Finding efficiencies in your business
As a business matures it often becomes more challenging to find growth opportunities. After capturing significant market share, there are now fewer potential new customers and less space for organic growth.
A business can restore its growth momentum through strategic moves – such as an acquisition or an expansion into a new geography – but these can be both costly and risky. A better place to start is by looking for ways to increase the efficiency of existing operations.
Here are some areas where you can look for new efficiencies:
Cash Management: Are there ways to maximize your cash flow through new billing processes? Does your existing saving/investing method maximize the value of your surplus cash? Check out our Scotiabank Cash Flow for business Tool to help you analyze cash flow for your business and create sound cash flow projections.
Supply Chain: Can you streamline shipping, storage and manufacturing processes? Are you keeping an optimal stock of inventory? Can you move toward a just-in-time or lean manufacturing process?
Information Technology: Are your systems up to date and do they allow your employees to work in the most productive manner? Are there inexpensive alternatives to your current systems? Visit the Get Growing for Business Small Business I.T. for Dummies section for valuable technical advice and solutions.
Human resources: Are you running a tight ship? Do you offer sufficient training? Does your bonus or incentive structure encourage hard work and loyalty?
Get Growing for Business will offer tips on streamlining your supply chain and cash management processes in one of our forthcoming newsletters Signup here.
Have you taken any measures to raise the efficiency of your enterprise? What methods did you find the most successful? Share your insights in the comments.
Maintaining a work-life balance
Raising a family and running your own business can be a challenge. If you have a young child and a young business, for instance, making sure you have enough time to attend to both can help you attain a happier and lower-stress life. Here are some tips for maintaining your work-life balance, as well as a more successful and fulfilling career as an entrepreneur.
Keep a schedule
A diary can be an essential tool to help you balance your work and family obligations. Make a schedule and establish realistic targets and deadlines for your business goals, but also schedule events to fill your valuable family time. While general family time together is valuable, you may be able to increase the enjoyment you and your family receive by making special plans. Think about the things that you and your family enjoy doing together. Just as you would make specific time on your schedule for a business meeting, you can make time for a movie night, a day at the beach or whatever else it is you would find memorable.
Allow for overlap
In some cases, it may be possible to allow your family and business obligations to overlap. If you need to take a business trip, for instance, you may be able to combine this with a family vacation or road trip. Although there may not be many occasions when your family and business obligations can comfortably overlap, if you take advantage of the times when they do you may be able to create unique and memorable family experiences while simultaneously giving your children an opportunity to find out about your work and your business.
Review your plans
You should review your business plan to ensure that all of your goals – professional and personal – are in alignment and are achievable with your plan. Speak with your Small Business advisor about finding solutions that can help. Your advisor may be able to help you find extra cash, bring in extra resources to help mitigate time constraints, or revise your plan in order to provide you with additional time with your family. Continue to review finances to keep yourself and your business on target, and revise your plan as necessary to maintain balance and peace of mind.
Ask for help
Self-confidence and drive are qualities that most entrepreneurs have in abundance. But don’t let that stop you from asking for help if you need it. If you have a board of advisors, seek their guidance on how you can maximize your time and make your operations more efficient. A mentor with similar background and experiences will be able to share his or her insights on time management and making your business, and your family, work better. As your business grows, you may want to consider a partner or a senior manager who can take on some of your responsibilities at the office. At home, as well, remember that you don’t have to do everything by yourself. You may be able to call on your partner, your parents or friends for support as needed.
Become a family business
Many entrepreneurs find advantages to bringing their immediate family members into their business. The biggest plus can be tax advantages gained through income splitting. Through income splitting, you can redistribute income within a family to take advantage of the differing tax rates, deductions and credits available to each family member and lower your household’s overall tax bill. Talk to your tax or advisor on how you can maximize income splitting to your advantage.
Have you had to balance work and family obligations? What advice would you give to fellow entrepreneurs?
Protecting your Intellectual Property
Understanding how to protect one’s intellectual property can be essential for Canadian businesses. It can prevent competitors from using and selling your business' products or services; help differentiate your offering and support your business’s expansion into new territories. Understanding intellectual property can also help you protect your ideas and prevent you from accidentally violating someone else’s. Here’s a primer on some of the things you need to know.
Through a patent, the government gives an inventor the right to stop others from making, using, or selling a particular invention for a maximum of 20 years after the day the patent application was filed. A patent can cover a new invention, a process, machine, manufacture, composition, or any new and useful improvement of an existing invention. It does not need to be a product that you sell, but could be any innovation that adds value to your business (for instance, a process that you use in production). Because the rights to a patent are transferrable, you can profit by selling it, licensing it or using it as an asset to negotiate funding. If your business has patented processes or systems, it can increase the sale value of your enterprise.
A trademark is often defined as a word, phrase, a design, or a combination of these, that can be used to identify goods or services and to distinguish them from others in the marketplace. A trademark can include your company name, logo or the branding of a particular product or service. It is not always necessary to formally register your trademark, as evidence of prolonged use can demonstrate ownership. However, for extra protection you can register a trademark in Canada for 15-year renewal periods. A trademark can help create value for your business or brand – whether it is a farm, legal practice or other service.
Businesses also have to be alert that they do not violate the patents or copyright of others. This often happens inadvertently, when enterprises don’t have a full understanding of the law. You need to ensure, for instance, that you have the legal right to use a photo in a brochure, so if you want to produce pamphlets or advertisements for your professional practice, consider this as you create these pieces. If you own a shop or restaurant that plays music, it will need to acquire a license from the Society of Composers, Authors and Musicians of Canada (SOCAN) to do so. Use only licensed software and make sure your employees are cautioned or prevented from storing unlicensed works on office computers.
By knowing the rules about patents and copyright, you can protect your own works and innovation as well as shield your business from legal difficulties. If you are seeking to protect your innovations or require further clarity on intellectual property matters, remember to consult with a legal professional for advice.
Avoiding workplace conflict in ownership transition
Preparing a business for sale or transition of management can be stressful, and not just for the owner. Unless the transition process is carefully managed, your employees may become worried about their positions within the company and their future prospects.
How you manage and avoid potential workplace conflicts may depend on your ownership transition strategy. However, one key to ensuring a smooth transition is to keep all of your key stakeholders – partners, employees, customers, purchasers, bankers and others – aware of the process. Below we look at how you can avoid some of the most common conflicts that emerge during an ownership or management transition.
Transition to partners
If you are selling your stake in your company to an existing partner or partners, you will want to negotiate the provisions for the potential sale of the company at as early a date as possible. Clarifying how you will handle internal ownership transition ahead of time, perhaps even years in advance, can not only help with potential conflicts over the sale of the business but may also be useful in other cases where ownership becomes uncertain (i.e, in cases of death or disability where ownership may transfer to the estate of a partner). You also want to discuss retirement plans with your co-owners and partners. If you are all of similar ages, it may be that you will be seeking to retire within a short time of each other. This could put the survival of your company in jeopardy. Discuss your plans with your partners and determine alternative options; such as a complete sale of the business or an employee buy-out.
Managing your employees’
Transition to employees
expectations is another step you need to take for a successful transition. Too often key staff members are not engaged in the transition process until it is too late. This can be particularly problematic if you plan to groom staff to take your place (either as owners or managers). You want to make sure your vision of the company meshes with their career ambitions and, also, that they are wedded to the company and its future. Also, you will want to communicate this to them at an early stage. Leaving things too long may mean that there won’t be enough time to train successors or to assure your customers and other external parties that the business is in sound hands.
Keeping your business in the family
The passing of the ownership of a business to a family member can be one of the most difficult changes for existing employees to accept, especially among long-term employees who do not feel that your chosen family member(s) shares your experience or vision. You will want to introduce your successor into your business at an early stage so that you can mentor them and make your other employees and partners comfortable. You will also want to make sure that your chosen successor is comfortable with taking over from you and that this path matches their own long-term career aspirations.
Because of the importance of succession planning, and all of the complexities involved, it's a good idea to involve a team of professionals at all stages of the process, including your lawyer, accountant, insurance specialist, small business advisor, and financial and estate planners. You can also consult Scotiabank’s Ownership Transition Tool to help you develop a roadmap for the future.
Have you considered ownership transition? What issues are you the most concerned about?
Managing workplace conflict in a growing business
Unless you are a one-person business, you will ultimately have to deal with workplace conflict. The types of conflict that you may encounter will vary on a situational and personal basis, and your means for successfully resolving a conflict may also be dependent on the stage of your business. Here are some tips for workplace conflict resolution for enterprises at various growth stages.
At the start of your business, you do not want workplace conflicts to distract you from the hard work of getting your enterprise off of the ground. Dealing with problems early will help prevent them from getting out of hand and distracting you from growing your business. In a start-up, the small staff may allow you to tend to the personal needs of your team, but you don’t want this to be your full-time job… so, it will be necessary to set ground rules.
Startups generally don’t have enough employees to warrant a dedicated Human Resources staff. As such you will want to have clearly delineated guidelines detailing such things as employees’ job duties, entitlements (overtime, vacation, etc…), mandatory standards of conduct (toward the business, customers and fellow employees) and procedures for discipline or dismissal. You may not need to invest too much time – or need to develop a full employee handbook – but you should make sure all staff understands the rules of your workplace and rules of behavior (including legal rules such as those governing harassment).
As you enter a growth stage, you likely have a larger workforce. With more staff there is also more opportunity for tension between employees and you will have less time to personally intervene and mitigate conflicts. Grow your conflict-resolution strategy as you grow your business. If you are building teams in specific areas – sales or procurement – you will want to ensure that your managers can manage people as well as their areas of business. Also, try to be proactive and consider areas where conflicts may emerge. For instance, would one employee have a problem if they were passed up for a promotion? Having rules in place can help you explain decisions.
With a mature business, your workforce may now be big enough to support one or more HR professionals. These professionals can help you bring training and conflict-management tools to your business. They should be able to guide you in establishing a system of best practices in conflict resolution suiting a larger enterprise. As your staff grows, you may inevitably find it difficult to maintain a personal relationship with people on your payroll. This means you won’t always be able to discern who is in the right in a conflict. HR staff will help you remain above the fray and save you from getting drawn into conflicts. You will want a conflict-management system in which fairness prevails. Ideally, HR staff will be able to ensure that all parties in a complaint are given a fair hearing and deal with matters fairly and without bias.
As well as dealing with conflicts, an HR team should be able to help you with other functions vital to your business: hiring, team building and internal communications.
In our upcoming Get Growing for Business blog entry we will look at some of the challenges faced by businesses in an ownership transition period, including some of the workplace conflict situations that can emerge if transitions are not handled smoothly.
You can also learn Human Resources management skills through our on-line Small Business Human Resource Management Certificate (SBHR) program. Scotiabank customers are eligible for discounted rates on this and other e-courses developed by the E-Learning for Business Coalition, a group of leading business organizations who support life-long learning as an important factor in building success.
Have you experienced any major workplace conflicts? If so, what were they and how did you resolve them? Leave your insights in the comments.
Small Businesses, Big Exporters
Your Business Stage
According to the latest survey from Industry Canada, only 9% of small and medium businesses are involved in exporting goods or services. However, that 9% has a big impact.
In a June 2011 report, Industry Canada said that about 86 percent of Canadian exporters were small and medium businesses. These were responsible for $68 billion, or 25%, while medium-sized businesses accounted for $51 billion, or 18% of Canada’s total exports, making a combined total of 43% of all exports.
Recognizing the large contribution that small and medium enterprises make to Canada’s export economy, the government and financial sector have established programs to facilitate small business exports.
Things to consider when exporting include understanding the laws of the country you are exporting to and the steps that you need to take in order to export. This can be particularly important for firms exporting agricultural products as many countries will have highly specific laws and regulations on the import of produce, animal products and live animals. In their Small and Medium Enterprise Centre, the Canada Border Services Agency provides a thorough guide for businesses in every sector dealing with most of these issues.
As well as information, the Canadian government – in association with financial institutions - may provide financial support for export-oriented small enterprises. Export Development Canada offers export financing solutions for Canadian companies, including the Export Guarantee Program, which enables you to obtain loans from your financial institution to provide you with the financing you need for your export-related activities or foreign investments. The program is designed to help smaller exporters compete for larger contracts with the EDC guaranteeing up to 75 per cent of loans made by Scotiabank for the financing of pre-shipment costs necessary to complete an export or a series of export contracts.
The Export Guarantee Program is available to all exporters in most sectors with annual sales of $25 million or less, and applies to all goods and services sold under a specific export contract. Its key benefits are:
* Advantageous for small exporters
* Does not affect existing operating lines of credit
* Suitable for any contract meeting EDC Canadian benefits criteria
* Includes an EDC guarantee of up to 75% of your Scotiabank loan
Scotiabank can also assist exporters with Export Letter of Credit facilities and other solutions. These services can help ensure exporters will receive payment for goods that have been shipped, helping them minimize risk and increase sales.
Do you have an export business or are you considering exporting? What are your major issues or concerns? Leave your story in the comments.
Is it better for a woman to have a female mentor?
Women in Business
Even though all the experts say that the most critical first step in starting a business is to have a business plan, it’s amazing how many budding entrepreneurs don’t heed this advice. A good plan lays out what your business does, how it can compete successfully, and how it will be managed and run, and also includes financial information like income and expense projections. It should be professional, complete but concise and easy to read. Check out the Scotia Plan Writer for business to guide you.
Another way to help ensure and even accelerate success when starting a business is to find a trustworthy mentor. I hear many successful women entrepreneurs say they wish they’d had the benefit of a female mentor when they launched their businesses. Perhaps research expert in women’s enterprises Dr. Barbara Orser, Deloitte Professor, University of Ottawa’s Telfer School of Management, says it best. “Mentoring is an important tool that can help women gain information and access to powerful networks, obtain feedback and receive objective assessments of marketability. The research shows that mentoring works.”
In one of her studies, Dr. Orser found that women were significantly more likely to be mentored by a female mentor, whereas men were equally likely to be mentored by male or female mentors. Is the gender of the mentor important for the success of the relationship? The same study found that men and women seek mentors for different reasons. Men were more likely looking for mentors to help them achieve autonomy, while women sought development support.
Why should gender matter?
In male- or female-dominated industries, the prospect of the mentee having access to a good role model might come into play. A woman being mentored by a woman in a male-dominated sector is likely to gain networking benefits, too. Or, because men and women tend to seek mentors for different reasons, it’s logical to assume that a stronger bond of understanding between mentor and mentee will be more likely to develop with the same gender.
Regardless of the reason to be mentored, at the end of the day a good mentor is a good mentor. Here are some qualities of good mentors that I have observed:
• Acts as a counsellor/teacher/guide willing to share skills, knowledge, expertise and resources
• Focuses on the mentee’s goals
• Invests time and energy in the relationship
• Provides guidance and constructive feedback – but doesn’t make decisions for the mentee
• Motivates others by setting a good example
Mentoring is not a one-way street. Without being committed to the relationship, mentees will not benefit from the best of mentors – female or male. If you want a successful relationship, you should:
• Be clear and realistic about your development goals
• Be open to feedback and willing to try new things
• Respect the opinion of others but be able to make your own choices and decisions
• Be respectful of the time constraints of your mentor
Both women and men can possess these attributes. So, when it’s all said and done, does gender in mentoring really matter? Many accomplished women entrepreneurs have told me there is something unique about being mentored by other women, especially when they understand the challenges of raising a family while starting and growing a business. As a long-time participant in the Step Ahead One-on-One Mentoring Program for women entrepreneurs, I often hear mentors say that they wish they’d had access to women as mentors when they were starting out. I believe that single-gender mentoring relationships are more likely to bear fruit. What do you think? Can you share the benefits of any mentoring experience you’ve had?
Small businesses make big impact in community employment
In 2011, Scotiabank and Canadian Federation of Independent Business (CFIB), launched the inaugural Small Business Big Impact Challenge, to recognize businesses that made exceptional contributions to their communities in the areas of:
• Innovative products and services
With such a large number of outstanding contenders from across Canada, our judges faced a tough challenge in determining the winners. Here, we recognize the runners-up in the Employment category.
Halifax Backpackers; Halifax, Nova Scotia
This hostel was one of the finalists in the Employment category for its active efforts to recruit from its local community and create jobs for youth with barriers to employment.
“When we first opened the business we received hundreds of resumes from visiting university students but virtually no applicants came to us from the local neighbourhood,” said owner and co-founder Michelle Strum. “To change this we only advertised in the window and by word of mouth, and eventually joined forces with local organizations which find placements for local youth with barriers to employment. “
That Extra Scratch Behind the Ear; Devon, Alberta
Although she is the only employee of her pet-grooming business, Debbie Spearing has shown that a one-person enterprise can have a big impact on employment in a community. Spearing’s unique operation provides pet owners with an opportunity to sit and attend the grooming session. This unique service attracts pet owners from surrounding communities, whom Spearing will direct to other local businesses and products that she patronizes.
Spearing says referring people to the other businesses in her town is beneficial to everyone and that she believes in spreading the wealth around her community
Dolphin Digital Technologies; Kitchener, Ontario
Co-founded by husband and wife team Scott and Jamie Burton, Dolphin Digital Technologies has made a big impact by dissolving the barriers to employment encountered by persons with disabilities. The company employs disabled persons as Virtual Technical Support Representative (VTRSs) who work to solve the IT issues of individuals, small home businesses and mid-size enterprise, regardless of where they are located.
“While the Dolphin Support Stream is innovative on its own, the people working behind the service are what make Dolphin Digital Technologies a social venture and a benefit to our community,“ says Jamie.
Civi-side: Hamilton, Ontario
Founded in January 2008, Civiside.com was created to help connect military reservists with employers that will support their military career. The mission has since grown, and it now serves all veterans and active service personnel in their post-military career search. “Veterans have a tough time re-entering the workforce for several reasons, including, having military jobs with no comparable civilian equivalent, a smaller network to cull job leads from, and employer fears that the veteran won't adapt to their environment,” says Civi-side founder Ken Seville.
Seville says the business has proven attractive both because of its mission and value proposition. “Our goal was to get as many employers as possible to guarantee interviews to veterans, we did this by giving them a good cause to get behind, a solid business case for doing so, and ease of joining.”