Money is Evil?

What stories were you told about money when you were growing up?  What stories about money do you tell yourself and your kids now?

Go ahead, list them…I’ve heard (and told) so many:

  • Money doesn’t grow on trees.
  • Money is evil (or the root of all evil).
  • Rich people are snobs, bitches, a-holes…they don’t care about anyone but themselves.
  • Money is hard to come by…you have to work hard for money.
  • If you don’t work hard, you don’t deserve money.
  • There’s not enough money…you can’t afford to ________.
  • Rich people are spoiled.
  • So and so was born with a silver spoon in his mouth.
  • People with money are crooks/crooked – they never made an honest day’s wage.
  • You’re not smart enough to make a lot of money.
  • You can’t take it with you, so you might as well spend it and enjoy life now.
  • You have no idea where the money goes – it just seems to disappear.
  • Money is elusive…just when you’re starting to build some savings, something happens (illness, car repairs, home repairs, etc.) to drain your bank accounts.
  • You’ll never get out of debt.
  • You’ll never have enough money to do the things you want to.

(And so on)

Do you cringe or stress every time you look at a bill or your bank accounts, and start complaining about said bill or bank account?

Now, if you were Money, and I kept telling all these stories about you, would you ever want to hang out with me or help me?  Likely not.

Here’s the thing – The energy you put out there is the energy you get back.  So if you’re always complaining about Money, how hard it is to get money, how bad it is, well, guess what – you’re not making a good invitation for Money to come and stay with you.

Start paying attention to the energy and words you put around money.  Go ahead, write down all your money stories (how you feel about it, what you think about it).  Acknowledge how you’ve been treating money.  Then apologize, and start showing it some love instead…start inviting it into your reality and show it some appreciation.  Here are some things you COULD do instead of complaining about Money:

  • Be grateful for every dollar coming in AND going out (yes, be grateful for your bills too, and what they represent).
  • Dream about Money and all the positive ways it can contribute to you.
  • Imagine what Money looks like, feels like, and how it feels to have Money.
  • Start asking questions about how you can have more money, or how you can do xxx with more money.

 

The truth is, Money makes life easier, allowing you to do more and experience more of what brings you and your family joy.  Just think – the more money you have, them more good you can do in this world.

I invite you to shift your money stories – from contracting and negative to expansive and empowering.  What would your life BE like with Money as your partner?

Visit www.visionspire.ca/events for upcoming workshops and programs that will transform your money stories and help you create a healthy relationship with Money and finance.

 

How Farming Prepared Me for Entrepreneurship

I spent the first 19 years of my life on a beef farm with my loving parents and 3 younger siblings in the Eastern Townships (QC).  It was a lot of hard work (and hardship) and simply our way of life.  Never once did I think of it as a business, with plans and strategies, and committed action to get desired results…until after I myself became an entrepreneur.  Even though I had years of education and training in accounting and finance, I realize now that growing up on a farm was likely some of the best training I could have for running my own business.  Here’s why:

1 – Farming takes dedication, resiliency and hard work, and a love for that way of life…it’s not for the faint of heart.  I feel the same for entrepreneurship.

2 – Farming requires a lot of planning and strategic action to achieve desired results in the timelines afforded by the changing seasons.  Running a successful business requires knowing your markets, having clear plans and taking strategic action to get the results you know are possible.

3 – You can’t run a farm successfully on your own – as in business, you need a good team.

4 – As a farmer, you need to build great relationships with your suppliers, your customers and your team members that fully support you in achieving your success.  This same is true in business.

5 – My family really loves what they do and puts so much love into caring for the land and each of the animals on their farm.  This love and compassion was instilled in me, and as an entrepreneur, I really care for my clients.  I love serving them and seeing the joy on their faces as a result of their transformations and the results they’ve realized from working with me. 

6 – Farming is a 24/7 job (at least the kind of farming we did)…you could be up before the sun and not get to bed until the wee hours of the morning (especially if it’s birthing season or maple season).  As an entrepreneur, I eat, breathe and sleep my business.  It’s an integral part of me, and often has me up into the wee hours of the night (especially when I’m in creative mode).

7 –  As a farmer, you need to be prepared for life’s curve balls (uncooperative weather, sick animals, illness, injury, economic set-backs, influences beyond your control) – having back up plans, risk management systems, and a good support system are essential to handling those curve balls with ease and grace.  These are also essential for success in business.

8 – Growing up, we had to make do with what we had.  That meant being really resourceful, thinking outside the box and finding solutions that required little to no money.  If it meant rolling up our sleeves, getting our hands dirty (and worn), and creating something out of nothing, we did it.  I’m finding this has become a great skill in the beginning stages of my business.

9 – My dad never seemed to stress if things didn’t go so well on the farm.  Sometimes SH*t happens – it is what it is…no point stressing over it…just assess the situation, learn from it, find a better solution and move on.  I’ve had many challenges in starting and growing my business.  Thankfully, I adopted my dad’s outlook on dealing with those challenges…otherwise I likely would have given up and gone back to a full-time job long ago.

10 – In farming, you really need good tracking systems and processes – whether it’s for your cash flow or your animal inventory (I saw my dad, and now my brother, tracking the cows and money almost daily – perhaps this is where I adopted my love and propensity for numbers, and why I became an accountant).  As an entrepreneur, you really have to know your numbers (sales, marketing analytics, financials, etc.) and what they’re telling you so you can make the right decisions for you and your business.

So there you have it – 10 ways that farming prepared me for running my own business…and I never really acknowledged or appreciated them until just recently.

So what about you?  What skills did you acquire from your childhood that maybe you haven’t acknowledged or appreciated until now? I would love to hear about them…leave your comments below.

If you would like to chat about how I can help you with growing your business, CLICK HERE to book a complimentary clarity call.

What is Financial Wellness?

It’s no secret that money is the #1 factor causing stress – affecting our mental and physical wellness. It’s also no secret that it takes awareness, know-how and empowering money mindsets, along with INSPIRED action to create the stressless financial reality that you desire.

Financial wellness (and “freedom”) is a mental, emotional, and educational process that provides for an intricate balance of the mental, spiritual and physical aspects of money.  It involves having an understanding of your financial situation and taking care of it in such a way that you are prepared for financial changes…and knowing where your money comes from and where it is going.  One of the first questions I ask my clients is whether they track their money…most of them say no.  In fact less than 40% of North Americans have a good understanding of their finances, and even less (20%) actually have a plan for their financial future.  Without the awareness and planning for your desired financial reality, it’s easy to become controlled by circumstance, fall “victim” to the “poor economy”, to peer pressure, to rising consumer debt – a deterioration of financial wellness.

What does financial wellness (and “freedom”) look like to you? And what actions are you taking daily to adopt those empowering mindsets and take that INSPIRED action to have your financial freedom?

Feel free to leave comments below, or send me an email – would love to hear your views.

PS – If I could give you a simple solution that would promote and empower your financial well-being (in as quick as just a few minutes), would you say yes? Click [YES] to find out how.

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Getting Comfortable with Money

The more comfortable you get with Money, the more you empower yourself.

I hear many people say they don’t pay attention to their finances because it stresses them out (likely a huge factor behind today’s low financial literacy rates).  One of the reasons for this stress is that they don’t know what to look at or what to do.

Let me tell you a story to shift this perspective.

I have a client who, 9 months ago, had this same perception of money – it was stressful.  She never looked at her numbers, and as long as her debit card worked, she felt everything was ok.  Her husband took care of all the finances (and the stress of dealing with it).  He balanced her books for her and took care of their personal money matters for which she had no awareness or interest.

Then she heard me speak about having a relationship with Money (instead of treating it like just a thing, or a “necessary evil”), which completely shifted her perception and way of being with Money.  She started paying attention to it, understanding it, and looking for ways to bring more money in.

This client recently told me that she now looks at her numbers daily, has gone to her bank about reducing fees and asking about investments (something she had zero knowledge of 9 months ago), and is becoming her own money “guru”.

This new “relationship” with money has empowered her beyond her imagination (and beyond her husband’s imagination) – giving her more confidence in her business and in her relationships, and resulting in greater ease for her business and her family.

Money is the #1 factor causing stress in North America, but it doesn’t have to be.  When you shift your perceptions, and pay attention to your finances, ask questions and learn more about them, you WILL become empowered to take INSPIRED action to build your net worth.

What actions will you take today to empower yourself with money and finance?

 

[author] [author_image timthumb=’on’]http://54.82.103.175/wp-content/uploads/2017/06/Linda-Spencer-Visionspire-cropped.jpg[/author_image] [author_info]Linda Spencer brings 20 years of professional accounting and tax knowledge to her more recent accreditation as a Certified Money, Marketing & Soul Coach. Through her money mindset and profitability workshops, group training programs, guest speaking and 1-1 coaching, she helps heart centered business owners transform their relationship with money & finance (reducing their money stress), so they can do more of what they love with greater ease and joy. If you would like to be more empowered to create the business (and life) you imagine, with Money as your PARTNER, Linda can help. Contact her for a no-obligation 30 minute complimentary Clarity Call to learn what your next steps should be. [/author_info] [/author]

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Know Your Numbers

In my 20 year career as a professional accountant and now business coach, I have worked and talked with hundreds of entrepreneurs.  I’ve seen many grow their business exponentially, and I’ve seen some fail.  Many entrepreneurs have told me they’re struggling to make ends meet.  When I ask them if they know how much money they’ve made and spent in the last 6 months, or if they have a plan, almost all of them say no…they don’t track their numbers (many handing over all their receipts for the year to their accountant at tax time), or if they do have their bookkeeping done, they don’t look at the numbers.  Many tell me that they don’t look at their numbers because they don’t know anything about finance, dealing with finance/money stresses them out, and/or they don’t have time.  This certainly backs up the statistic that over 85% of business failures can be attributed to a lack of financial planning and organization.

If you want to have financial wellness and abundance, one of the essential keys is to know your numbers and what to do with them so you can take the appropriate action in line with your business (and life) objectives.

If you don’t track and review your numbers, how would you know how you’re doing?  How would you know if the products you’re trying to sell are making you money?  How would you know if your marketing and sales efforts are paying off in profitable returns?

What numbers could you be tracking?  Literally, hundreds.  But here are some key financial numbers that every business owner should know and understand:

  • Cash in, cash out, net cash flow – What do you bring in, spend, and how much is left each month?
  • Collection rates – How long does it take you to get paid? Do you have policies and processes in place to ensure you’re getting paid on time (or faster)?  Statistics show that any money owed to you that is more than 90 days old likely won’t be collected.
  • Cash burn rate – How fast do you burn through your cash on hand? Typically, you want this to be 3 to 6 months.  It’s a fast track to failure if you don’t have cash to meet your next payroll.
  • Revenues – Are your sales increasing? Decreasing? Are you hitting your targets?
  • Product and Client profitability – How much money is each of your products/services and clients making you…you want to focus on the profitable ones, and let go of the ones that don’t make you money.
  • Gross margin and profit margin – Compare your margins to plan and industry averages – how are you doing? Do you know how much sales you have to make for every dollar you spend in order to have the profits you’d like to have?
  • Capital spending and Return on Assets (ROA) – What are you investing in your business (and do you have a plan for this)? Are the assets you’re buying making you money?
  • Cost of client acquisition – What is it costing you to bring on a new client [=total marketing costs/# new clients]?
  • Return on investment (ROI) – Are your investments making you money, and how much? You can look at this not only from actual investments in stocks/funds/etc., but from every expense line and every effort you make. For example, you may want to know the ROI on your investment in your learning, investment in marketing and advertising efforts, or investment in people.

Whether your focus is on marketing, sales, productivity or profits, you need to track the appropriate numbers and review them on a regular basis to make sure you’re on track with your plans.  By looking at your numbers, and understanding their story, you can then identify the money/productivity leaks and opportunities on which you can take action to grow your business and your profits.

Every person has the opportunity to have financial wellness and abundance.  The difference between the 30% of the population who thrives financially, and the 30% of the population that struggles to survive, is that those who thrive have a plan, track and review their numbers, and take inspired action to grow their net worth.

Your numbers tell a story.  They tell you where you’re making money, where you’re losing money, and whether your efforts are paying off.  Do you know what story your numbers are telling you?

If you would like to empower your financial wellness and abundance, and get to know you numbers better, I can help.  Drop me a line and let’s talk.

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[author] [author_image timthumb=’on’][/author_image] [author_info]Linda Spencer, CPA, CA Certified Money, Marketing & Soul Coach [/author_info] [/author]

Do you catch yourself saying “I can’t afford it”?

My sister inspired this post, when she shared that her kids were disappointed that she couldn’t afford to send them to camp.  I suggested that she start asking questions about HOW she could afford it.  Then all sorts of suggestions came up for her:  see if the camp had sponsorships; look for lower cost alternatives; ask friends and family to assist.  Within minutes, two of her friends even posted that they’d pitch in to sponsor the kids to go to camp.

And I get it…I too used to say it all the time to my kids – We can’t afford that right now.  I used to say it to myself.  What actualized is that I never had the money.

But since becoming a money mindset coach, I’ve shifted my thinking and what I say.  Now when money is tight, and there’s not enough to pay for something I’d like or the kids would like right away,

I first ask – Is this something that is necessary right now or that will make our lives a lot easier, or that will bring us joy.  Then if it’s something that is truly desired, I ask myself “How can I afford it?  What would I have to do, what could I sell, what do I have to re-prioritize to have that right away?  What else is possible to have this for less than I could imagine?”

The energy you put out is the energy you get back.  When you say you can’t afford something, you’re telling the Universe to keep it outside your reach.  When you start asking HOW to afford it, you send a message to the Universe that you’re looking for solutions, and that you really would like to have that.  Then magic happens – things shift, opportunities present, and money starts coming in.  But your actions have to be congruent with what you’re asking for.  Be crystal clear about your ask, your priorities, your words and your actions, start putting money in a special “having” fund and watch how quickly you can afford those things you used to think you could not.

Do you find yourself saying you can’t afford it?  Are you ready to change that type of lack thinking?  Click the buttom below to find out how.

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__________________

[author] [author_image timthumb=’on’]http://54.82.103.175/wp-content/uploads/2017/06/Linda-Spencer-Visionspire-cropped.jpg[/author_image] [author_info]Linda Spencer is a Chartered Accountant with a twist. She marries over 20 years of left-brained practical accounting, tax & business process improvement strategies with her right-brained creativity as a lifetime artist and recently developed intuitive coaching skills to help heart centered coaches, consultants, creatives and holistic practitioners to transform their money & finance relationship to do their business with purpose ON purpose with greater ease and joy. Linda promotes financial literacy and well-being, by empowering heart-centered individuals and business owners with the tools, knowledge, strategies and mindsets to transform their relationship with money & finance and to build their business roadmap for success, through her money mindset and profitability workshops, group training programs, guest speaking and 1-1 coaching. www.visionspire.ca/about[/author_info] [/author]

Empower Your Financial Wellness

It’s a fact – money is THE #1 cause of stress in North America today.  That stress places strains on our bodies, our relationship and our emotional and mental wellbeing.  Stress costs billions of dollars in health care and lost productivity each year.  There are programs, pills, tips and tricks to manage the symptoms of stress, but what is there really that gets the heart of the cause of that stress – in this case, MONEY?

Why is it that Money is such a stress factor?  With statistics like over 60% of the population not having good basic financial knowledge and 85% of business failures being caused by lack of financial know-how and organization, I think poor financial literacy, along with instilled beliefs that money is limited or not available to us, has created this high money stress that we experience today.

As parents, consumers and business owners, it’s our responsibility to educate ourselves with the tools, knowledge, strategies and MINDSETS to take control over our financial destiny.  As educators and parents, it is our responsibility to give our youth the knowledge, tools and mindsets they need to not only support themselves, but to thrive in a world that is still governed mostly by a lack mentality (which we CAN change).  And I see it as my job to pass on the financial knowledge and know-how I’ve acquired in order to reduce this money stress, and empower people to create the life they truly desire, to have greater ease and joy in their lives.

Here are 3 of my top tips for reducing money stress:

1 – Know your numbers!  Know where your money is and where it’s going.  Look at returns on your investments.  Look at your spending and debt.  Only then can you identify opportunities to grow your income and returns and reduce spending.  One of my clients used to be oblivious to her finances.  After doing a short program with me just a few months ago, she recently told me that now she looks at her numbers daily and it’s like a game or competition to her to see how much more she can make…Numbers are EMPOWERING!

2 – Get educated!  If you don’t look at your numbers because you don’t know how to track them, or how to read them, do some homework, find a financial advisor or bookkeeper or accountant who will help you really understand.  Take a course in personal or business finance.  Read finance books.  Go to free (or paid) seminars and workshops.  Get mentoring/training from someone you know who can help you.  The most financially successful people are the ones who really know their numbers and the stories they tell, and take action to increase their financial wellness.

3 – Shift your money mindsets!  If you’re always saying that you can’t afford it, you’ll never have enough, and money is hard to come by, then that’s exactly what you’ll continue to get.  Money, like everything, is energy.  When you change your beliefs and perceptions about money, how you can receive it, and how much you can receive, and take action on opportunities when they are in front  of you, you’ll see a shift in your money flows, and the amount of stress you have over money. When you change your money stories, you change your life!

 

If you would like to know more about changing your money stories and reducing your money stress, please visit our upcoming workshops and programs on our Events page.    I also invite you to join the CFO Mentoring group on Facebook, where I offer ongoing money mindset inspiration, tips and strategies for growing your cashflow and reducing your money and tax stress.

What are Money Archetypes?

We tend to operate from a adopted set of stories, beliefs, fears and motivations taken on from outside influences and other lifetimes  (but not to say that you can’t change them, because you can!).

Your Sacred Money Archetypes® are symbolic metaphors that help you understand your patterns and behaviors with money and financial decisions. These give you direction and guide your choices…they show you who you are so that you can become aware of, and change your unconscious money behaviors.  I like to think of your Money Archetypes as tools that you can draw on to get you unstuck and keep you moving forward in your path to financial freedom.  They are a powerful insight tool, helping you discover where you have the opportunity to grow and create a rich and meaningful life.

Being a primarily a Nurturer archetype, I would tend to give way more than I received.  Understanding my Money Archetypes has allowed me to become more aware and conscious of my money habits and decisions, and set empowering money boundaries so that I’m no longer going into debt to help others (it has also made certain relationships even stronger).  In so doing, I’m empowering others to stand up for themselves more (give a man a fishing rod and teach him to fish…I used to give the man a fish ;)).
In a Money Archetype Insights session, I walk you through a process to identify your top 3 Sacred Money Archetypes® and how you can use these to become more aware of your financial decisions and align your actions to achieve your financial destiny.  Thousands of people around the world have made positive changes in their money flows just with understanding their money archetypes (and this is just the first steps of many in my money mindset makeover system).   Once we’ve discovered your Money Archetypes, we then look at your goals and priorities and determine the actions you can take to align your priorities to your financial destiny through the Money Archetype Insights tool (you choose whether you want to focus on business or personal priorities).

 

If you would like to book a Money Archetype Insights session, click the link below to purchase your session.  You will then receive a message with a link to my booking calendar.  

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Are You Ready For a Tax Audit?

Are you at risk? The Canada Revenue Agency (CRA) continues to audit the following key areas, as these areas seem to be the ones of greatest error or non-compliance by small and medium sized businesses:

Denied expenses – CRA denies unsupported and non-deductible expenses. It is important to have proper and adequate documentation to support the expenditures.
Taxable benefits – CRA scrutinizes automobile benefits and other expenses such as travel expenses and phone and internet usage to ensure taxable benefits are attributed properly to employees.
Shareholder benefits – CRA continues to seek out personal expenses paid for and deducted by the business that should be denied or taxed to the shareholder. Taxpayers should carefully document the business purpose of all expenses and have practices in place to closely monitor shareholder accounts and credit cards to avoid these reassessments.
International compliance / cross-border transactions – Many business are unaware of the tax and reporting implications of conducting business outside of their country and engaging in certain financing transactions outside of Canada, including sales taxes, payroll and employee withholdings, and corporate tax reporting implications. For Canada and the US, there is information sharing and new processes at boarder security to more closely scrutinize cross-border business travel.
Sales & commodity taxes (or Indirect taxes) – There have been a lot of changes in the sales tax rules in Canada over the last few years, with significant changes affecting large businesses, cross-border transactions, pensions, and financial institutions. Many businesses are unaware of how these changes affect them. The CRA also continues to find and disallow ITC claims for expenditures with inadequate or improper documentation.
Non-arm’s length transactions – Whether domestic or international, if there is insufficient proof/documentation for the validity of the transaction between non-arm’s length parties (such as management or administration fees), the expense can be denied (but yet, the income still taxed in to the other party – resulting in double taxation).
Aggressive tax planning/schemes – Aggressive tax planning and abusive tax avoidance schemes are a global concern. The CRA has invested millions in its program to reduce aggressive tax planning or abusive tax avoidance schemes that contravene specific anti-avoidance provisions of the law. The CRA now has the tools to detect, correct and deter the non-compliance of taxpayers using aggressive tax plans, and there will likely be more audit activity in this area.
As part of this scrutiny, the CRA has recently sent notice that it will be increasing its audits of individuals who have claimed business or property losses. If you do receive an audit request letter or request for information, don’t sit on it or stick it in a drawer somewhere hoping it will go away or take care of itself (yes, people do this). Take the letter immediately to your accountant or tax advisor to assist you in dealing with it.

Not dealing with the CRA requests in timely manner can cost you hundreds or thousands or even more in additional taxes, interest and penalties, which can cripple a small business. But CRA auditors are people too – just doing their job, serving you, the taxpayer, as their client. You may have done everything correctly, or you may have made honest mistakes (CRA audits can be a great opportunity to learn and boost your tax management controls and practices). But be prepared. Talk to your accountant and ask them what your risks are and how you can reduce them.

[author] [author_image timthumb=’on’][/author_image] [author_info]Linda Spencer is a CPA, CA, Canadian Tax Specialist and Money, Marketing & Soul business coach. Her mission is to eliminate stress and anxiety around money and taxes, by empowering heart-centered small business owners with the tools, knowledge, strategies and mindsets to put them in the driver seat of their financial success and wellness.[/author_info] [/author]

road over water

8 Things You Need to Know as CFO of Your Small Business

Let’s face it, as a small business owner, you wear many hats – one being that of Chief Financial Officer (CFO).  And as the CFO of your business, you are focused on strategy, planning and operating your business in a way that optimizes your profits and cash flow, and ultimately your financial value.  As CEO (Chief Executive/Operating Officer), you have the big picture vision, the dream.  But as CFO, you are the gate-keeper, the one that ensures the investment in the big picture vision is sound.

This is why I am sharing with you 8 key things that top CFO’s are concerned with to help you make better business decisions and avoid the top small business money mistakes.

  1. Revenue / Sales

The key to any business success is SALES!  No sales, no cash, no business.  So as CFO, you need to understand your sales numbers, as well as your products and target customers, so that you can recommend and take courses of action to ensure that you are going to hit/exceed your sales targets…things like return on marketing, cost of client acquisition and retention, pricing strategies and policies.  The key here is knowing your market and having a good sales and marketing system, as well as having good customer service…after all, it’s easier to get repeat business and referrals than it is new business from strangers.

  1. Vision for the Future

So many entrepreneurs operate by the seat of their pants, looking at short term gains with no real vision for the future.  While this might work in the short run, it is not a sustainable model for the long term.  The cornerstone of what I coach my clients is always to start with the end in mind, and have that end in mind when making your business decisions.  This includes having a written business plan (operational, financial and marketing/sales)…it doesn’t have to be elaborate (unless it’s required by investors/lenders), but it does need to be written down somewhere, vetted and shared with your team, and re-visited regularly.

  1. Talent Acquisition and Management

At one conference I attended, the common message I heard from all the women entrepreneurs who shared their success stories is that the key to their success was building good relationships and having a good team.  This is consistent with my research and with what big business CFO’s have shared with me personally.  You need to have the right people doing the right things with the right tools…and you need to have a system for evaluating their performance, rewarding them and retaining them.  You want a team that will challenge your ideas and strategies, to ensure that you are making the best choices for your business and your clients (and you’ll want to encourage them to do so).

  1. Risk Management

Risk management has been one of my main focus areas for over 10 years.  It is an area that is top of mind for big business CFO’s, but it is one of the most neglected areas in small and micro business.  Yet, risk is an area that can sink a small business in a heartbeat if not managed properly.  Do you know what your risks are?  They could be legal, operational, reputational, financial and credit, compliance, technology, privacy, economic or market risk.  What if something went wrong in providing a service to your client and they sued you?  What if you made a big order with a supplier and they didn’t deliver?  What if an employee was committing fraud?  Or someone was stealing your intellectual property? Or if you didn’t pay your taxes? Or if your technology failed, or someone hacked in and stole your data?  Some effective ways to manage these risks include first identifying your risks, then ensuring you have adequate and appropriate insurance, legal contracts, effective policies and procedures, and internal controls.  How does your business measure up to its risks?

  1. Governance

Along with risk management, comes governance.  Corporate governance is the system by which companies are directed and controlled. It provides the structure through which businesses set and pursue their objectives, while reflecting the context of the social, regulatory and market environments they play in.  For many small business owners, corporate governance and reporting is an afterthought…the reason being may be that many small business are not held accountable by any particular governing body, so governance and reporting takes a back seat to everything else in the business.  Why does this matter?  For one, good corporate governance strengthens a company’s reputation and risk management practices.

Not having good governance structure and practices could lead to things such as the following practices that could cause harm to others and ultimately cripple a business:

  • taking risks which have serious consequences, neglect of duty of care
  • dishonesty, withholding information, distortion of facts
  • misleading communications or advertising
  • avoiding blame or penalty or payment of compensation for wrong-doing
  • secrecy and lack of transparency and resistance to reasonable investigation
  • harming the environment or planet, people or animals
  • unnecessary waste or consumption
  • invasion of privacy or anything causing privacy to be compromised
  • conflict of interest, betrayal of trust or breaking confidentiality

As CFO of your business, the gate-keeper, you need to ensure you have good governance and reporting practices to reduce your risks.

  1. Operating Productivity

Often, cost control is a function of operational productivity.  This includes measuring how well you, your team and your assets are working for you.  What is your return on time and investments? You can look at revenues and costs as a function of time, or people (by function of sales, marketing, operations, technology, admin), or assets (particularly if you’re a capital intensive business).

  1. Profits and Cash Flow

No entrepreneur gets into business with a view of incurring losses…and it sucks when that happens.  Profits are often the driving force for creating financial value and obtaining financing.  But it’s not just revenue minus expenses…you have to also take into account depreciation and other costs indirect costs that you might not be thinking of on a regular basis, such as interest, taxes, and what you pay yourself (and YES – you should be paying yourself, just as you would for any other employee).

Even more important than profits, I think, is cash flow…you need to know what cash is coming in (receivables and collections) and going out (payables, payroll and taxes), and when, so that you can manage it effectively and ensure that you are still paying yourself, your employees  AND all the other bills.  That’s why it’s important to track, reconcile your accounts and review your cash flow at least on a monthly basis (or weekly is better) so you can make quick decisions to bring in more cash, especially if you’re facing a shortfall.  Doing so can also help identify problem areas in your business that need further investigation.

  1. Tax Planning and Optimization

As a small business owner, you have options as to how you structure your business, and what makes the most sense for you from a tax perspective…you don’t want to be paying too much tax, but also need to ensure you’re not under-reporting your income or over-deducting expenses.  Unexpected tax audit adjustments can be costly, and come with significant interest and penalties.  I’ve seen businesses go out of business because of unforeseen tax assessments.  This not only goes for income taxes, but for sales taxes and payroll taxes as well.

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How do you track and report all this?  Where do you start?  Start by working with your professional advisors… Ask your accountant questions so they can help you understand what your numbers are telling you.  Hire a business consultant – they’re trained to see and understand the big picture, analyze the situation and identify areas for improvement, as well as the solutions to implement for greater success.  If your concern is sales, hire a sales consultant or coach. Talk to your lawyer about hedging your legal risks, and to your business insurance agent to ensure you’re adequately covered.

Still not sure?  Send me an email…I’d be happy to discuss your situation to see how I can help directly or refer you to someone in my vast network of business experts (accountants, lawyers, marketing strategists, sales coaches, social media experts, web and graphic designers, content writers, technology solutions, insurance specialists, financial analysts and advisors, HR specialists, recruiters, and more!).  And check out upcoming workshops and programs than may assist you www.visionspire.ca/events

Contact Linda@visionspire.ca .

 

[author] [author_image timthumb=’on’][/author_image] [author_info]Linda Spencer is a CPA, CA, Canadian Tax Specialist and Money, Marketing & Soul business coach. Her mission is to eliminate stress and anxiety around money and taxes, by empowering heart-centered small business owners with the tools, knowledge, strategies and mindsets to put them in the driver seat of their financial success and wellness.[/author_info] [/author]