Management

By Klayman & Company 16 Aug, 2017

Setting the price point for your product or service is not simply the process of determining the cost of production then adding a mark-up. It is more a matter of understanding the price the consumer will accept as the value of your product or service and keeping the costs of production to a level that will give you a profit at that price.

By Klayman & Company 16 Aug, 2017

The significant rise in the cost of equipment, vehicles, real estate, and inventory has prompted many businesses to increase business debt. Low interest rates, combined with the ability to obtain larger loans with extended payment terms, have allowed businesses to operate in a “business as usual” mode with less consideration for the actual cost of borrowing.

To give some idea of the effect of even low interest rates on an owner-managed business, the following key elements of most businesses have been put forward as an example of the effect of interest costs on a business. The effect of domestic borrowing has been added to show the full impact of current interest rates on the owner-manager. Since lending rates vary widely depending on a variety of factors such as risk, item to be funded and the term, and are usually negotiated, the interest rates used below have been chosen at random from Internet sources; calculations are approximate and for illustrative purposes only . All loans have been made effective June 1, 2017.

  • Commercial mortgage: $600,000 over 25 years at 3%
  • Two work vehicles: $120,000 financed over five years at 6%
  • Equipment loan: $200,000 financed over five years at 5%
  • Operating line of credit: $50,000 at 3% a year
  • Credit card debt: $10,000 at 15% a year on the outstanding balance

By Klayman & Company 16 Aug, 2017

Fred Tarasoff loves music. In fact, he used to own a record store, but had to go out of business in 1989 in large part because of inventory losses through shoplifting. Then he was assaulted by a shoplifter while he was running a health food store. Since that time, he has devoted himself to researching shoplifting and the retail industry in order to develop training programs to prevent and detect shoplifting. He currently works closely with law enforcement, industry associations and security firms to fight this crime. In the course of this work, Mr. Tarasoff has developed a simple way to calculate the losses suffered from shoplifting.

According to Mr. Tarasoff, even if your business has excellent controls, you can expect losses will approximate 1% of gross sales. Thus, if your retail store sells $600,000 a year, at least $6,000 will be missing from your sales figure. But, if your business does not have good controls, losses could be as high as 8% or $48,000 on $600,000 of gross sales. If your store works on a 20% gross margin your business is out $38,400 (i.e., 80% the sales loss of $48,000).

By Klayman & Company 16 Aug, 2017

Liberalisation of Canada's marijuana laws appears to be imminent. The Cannabis Act is currently expected to become law in 2018 and will decriminalize certain activities and make marijuana more widely available under a controlled production, distribution and sales system. Whether or not you agree with the intent of the proposed Cannabis Act , the loosening of the laws governing the sale and use of marijuana raises important questions for businesses regarding health, safety and legal liability.  

Most provincial and territorial occupational health and safety regulations require an employer to take all reasonable means to ensure the protection of their workers. The employer also has a reasonable expectation that employees should not be impaired on the job. The question then becomes when are employees impaired and whether, if they believe themselves to be impaired, they are required to inform their employer.

By Klayman & Company 21 Mar, 2017

No matter what the economic conditions, some business worries never go away. Here are a few tips on how to handle some of these eternal problems.

Cash Flow

Customers will continue to extend payments over 90 days.

Understand your cash flow. At the end of each week, review accounts receivable, and accounts payable and make sure you know what you must pay in withholding taxes. Do not use your source deductions to pay suppliers unless those deductions are actually in the bank. Send requests for funds to suppliers before the end of the month.

Owner-Manager Fatigue

Overworked and underpaid will continue to be the mantra.

Learn to pace yourself. Work to make money not save money. Work at what you do best and delegate the rest. Consider that if you work 2,000 hours per year and your business has sales of $400,000, you are effectively generating $200 of revenue per hour. Ask yourself why you are trying to learn how to do something a subcontractor can do in a day.

Maintaining Customer Base

Maintaining clients while working to get new ones is going to be a challenge.

In tough times, even long-time customers may ask you to cut your costs or they may cut back their orders. Review the profit on your best customers, not just their sales volume. Visit the customer and find out their expectations for the coming year. Consider limiting services to marginally profitable customers.

Employers

Finding and keeping good employees is never easy.

Older employees may retire and good employees may leave. New, inexperienced employees do not solve short-term problems.

Happy employees are loyal and productive. Be approachable. Let employees tell you what they need. Employees always appreciate a bigger pay cheque, but a good working environment and feeling valued will also go a long way to keeping employees.

Overhead

The cost of everything will continue to rise.

Capital asset costs, fuel, property taxes, light, heat, power, insurance, and maintenance will continue to rise and put pressure on your cash flow. The same cost pressures will also affect the standard of living of your own family and the families of your employees.

Evaluate all aspects of business costs and perks. Look at discounts, value added and other incentives provided to clients. Review perks to employees and determine whether there are more economical solutions that will retain the good will of the employees but not put more pressure on your cash flow.

Technology and Changing Demands

Keeping up with new developments will be a challenge .

Changes in technology, process, or client needs require training and financing to transition from the tried and true. Budget for the inevitable or you risk being outflanked by the competition.

Social media is changing the entire marketing process.

Marketing and Advertising

Connecting with customers will continue to be a challenge.

Maximizing your brand is difficult at the best of times; unfortunately, social media is making the entire marketing process even more problematic. Analyze your market and decide whether the best way to reach potential customers is: one-to-one contact, social media, online advertising, television, radio, newspapers, or magazines. You may find that more and more dollars have to be spent to create a cross-media presence that provides the same information without any guarantee of a return on investment.

Consider a short-term contract with a marketing specialist to review your company and its client base to help determine the best combination of media to reach your target market. Then, develop a plan to deploy your advertising budget to the appropriate media.

Maintaining Control

Managing all sectors of the business will continue to be a challenge.

Managing sales, manufacturing, ordering, marketing, human resources and administration as well as dealing with the considerable number of regulatory agencies will continue to become more complex. Trying to do everything yourself will undoubtedly lead to failure in one or more areas.

Control your business by managing rather than doing. Find the best person to run each particular part of the business. Define their responsibilities with a detailed and accurate job description and schedule regular reports. This will enable you to understand what is happening within the organization, solve problems and improve operations. Have faith in your subordinates.

Regulations

Red tape is and will continue to be the nemesis of small business.

Research suggests that these compliance issues consume eight weeks of employee time per year.

Because collecting and providing information to governments and regulators cannot be avoided, owner-managers should institute in-house procedures and write manuals. Reduce the use of employee time and associated costs by purchasing reporting software. If you do not have in-house expertise, arrange for a third party to prepare regular reports. Filing reports correctly and on time eliminates the cost and stress that follows from non-compliance.

Plan Ahead

The size and complexity of these and similar issues will move forward in lockstep with the business. Analyzing each potential conflict area and developing a process to stave off potential problems is an excellent offensive tactic that will lessen the cost and uncertainty of moving forward for the balance of 2017 and beyond.

By Ronald Klayman 13 Jan, 2017

Social media are reducing the number of face-to-face conversations. “In person” encounters allow a person to speak while another responds spontaneously without resorting to the more formal structure of the written word.

Why do we seem to prefer Facebook/Twitter or emails rather than meeting with someone to discuss issues? The most obvious answer is that electronic media is more effective and saves us time. Psychologists tell us we find interacting with others through the computer is easier because a computer does not require us to become emotionally involved.

When to Meet Face to Face

Certainly there are situations when communicating via social media is effective, such as when sending a quick inquiry to a colleague. But when owner-managers need to announce decisions that will have an emotional impact and bring employee reaction, face-to-face meetings are a must for the following reasons:

  • Face-to-face communication has incredible advantages since you receive an immediate response. If, on the other hand, you text someone and they do not respond, uncertainty prevails.
  • One-on-one proximity allows you to “read” the respondent’s reaction to the message. A shrug of the shoulders, a deep sigh, or an unexpected expletive are great indicators of the recipient’s acceptance or understanding of what has been said.
  • People need to be able to express how they feel about a project, a change in venue or a performance review. Face-to-face meetings allow each party to add a level of interpretation to the message by providing and reading body language, eye contact, or voice intonations. The meaning of words alone can often be misinterpreted. Receiving a text saying “The project is due next week.” sends a different message than someone who laughs and says “The project is due next week!” then rolls their eyes.

Talking face to face allows more effective negotiation.

  • Talking face to face allows each party to negotiate more effectively by immediately understanding the obstacles and opportunities that may not be easily understood by simply reading a progress report or a job description.
  • Communicating face to face provides each party a better opportunity to adjust their approach to ensure the end results are achieved. Interpreted another way, face-to-face interaction builds trust, creates understanding, and assists both parties to understand they share a mission for the project and the organization.
  • Face-to-face meetings force interactions, which in turn create new ideas and approaches that are essential to success. Yahoo’s CEO Marissa Mayer indicated in a memo:

Some of the best decisions and insights come from hallway and cafeteria discussions, meeting new people, and impromptu team meetings. Speed and quality are often sacrificed when we work from home. We need to be one Yahoo!, and that starts with physically being together.

Meeting through Skype is a means of communicating with remote jobsites. Surveys indicate employees like Skype because it allows them to “get more done” as they can handle one-on-one meetings without the

distractions of social graces. However, such methods still disconnect the workers from each other and the company and as such it is important for management to instill the need to maintain one-on-one personal contact.

Com muni cating face to face embraces the seven most important elements of interpersonal communication by:

  1. clarifying expectations and purpose
  2. creating brief, unambiguous communication
  3. focusing all parties on a purpose
  4. setting a consistency of tone that allows individuals to understand the underlying pattern and seriousness of the message
  5. addressing all issues without the need to wait for additional instructions
  6. ensuring that all points relevant to both sides of the discussion are brought to the table and discussed
  7.  allowing both parties to measure the knowledge and competence of the other party.

Get Back to Personal Contact

Even though Twitter has lifted the 140 character limit on messages, both owner-managers and employees must recognize that regardless of the length of the message, projects must be discussed face to face to generate the best results possible for the company, the employee and its customers.

By Ronald Klayman 13 Jan, 2017

Motivation, according to Business dictionary.com is the “Internal and external factors that stimulate desire and energy in people to be continuously interested and committed to a job, role or subject or to make an effort to achieve a goal. Motivation results from the interaction of both conscious and unconscious factors such as the:

  • intensity of desire or need
  • incentive or reward value of the goal
  • expectations of the individual and of his or her peers.”

Keeping yourself motivated and keeping staff motivated is difficult, especially for owner-managers constantly sidetracked by issues that pull them away from their course of action.

Know Yourself — Know Your Reasons to Be Motivated

One of the first steps to maintaining motivation is to determine the reason to pursue a project.

Determine whether your motivation is perhaps sparked by a deeply rooted need to emulate your parents, a desire to reach a million dollars in sales, or to meet the needs of others by providing a high-quality service or product.

Whatever your reasons, the following are some tips to maintain the drive to reach your goals.

  1. Treat your life as a project and yourself as the project manager. Break the project into long-term, medium-term and short-term projects. Over the long-term, you may want to sell your business for $20 million at age 60, but in the next five years (medium term) you want to reach $10 million in sales. In the short term (this year) you need to improve your operating margin to X%. As usual, Warren Buffett, chairman and CEO of Berkshire Hathaway and one of the world’s most successful investors, got it right: “I don’t look to jump over seven-foot bars — I look for one-foot bars that I can step over.”
  2. Establish the steps needed to reach the goal. Break each step into identifiable stages. Within each stage outline and document the task needed to complete that specific stage of operation. At the end of each day, review the outline and determine the progress. Such an approach allows you to determine the progress of that stage and to “tweak” the task to move forward quickly. Successful completion of the task will provide you with the motivation to move onto your next goal.
  3. Prepare yourself mentally for your day. When you awake, review what you plan to achieve that day. Outlining your goal motivates action and gets results.
  4. Maintain a list of tasks to be done. Thus, when a major task hits a delay and you start to feel overwhelmed, you can look to your list and work on a simpler task that can be more easily completed. Completing each task, even a small one, will provide confidence that other tasks can be successfully completed. Even small successes can sustain motivation and prevent demoralization.
  5. Pace yourself on all projects. Time frames that are too tight may lead to costly mistakes that will limit your ability to move forward. A measured pace ensures a better rate of success and the successes keep the flame of motivation lit.

    You cannot achieve everything by yourself.

  6. Remember: No matter how much you learn or how much you try, you cannot achieve everything by yourself. Understand both your mental and physical limitations and pick your projects and tasks accordingly. Struggling to reach unattainable goals demoralizes. Knowing your limitations frees you to engage others more knowledgeable and allows you to say “NO” to tasks above your competence level. Staying within your capabilities within your field of expertise allows you to concentrate on what you are good at, which in turn maintains your confidence level and allows you to keep motivated.
  7. Be positive. Never say “I can’t”. Much of success is attributable to simple endurance. When you have self-doubts, talk to your spouse, a peer or an outside professional. Simply articulating your concerns often provides insight and renews confidence in your own ability.
  8. Read how others overcame similar obstacles. Meet with others inside or outside your organization who inspire you to move forward. Positive reinforcement or constructive ideas for change are great motivators.
  9. Motivation comes not only from within but from the enthusiasm and desires of others who share your dreams and goals. When you decide to take on a project, ensure your team is fully vested from the start. The mutually reinforcing drive, ideas, and solutions of a team will keep not only you motivated but will also maintain team motivation until the project is completed.
  10. “Success” is a word every entrepreneur likes to hear, but “failure” is the word that often creeps into an owner-manager’s thoughts when projects go off the rails. Fear of failure and the accompanying financial loss is a strong motive to keep going. Failure motivates us to re-examine our process and make changes to move forward until we succeed.

Managing the Crests and Troughs

Motivation to succeed starts out as a tsunami when an idea is first born but tends to diminish to a ripple before it reaches the shore of success. Ensuring that enthusiasm is maintained throughout the life of a project or for your business means that as an entrepreneur, you must manage the crests and troughs of the wave to ensure that motivation keeps your staff moving forward toward a future that fulfills the needs of your employees, the needs of your business, and, of course, your own personal needs.

By Klayman & Company 28 Nov, 2016

No one, with the possible exception of a professional gambler, expects to build a reserve of funds by gambling. Nevertheless, purchasing or not purchasing life insurance is a gamble in itself. If you buy life insurance, you only win if you die early because the insurance pays off your debts; if you don’t purchase life insurance, you only win if you live a very long life and pay off your debts without having paid life insurance premiums. What you must decide is whether you want to gamble that you will live to pay off all your obligations, or take a more conservative position and accept that you might die younger and be willing to pay the insurance premiums to ensure that your debts will be paid off at your early death.

Factors to Consider

To understand why you would need to provide these funds, ask yourself: Will my spouse be able to pay for:

  1.  my funeral?
  2. our home (including any outstanding mortgage) and way of life for the children?
  3. outstanding credit card debt?
  4. funds borrowed from the RRSP to put a down payment on the house?
  5. the monthly mortgage/rental, utility and maintenance?
  6. day care?
  7. my personal income tax liability as an owner-manager if I have not repaid draws or have not deducted sufficient taxes at the source?
  8. short-term loans from the company?
  9. personal guarantees to financial institutions if there is no other source of income?
  10. our children’s future education or future medical costs should they currently have special needs or develop them in the unforeseeable future?
  11.  RRSPs, investments or TFSAs for the future needs of our family?
  12. the capital gains tax (if) the second residence (e.g., a cottage) has to be sold?
  13. an equalization of my estate? For example, the family cottage has been left to three survivors, but only one has a real interest in preserving it. What will happen to the cottage if that person does not have the financial means to pay out the two other survivors? Does that mean the property would have to be sold to meet the terms of the will? Should life insurance be purchased to provide a cash payout to the other two beneficiaries to prevent the sale of the property and therefore keep it in the family?

Entrepreneurs should not defer purchasing life insurance.

What about Now?

Term life insurance provides coverage at a fixed premium for a limited period of time (i.e., the term). After the term expires, coverage at the previous rate is no longer guaranteed. Term insurance is usually the lowest-cost way to purchase a substantial death benefit.

Putting off purchasing life insurance is not an option entrepreneurs should consider because (in the event of your passing):

  • your business associates will need cash flow to fill your vacancy
  • life insurance becomes more expensive as you get older: your province of residence, your life style, the amount of the payout and your gender will impact the insurance premium; for a non-smoking 25-year-old man, for example, the yearly premium for $600,000 of renewable five-year term life insurance may cost you $600* per year; however, as you age, the amount goes up: at age 46 (around $900) and age 55 (around $1,500); the problem with term life insurance is that, after the term expires, the policy has no value. *Please note that all amounts and calculations are generic estimates. Each individual’s circumstances will impact the premium.
  • even if you paid an annual premium of $1,500 (hypothetically) from age 25 to 55, the total cost of your premiums would be only $45,000, but the payout would be $600,000, which is an excellent return on your investment
  • conversely, if you invest $1,500 per year at 5% compounded annually for 30 years, you would have only about $100,000 at age 55
  • if you incur serious physical problems or develop a medical condition, you may not be able to purchase life insurance.

Key-Person Insurance

Key-person insurance is paid for by the company, with the company as beneficiary. This type of insurance is designed to cover the consequences of losing an indispensable person such as the founder or owner who can no longer contribute to the business through death or disability. Funds will be available to keep the operation going while restructuring is taking place after your death.

Key-person insurance can provide funds to buy your share from your survivors without the business assuming additional debt. A key person payout can be used to back your personal guarantees on business loans as well as pay deferred taxes and other regulatory deductions.

How Much Should You Buy?

How much insurance you need depends upon what you need to insure: self-employed earnings, current assets, debt, savings, cost of living, business and family structure, as well as the future needs of family and the business. To determine this amount, first put together a summary of the collective assets and debts of your business and your family unit along with details of the cost of your current life style and future expectations. Contact an insurance agent, discuss your situation and design a policy that will meet your needs.

Something to Think about

Don’t gamble with your future. Accidents and illness happen. Hope for the best but plan for the worst. Think about your business and family situation and what would happen if you were not there. Do not leave your survivors in jeopardy when you can take care of their futures today.

By Klayman & Company 29 Jul, 2016

Strategic planning is not usually a strong suit of most entrepreneurs. They have a great initial idea and know how to turn it into a business. But then, they become too involved in day-to-day affairs and do not take the time to plan where they have to be in five, 10, or even 20 years to stay competitive. No one should start a business without a vision of what their company should be at some point in the future. Unfortunately for many businesses, the intermediate stages do not get planned, goals get forgotten in the details of everyday life, and suddenly the calendar reads 2036 instead of 2016.

There is no magic formula that will provide specific steps to achieve personal and business goals; each individual and each business has different needs and abilities that must be factored into the desired results. The starting point, however, is the same for everyone since there is a symbiotic relationship between a business and its owner.

Taking the First Step

First, determine your personal objectives and needs: current income requirements, retirement savings plans, the future for your spouse and children inside or outside the business, and the amount of personal vacation time you want. If personal goals are set too high, disappointment will stifle forward momentum; conversely, if goals are set too low, underachievement may stall growth.

Specific achievable targets are essential. Common quantifiable goals include sales volume, gross margin, profit before income taxes or debt repayment. Other goals that are quantifiable but may be somewhat subjective include attaining specific market share
or increasing a client base.

Because most businesses are cyclical, it is essential to establish three-to-five-year goals that take into account how progress is going to be made in smaller periods, such as each quarter. Frequent reviews will monitor progress and allow any redefinition of the goals to meet the changing reality.

Make a CPA part of your team.

You Are Not Alone

You will not be able to achieve your business goals without considering your own abilities and shortcomings, future staffing needs, and any assistance from outside consultants to supplement missing skills. You will need inputs from all current staff members to determine whether existing equipment, hardware, software, physical location, transportation, financial services and communications can handle the future projections.

Objectivity is essential to good planning. A Chartered Professional Accountant (CPA) who understands your personal needs, your business, and the financial information required to produce meaningful projections should be part of your team. Not only will your CPA help map the future, but also will be able to support any application for external financing.

Who Are We?

Businesses often try to be everything to everyone. Thus, clients and customers become unsure of the ability of the business to support all the products they sell. As part of the planning process, it is essential to ask yourself:

1.    What business are we in?

2.    What business do we want to be in five years from now?

3.    What do we do best?

4.    Who are our main customers and what do we provide to them?

5.    What services or products provide the most return on investment of staff and production facilities?

Analysis of these five areas should show you where to concentrate your production and marketing energies. Such analysis will help define achievable goals and guide your planning for the next three to five years.

Projecting Costs

Once the goals have been determined, it is necessary to project costs and the need for funds. Such information includes:

1.    Production costs, either by unit or as a percentage of sales, include labour, material, transportation and amortization of equipment.

2.    Selling costs as a percentage of sales include marketing, advertising, entertainment and travel expenses.

3.    Administration costs generally include all costs not directly tied to production.

A good starting point for making three-to-five-year projections is a line-by-line review of financial results for the last three to five years. This will provide insight into annual sales, expenses, profit and taxes and show yearly changes in sales and costs as well as the ratio of costs to sales revenue. Management can use these ratios to predict the proportional contributory costs of many expense areas to the realization of projected sales. For example, if over the last five years advertising represented about 2% of sales, you could use this figure to estimate the cost of advertising needed to produce your sales projections.

Personal Time Matters

Success in business depends upon maintaining a balance between time spent in business and time spent satisfying personal needs. Therefore, when establishing goals, consider how your personal needs will impact your business and its long-term strategy.

Anticipating Change

You also need to consider the impact of changes such as a divorce or the loss of a key business associate or important customer. You must have a fallback plan and sufficient resources to navigate through the hard times.

Review both the short-term and long-term plans on a regular basis and adjust the expected outcomes to the new information. It is doubly important to review and update plans in the event of dramatic life changes or opportunities.

Let the Business Work for You

Time and resources are limited. Proper planning is the best method of ensuring the business is working for you rather than you working for the business.

 

By Ronald Klayman 26 May, 2016

The fires in Alberta show how quickly natural catastrophes can totally disrupt personal and business life. Technology is now available to protect you from losing important information when disaster strikes.

On a Personal Level

Financial institutions need tangible evidence of your existence. Even if the originals of documents are destroyed, you can reassert your identity with photographs. Take pictures of the front and back of all credit cards, debit cards, health cards, social insurance cards, driver’s licences, vehicle insurance cards, etc. Keep all original birth certificates, passports, change-of-name documents, adoption papers, copies of power of attorney, living wills or other caregiver instructions as well as appraisals of jewellery, artwork, collectible or other valuable insured items in a fireproof safe or safety deposit box.

Scan and add to the safe all documents that record RRSPs, RRIFs, investment and your Notices of Reassessment for the last six years to establish your income tax history.

Take pictures of all household furnishings. Not only will these be beneficial for insurance purposes, but they will also provide you with images to use when rebuilding your new home.

Use the highest resolution on your camera or smartphone so all names and numbers can be read when enlarged.

Take pictures of assets and serial numbers.

On a Business Level

Take pictures of all movable assets along with their serial numbers. Re-establishing ownership is easier if you can prove the asset belonged to your business. Scan or take pictures of both sides of all credit and debit cards.

Scan at least one Goods and Services report or Corporate Notice of Assessment to provide the business number.

Scan all important business documents:

  • loan agreements
  • insurance policies
  • lease agreements
  • articles of incorporation and resolutions that establish shareholders, directors and officers of the corporation
  • bank account numbers, credit card numbers, etc., together with passwords
  • invoices for capital asset purchases

Corporate History

If your business is destroyed the history of your success may disappear . Your accountant and lawyer may have copies of financial statements, tax returns and contracts, but what if their business suffers the same calamity as yours? Ensure your future is supported by the success of your past. Scan all financial statements and tax returns and back them up to USB drives, external hard drives or your cloud storage. If you cannot find your past data your accountant or lawyer should be able to PDF it to your computer for transfer to your remote storage facility.

Maximize Loss Recovery

Purchase an encrypted USB drive and an encrypted external hard drive and copy all data onto them. Store the USB in your safe and keep the hard drive at some other secure location such as a fireproof safety deposit box at your bank.

Perhaps the safest storage site of all is on the cloud. There are hundreds of cloud storage services available and thus the only question is how much storage do you need and how much will it cost. Companies such as Google, I Drive, and Microsoft offer a range from five GB to 15 GB for free and expanded storage services for a fee. Dropbox Pro offers a Terabyte of storage for about $10 per month.

Use one of the many web-offered password managers to store your passwords. For about $20 a year, they are a good long-term strategy. Make sure you store the password to log on to the password manager itself in a safe place.

Physical Security of Data

Important articles stored in the basement are more likely to survive because the basement does not usually get as hot as the burning structure above. If you are going to use a fireproof safe, ensure the ratings are at least in the 1750 F (955C) ranges. The best place to store the safe is in a corner. However, any extreme heat over an extended time will eventually erode even the most fireproof safe.

Precautions Reduce Anxiety

Recording personal and business data will not eliminate the heartbreak and stress that accompany such unfathomable tragedies. The use of multiple means to back up important personal and business data, however, will go a long way to reducing the anxiety and frustration that will accompany the long process of rebuilding your personal and business lives.

 

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By Klayman & Company 16 Aug, 2017

Because lighting, heating and cooling represent 19%-25% of the cost of operating a commercial business, control of energy costs is essential to improving profit margins. A reduction of even 10% in these costs can produce a significant improvement. But, because Canada is located in a part of the world where temperatures can range from 40C below zero to 35C above, it is inevitably expensive to keep internal temperatures at levels needed to maintain comfortable working conditions through the changing seasons.

By Klayman & Company 16 Aug, 2017

Setting the price point for your product or service is not simply the process of determining the cost of production then adding a mark-up. It is more a matter of understanding the price the consumer will accept as the value of your product or service and keeping the costs of production to a level that will give you a profit at that price.

By Klayman & Company 16 Aug, 2017

The significant rise in the cost of equipment, vehicles, real estate, and inventory has prompted many businesses to increase business debt. Low interest rates, combined with the ability to obtain larger loans with extended payment terms, have allowed businesses to operate in a “business as usual” mode with less consideration for the actual cost of borrowing.

To give some idea of the effect of even low interest rates on an owner-managed business, the following key elements of most businesses have been put forward as an example of the effect of interest costs on a business. The effect of domestic borrowing has been added to show the full impact of current interest rates on the owner-manager. Since lending rates vary widely depending on a variety of factors such as risk, item to be funded and the term, and are usually negotiated, the interest rates used below have been chosen at random from Internet sources; calculations are approximate and for illustrative purposes only . All loans have been made effective June 1, 2017.

  • Commercial mortgage: $600,000 over 25 years at 3%
  • Two work vehicles: $120,000 financed over five years at 6%
  • Equipment loan: $200,000 financed over five years at 5%
  • Operating line of credit: $50,000 at 3% a year
  • Credit card debt: $10,000 at 15% a year on the outstanding balance

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