Your local banker or your accountant may be able to help direct you to sources of funds. Similarly, professional organizations may have helpful information.
 
Investors may be the right answer for you. Although many investors prefer to become involved with established businesses, the right idea at the right time may attract investment funds to you. Your business plan should be designed with investors in mind. Be prepared to change the business plan as necessary in order to interest a potential investor.
 
Finally, don’t limit yourself to one source of funds. It may be possible for you to finance your startup form several sources. Decide what is best for your needs and don’t be afraid to seek advice from professional advisors. 
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October 5, 2009

Canadian Recovery Indicators

Recent economic records this summer seem to indicate brighter days on the Canadian horizon. Earlier, analysts had predicted a $100 million surplus in July. The reality, though, was quite different. Rather than a surplus, Canada experienced a near record deficit in July 2009 of $1.43 billion. This was surpassed only by the May 2009 deficit of $1.45 billion. Despite these figures, economic analysts seem buoyed by the surge in imports. The sharp rise in imports and exports seem to indicate that recovery from the global financial crisis is on the horizon.

Import figures for July reflected an overall 8.3 percent increase from the previous month. This positive figure included a 10.9 percent increase in machinery and equipment imports, an impressive 18.7 percent rise in automotive products, and a similarly encouraging 18.6 percent rise in energy products.

Exports rose by 3.3 percent in July, primarily due to increased shipments of equipment, machinery, and automotive products. 73 percent of all Canadian exports in July were to the United States but, due to the sluggish American economy, this figure was down a whopping 35.2 percent from July 2008.

In order to stimulate the economy, the Bank of Canada has promised to leave interest rates at their current record low. The recent trade figures have not caused the Bank to change its current position. Responding to the Bank’s announcement regarding interest rates, the Canadian dollar rose to 92.46 U.S. cents from 92.10 U.S. cents.

Analysts insist that the increasing deficit is not a prime cause of long term concern. The true indicator is the rapid acceleration in trade volumes. The rises in imports and exports indicate increased commercial activity and the true beginnings of economic recovery.

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100 Million Dollar Development Program For Southern Ontario

Prime Minister Stephen Harper’s Economic Action Plan, officially released in January of this year, is the result of consultations and discussions with interest groups, business leaders, provincial and municipal governments and the Canadian public. The global recession has affected each province differently and, similarly, different communities have specific needs. As a result of the specific economic challenges faced by communities and businesses in Southern Ontario, a new federal agency was created to address those issues.

On August 13, Mr. Harper launched the new Federal Economic Development Agency for Southern Ontario (FedDev Ontario). As economic recovery begins in Canada and in nations around the world, FedDev Ontario will help workers, businesses and communities in Southern Ontario take advantage of various economic opportunities.

The new agency will use several new or existing programs to expedite the flow of funds to Southern Ontario. For example, $100 million will be available via the Southern Ontario Development Program to promote economic development and job creation. An additional $350 million from the Community Adjustment Fund (CAF) will provide short term economic stimulus to communities affected directly by the recession. The CAF will also provide $30 million to the Community Future Development Corporation which provides important services to businesses and entrepreneurs in Southern Ontario. The Business Development Bank of Canada will invest $50 million in Southern Ontario. And, finally, more than $67 million in grants will be available from the National Research Council (NRC) for technical innovation leading to wealth creation. And, the Industrial Research Assistance Program of the NRC will receive an additional $27.5 million to foster innovation among small and medium-sized businesses in Southern Ontario.

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October 4, 2009

Joint Canada/B.C. Jobs Program

British Columbia has been seriously affected by the global recession. As a province with many communities heavily reliant on resource-based industries such as mining, agriculture and fishing and manufacturing, the job market is in a severe crisis. Responding to the needs of these western communities, the federal and provincial governments have banded together to create immediate jobs and help workers impacted by the recession.

A $14 million investment has been made recently through the Community Adjustment Fund and the Job Opportunities Program. 45 new projects will be funded, creating more than 470 jobs for laid-off resource workers. The projects are endorsed and supported by local communities. The programs are not stop-gap measures but will hopefully create foundations for long-lasting prosperity.

However, this is but one phase of a much larger program. The Job Opportunities Program was first announced in May 2008 with an initial investment of $25 million. In July 2009, the federal government and the B.C. provincial government, both committed to maintaining financial stability and keeping Canadians working during this recession, each committed an additional $30 million to the program. The Community Adjustment Fund, part of Canada’s Economic Action Plan, is a two year, $1 billion nationwide program to support job creating projects and maintain employment in rural communities. Nearly one third of the program’s funds, $306 million, are being directed to the four westernmost provinces of Canada. The impact of the recession has been felt much more in the west than other provinces across the nation.

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October 3, 2009

How Canada Prepared for the Crunch

Looking back just a little, the current recession took hold in 2007 when the inflated U.S. real estate bubble exploded. The speed with which the downfall snowballed surprised many but did provide enough time for legislators to take early action. The Canadian government, under Prime Minister Stephen Harper, was one of the first to prepare for the coming financial challenges.

The first step was introducing legislation in 2007 for permanent tax reductions for Canadian homes and businesses. As the recession hit the U.S. in early 2008, these new tax cuts took effect, helping sustain consumer spending and pumping billions of dollars into the Canadian economy. The lower GST is a blessing for individuals who have more of their hard earned dollars to spend. Canadian businesses now benefit from the lowest corporate tax rate among G7 industrialized countries, providing cash for continued corporate growth and creating new jobs.

During the country’s strong economic years in 2005-2006, the government wisely reduced the national debt by $37 billion. By entering this recession period with a low debt burden, the government has had flexibility to run a short term deficit and provide funds for job creating investments and other economic stimulus programs.

Another preventive measure undertaken by the Harper government was regulating the mortgage market. The maximum term was reduced to 35 years and a minimum 5 percent down payment is required for government-backed mortgages.

Finally, responding to a cautious banking sector, the government has enacted programs to provide access to financing for consumers, households, and businesses. The government has not replaced private lending but, rather, is working in a cooperative effort with financial institutions to encourage lending and provide a network of guarantees.
 
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September 23, 2009

It’s Start-Up Time

Filed under: canada economy,canadian business,canadian jobs,entrepreneurs — corpcentre @ 5:57 pm

The recession is in bloom. People fear for their jobs. The economic future is questionable. It may be the perfect time to start your own business. Though it sounds rather absurd, this may be the ideal time to become self employed. True – self employment is not easy but, in a climate where one is never certain how long they will be guaranteed a regular salary, being your own boss may provide the best security for the present and the future.

Starting your own business carries certain risks. However, by following a basic blueprint, you will start with the right foot forward.

Before all else, prepare a business plan. Put your ideas, thoughts, research, and projections in writing. This will help you review your proposal as well as become an important document for outside investors.

The best idea can fall flat if you can’t sell your product or service. Conduct your market research before you hang out your shingle. Carefully identify your potential customers and calculate whether a viable market exists. Don’t be shy about seeking advice from more experienced players in the field.

Small businesses can readily get bogged down in government bureaucracy. It is wise to consult with experts who have dealt previously with the red tape.

Prepare a realistic cash flow projection. In the early stages of your business, check your financial statements daily. Consult with seasoned financial professionals to ensure that your projections are on the mark. You should be projecting the first two years in advance.

It may be difficult to raise the initial seed capital for your business. Most likely, friends and relatives will be the best address, as will former entrepreneurs who can appreciate where you are. The banks will likely wait until you are up and running.

Finally, we live in a world dominated by the internet. However, keep in mind that it is merely a technical tool. The success of your business depends on your personal effort and input.

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