Starting your Business after a Career setback where to begin?

Starting your own business may seem like an overwhelming decision, but if you’ve recently suffered a career setback, it may be the best path for you. Not only will you be able to dictate what your responsibilities are, you may be able to set your own hours, find a business that you enjoy being in every day, and hire your own set of employees who will work hard to make your dream come true.

There are lots of details to consider, but with a good plan and some preparation, you’ll be ready to tackle anything that comes your way. The first step is to think about what type of business you want to start. Consider your hobbies and things you’re skilled at; if you have a college degree, you can apply it here. Your new business should be something you really enjoy, because it takes a lot of hard work to get up and running and you want to ensure that you’ll still be invested years down the road.

Here are some of the best tips on how to get started with your own business.

Think about the consequences first
Starting a business takes a lot of planning, and things don’t always go as planned. Think a few steps ahead and picture running your business on your own. Will you have the fortitude to handle it? Most small business owners work very long hours and don’t see much return on their investment in the first year or even two years; do you have enough money saved to get you through the lean times? Will your schedule allow for it? Write down all the pros and cons before taking any steps to ensure you won’t have any nasty surprises down the road.

Think hard about the type of business you want
All successful businesses start with a good idea. Don’t allow yourself to be drawn into a business concept that may only be a passing fad; instead, develop a solid plan and work from there. Ideally, it’s something you’re passionate about and/or have experience with so that from the beginning, you’re ready to jump in with both feet.

If you don’t have enough experience in any one field, think about becoming self-employed. This will give you the freedom to set your own hours and choose the type of business you want to break into, such as real estate. Becoming an agent will give you valuable experience and will allow you to work with people who might be able to refer you to new clients, meaning your money-making possibilities will only expand.

For more info on becoming a real estate agent, read on here.

Do some research
Test out the current market for the product or service you want to provide in your community and work your way out to see what the demand will be, and also to find out what competition you may be dealing with. If there is a similar business in your neighborhood, do some research to find out how they do things, what their customer base is, and what their price points are. This will help you decide how to proceed with your own concept.

Establish a budget
One of the most important steps in starting a business is to establish a budget and figure out if you’re going to need investors. Sit down with a financial advisor so that nothing is overlooked and think about what your startup costs will be, as well as how much you’ll need to get through the first several months to a year. Include funds for a storefront, if you’ll be buying one, as well as taxes, licenses, and funds for employees.

Starting your own business is a big job, so reach out for help from professionals or from people who have experience in the field. Garner support from friends and family, as well, so that the process isn’t so scary.

Article written by - Larry Mager

Contact your Accountants today click on this link —> https://capexcpa.com/contact

We are your Accountant 2.0

Change is the only constant in the new age of technology. Technology changes companies and even entire industries might get wiped out. The days of looking at a set of financial statements to see how the business is performing are long gone. Small businesses require more relevant information on their business to help make the decisions of tomorrow.

In the past Accountants have played the role of what we call historians. Accountants would typically speak to the historical financial performance and assume that to be a viable representation of the future growth of a business is inherently flawed. Let's think of a practical example, If Rogers Communication loses 20 million in revenue it wouldn't be such a big deal had they lost 20 million cellphone subscribers. Take that in for a minute basically the market now reacts to new information such as the subscriber base which isn't represented in the traditional financial statements. The understanding here is that focusing on the bigger pictures leads to the bigger results i.e. higher subscriber base will bring in the higher revenue.

As such each business has what are called key productivity indicators. It's important to study these metrics as you can not make something better and bigger if you don’t measure it. Measuring can be a lot of administrative work and can be counter productive unless you use the cloud. The cloud can shape your business and empower you the business owner with just in time information. Imagine having the ability to check how your business is doing above and beyond the business bank account.

Imagine being able to run the Profit and loss, balance sheet and cash flow statements all by yourself or just running simple dashboards to see how you did from this month versus the last month? Being able to do projections and set sales targets with a few clicks of the mouse and done. Setting up targets is critical for growth and understanding why you didn't hit those milestones is what financial information should be used for. Reading past the numbers is what business owners require and need and delivering this in a robust and efficient way is what the new breed of accountants will need to adopt.

The 21st century business owner wants a new breed of accountant who plays as a linebacker while they play the quarterback. The days of seeing your accountant once a year are coming to an end and for accountants being a benched player are slowly drifting away. It's game time and it's a exciting opportunity to help each business grow and flourish.

Embrace the silver lining of the cloud and feel the difference!

Choose Change. Choose Capex.

Contact your Accountants today click on this link —> https://capexcpa.com/contact

- The Capex Team

Top 5 things you need to know when buying a Business!

When buying or selling a business there are essentially two types of sales: an asset sale or share sale. The structure of the deal is important to avoid any unwelcome surprises. 
 
There are 5 main considerations you need to look for: 
 
1. Liability - With a share sale, all the assets and liabilities are translated to the new shareholders of the company. This means that the seller gets to walk away from any liabilities and the buyer would assume all responsibility for such. i.e. Pending tax returns or tax liabilities. As an Asset sale allows the buyer to essentially pick and choose the pieces of the business that are attractive the liabilities generally remain with the seller. 
 
2. Employees - In an asset sale, the non-union employees i.e. regular employees will not be taken by the buyer. More commonly, however, the seller will negotiate extended contracts for the employees so that wrongful dismissal claims from employees can be avoided. In a share sale, the targeted company's employees remain employed with the company as only the ownership of the shares are swapping hands. If the buyer chooses to retain or terminate the employees then the buyer will have to pay the severances accordingly. 
 
3. Complexity - Share sales are less complex than asset sales. An asset sale will require additional documentation of the assets being transferred over at fair market value and non-arm's length. In contrast, under a share sale the assets of the target company will remain within the company and only the shares and any shareholder loans would need to be accounted for. 

4. Taxation - Share sale - The proceeds of a share sale above the seller's adjusted cost base are taxed as Capital gains (50%) to be included as income. However, if certain conditions are met such as the business being a active business then the $824,176 lifetime capital gains exemption( 2016) can be used to avoid the capital gains taxation for qualified small business corporations. The capital gains taxation can be further reduced by using intercompany dividend transfer strategies. 
     
A buyer might prefer to do a share transaction to take advantage of the non-capital tax loss carry forwards (business losses) can be applied against future income. A share purchase also allows the buyer to avoid paying sales and property taxes on purchased assets. These taxes can be significant when combining the sales tax and the property taxes which can be avoided by implementing the right strategies. 

5. Taxation - Asset Sale - A seller will usually want the purchase price to be optimal to minimize the recapture of capital cost allowance previously deducted on depreciating assets. If the price paid for a real estate building was $500,000 the historical price recorded would have been that on the balance sheet. However, the fair market value of such a building in downtown Toronto today could fetch $1.5 million which would be hit with a 50% capital gain tax leading to a hefty tax bill. 
     
A buyer, however, will like to allocate as much of the purchase price as possible to the depreciating property so that they can take advantage of the higher tax depreciation expenses to offset income. The valuation of these transactions will be restricted by the fair market value of the depreciating property. The buyer will be hit with the property transfer tax on real property such as buildings and equipment and the sales tax on equipment or inventory. 
    
As you can imagine the complexities behind making such a business transaction requires a deep understanding of the tax act. It's always a good idea to get a second opinion and to structure the business deal so that it benefits both parties. Get a Capex CPA to help you keep more money in your pocket! 

Contact your Accountants today click on this link —> https://capexcpa.com/contact

- The Capex Team

Finding the “Unicorn” Client?

When starting off business you really have to consider how you will be targeting your potential clients. Having a high quantity of clients is great if you’re offering limited services and depending on your industry this strategy might actually make sense. However you get what you pay for and that holds true here. It is critical to anticipate the amount of effort and work every client will take before a pay day comes. Finding Unicorn clients is tough and keeping them is tougher but once you find those clients ensure you hold on to them because these clients are low cost/high profit. Additionally you might feel to genuinely go the extra mile for them. #Dedication

Clients today want the biggest bang for their buck which is understood but it is commonly not acknowledged by a new business person that every client carries a cost. Let’s look at McDonald’s for example each customer that drives into McDonald’s drive-thru carries a cost of $1.68 in advertising costs. If the customer only buys a Junior Chicken, McDonalds just lost money but they know you want a “combo” and their profit margins jump up by 600% #Strategy. In order to maintain healthy profit margins it’s critical to calculate the cost of a client by taking your cost of goods sold, hidden servicing costs plus your margin. Don’t just come up with an arbitrary price based off competitors as all these elements need to be embedded in your total cost of servicing.

The real pickle is when your competitors across town offer the “same” services/goods you are at a lower price. The client poses a valid question being why they should choose you? You need to be prepared to answer this question and no answer is better than explaining the value you bring to the table. Clients who appreciate value are more likely to remain loyal than those that are price sensitive. Learning to build and sell value is the best thing you can do for your business. Value is not tangible and this is when marketing really ramps up to help you stand outside the shadow of the price warriors in the market. Don’t sell yourself short as selling on value is a far better strategy to compete on than on prices.

It might appear that you are generating profits but once you add those hidden costs the story might change. If you think you signed a bad deal that’s okay! It happens just remember to cut your losses short and move on. Remember, Numbers don’t lie so believe what they say and make your decisions to stop the bleeding. Experience is an accumulation of many errors, learn from them and plan your next chess move.

Contact your Accountants today click on this link —> https://capexcpa.com/contact

- The Capex Team

Why the name Capex?

Quite recently at a networking event I got asked why did you name your firm Capex? Interesting question because I love explaining this one!

Capex is a finance term that stands for “Capital Expenditure” which is money invested by a company to acquire or upgrade, fixed physical, non-consumable assets such as buildings and equipment or a new business. So how does this all tie into the Capex name?

The driving factors of starting this Firm and choosing this name was to help educate small business owners on the benefits of Capex to the bottom line. Embracing change and making the necessary investment into your business is critical to stay cash flow positive. There are many unique challenges in every industry/business and Capex spending is used to mitigate these risks and gaps for the long term. The goal of this firm is to not only do your Governmental compliance work but also work together to build a more profitable business. We want to project the benefits of positive Capex investment which will lead to solid business performance and profitability.

Almost anyone can hire an Accountant for a business to do the taxes or bookkeeping but finding a CFO styled partner is a bit more rare. Apart from keeping the boat afloat we like to coach on business best practices and provide recommendations to better your business. Capex is helping one business at a time to focus on the big picture by laying down the necessary foundation steps in order for our clients to remain future-proof. We believe strongly in education and technology. Technology is part of the Capex DNA and without the efficiencies realized we would not be able to play the business advisory role we do for our clients.

We adore technology such as cloud accounting and cloud storage but more importantly we encourage our clients to also do so.  So to sum it all up in one word, one mission, one vision. Capex.

p.s. Capex is pronounced as "Cap-X" sort of like FedEx except CapEx :) Easy to remember see! 

Contact your Accountants today click on this link —> https://capexcpa.com/contact

- The Capex Team