Business Management

Should I start a business?

There are many issues to examine before starting your own business.

Here are some considerations:

What is your level of determination? If challenged do you persevere or walk away. If you prefer to walk away self-employment may not be a good option.

Can you build and sustain a business? Do you have a strong network of connections from which to build?

How strong are your financial reserves? Can you survive the initial years of start-up until cash flow is stable?

Are you objective? Can you assess your own business performance and recognize your own weaknesses and how to overcome these challenges.

Do you have the basic skill set? Can you start, grow and manage all aspects including sales, finance, and day-to day operations or can you afford to hire support needed.

These questions should be carefully reviewed and honest answers challenged before stepping into the deep end of a commercial venture.

Business Management

The Keys to Leadership in your Business

 

Are you a leader just because you run a small business? No. But you need to be. Without business leadership, your small business ship will circle aimlessly and eventually run out of power.

Effective business leadership demands a captain of the ship, not just someone who's standing by the helm. Leadership is active, not passive.

Here are some keys to effective business leadership:

1.     A Leader Plans

The core of business leadership is being proactive rather than reactive. Sure, leaders are good in crises. Leadership involves identifying potential problems and solving them before they reach crisis proportions – and the ability to identify and reap potential windfalls. So good leaders analyze and plan and adapt their plans to new circumstances and opportunities.

2.     Leaders have Vision

Vision is essential to good leadership. Vision provides direction and without direction, your small business will still flail about. So if you don’t have one already, take your first step towards business leadership by creating a Vision Statement for your business. Because it embodies your dreams and your passions, a vision statement will also serve as a leadership vision.

3.     Leaders Share their Vision

Sharing your leadership vision helps your vision grow and your business leadership develop. As you tell your leadership vision to others, you will strengthen your own belief in your vision and strengthen your determination to make your leadership vision become reality. Your business leadership skills will grow as you and other people recognize you as a person with leadership potential.

4.     Leaders Take Charge

As a leader you put together your planning and your leadership vision and take action. Whether it's implementing a specific plan to improve your business's bottom line or responding to a crisis, the leader is the one who makes the decisions and sees that the appropriate actions are carried out. You can't just "talk a good game" to be a leader; you need to act and take effective action for the good of your small business. 

5.     Leaders Inspire Through Example

Leadership is defined through action. Therefore, in developing your own business leadership skills, you have to act in ways that are fitting to your leadership vision and your self - all the time. We can all name many actions of other people whom we admire, but what inspires us is the integrity that gives these actions meaning.

The Value of Business Leadership

Learning to be a leader isn't easy because it takes a conscious commitment and consistent effort to develop one's business leadership skills. Anyone who is willing to make the effort can become a good leader. And as good business leadership is critical to business success, your efforts to improve your leadership skills will be amply rewarded.

Business Management

Are you Hiring Practices Right?

Hiring the right people is crucial for the success of your business. Entrepreneurs should have a formal hiring process in place when looking for new staff. The time spent will improve your chances of hiring the best performers and avoiding costly and painful mistakes.

Be objective and make decisions on defined criteria rather than relying on gut feel.

Some factors to consider:

1.     Define Needs: Create detailed job descriptions that reflect responsibilities, skill sets and level of experience needed.

2.     Structure Compensation: Make sure offers are consistent with the structure in the business. Ad Hoc offers that don’t fit compensation of other employees will lead to dissatisfaction and poor morale. Be competitive but be fair to other employees also.

3.     Organize Interviews: use a structured system to measure and compare candidates. Include a team of managers to conduct secondary interviews and provide a broader perspective on key candidates.

4.     Focus on Talent: Hire the most talented candidate to maximize the potential to create a strong team and improve chances for growing your business.

Once the selection process is completed ensure the new employee is given the tools, training and orientation to ensure he/she succeeds. Proper coaching/mentoring goes a long way to ensuring the new employee develops into a productive team member and establishes a solid career with the business. Reducing turnover also improves profits.

Business Management

Guest Blog:

This article was prepared by Bill Mac Arthur, President of M-Teams. Bill provides a valuable service in the area to business seeking government funding. Please call Bill at 519-419-0070 for additional information on government support options.

Trial & Error and Other Things You Don’t Say

Politics and religion are two topics that one is not supposed to raise in conversation.  Similarly, there are things that one doesn't say to government representatives. Today's focus will be on what not to say to the Canada Revenue Agency.

Several years ago a firm which had prepared its SR&ED claim unassisted contacted me. The Canada Revenue Agency was coming in for a review and the initial indications were that it would not go well.  The firm asked me to look at their reports and anticipate what the issues were. It didn’t take very long. The firm had used the term “trial & error” in about 50% of the reports. Trial & error is specifically listed as being ineligible. However, for many people the difference between “trial & error” and “systematic investigation” is in semantics. Most firms who develop products or processes use a systematic approach or they wouldn’t be in business.

Surprisingly, university researchers can get their clients in hot water by using the term “optimize” or some variant. Optimization seems to be hard wired into the genes of the university engineering community. In their view it’s part and parcel of performing research & development. In CRA’s view optimization indicates that the technical challenges have been overcome and fine tuning is taking place.

 

“Complexity” is another term to avoid. Again CRA’s publications warn against it. Some designs or processes can be complex without having any uncertainties. E.g. complex electric circuit diagrams often require extensive analysis to solve but the calculations are deterministic.  

“Capability studies” are often needed to verify production processes. Reducing the amount of variation can require a technological advancement and be fraught with uncertainties. However, the term itself implies quality control which is ineligible. Conversely, almost all research projects use some form of statistical analysis to determine whether or not results have been achieved. E.g. the Salk Polio vaccine trial is a standard statistics textbook case.

In conclusion, there are a number of terms to avoid in preparing SR&ED claims as well as other government applications. Using them can result in additional scrutiny or outright rejection. In the case of my “trial & error” friends, they were doing systematic development and used the wrong term. My recommendation to them was to explain that to CRA using the “I’m just a simple Caveman” approach and explain their development process (“but I do know R&D”). After review, the claim was approved as filed.