Challenges Facing Business Owners When Designing Their Business Plan

A business plan is often referred as the roadmap to success. Anyone who runs an existing business or is in the process of starting up understands a sound business plan is the initial step for success. It will give a precise description of what the business will achieve, how it will be achieved, why and by whom.

Writing a business plan will help the entrepreneur organize his expectations for the business and develop a framework that will guide him in running the business.

Moreover, the business plan will become a relevant tool in making future decisions, especially those that will impact the business over the long period.

A business plan has several sections, however, when crafting your business plan, take time to define your mission and vision as well as your goals and objectives. These sections will clearly state the core of your existence and define what you want to accomplish and what your business actually stood for.

Before you can actually develop these sections, you need to identify your core values. Consider the stakeholders that your company is accountable.

The stakeholders may include the owner, employees, customers, suppliers, and investors. Your core values will be the foundation of your mission and vision as well as your goals and objectives.

Mission Statement

A mission is defined as an important purpose, accompanied by a strong conviction. Therefore, your mission statement must clearly state the purpose of your existence.

It must be about you and should create a connection with both the customers and the employees. Mention a specific goal that is tangible and should boost the value proposition of your business.

Often, generic, extremely long mission statements are confusing and may become useless. Brief and concise, single sentence mission statements are more preferred.

Vision Statement

Vision is defined as the anticipation for that which will come to be. Your vision statement must clearly impact how you envision your business.

It asserts your expectations; therefore, it should be an awesome, inspiring and hopeful statement of your commitment and dedication.

Make your vision statement detailed and compelling. It should point out why your company exists. It must also paint a clear picture of your intended outcome.

Vision statements that are generic or utterly unreasonable can become uninspiring and totally bland.

Business Goals and Objectives

Simply put, your goals and objectives will help you figure out where you’re going and help in executing or setting your vision and mission for your business.

Your business plan must clearly lay out, both your long-term and short-term goals. When setting your business goals and objective, it is important to make them SMART and logical.

This means that you need to make your goals Specific, Measurable, Actionable, Realistic and with a Time Frame.

Goals are generally qualitative and tend to focus on achieving the general picture of the business intentions. Primarily, goals are centered on customer service, market positioning and business growth.

Objectives, on the other hand, are centered on the practical daily operations anchored in the quantitative measure of business figures such as the number of customers, costs, revenue and other product-related metrics.

Conclusion

Having a sound business plan is like having a road map when embarking on a road trip. A road map will guide the traveler in making decisions how to reach his destination and to make his travel itinerary.

In a similar fashion, a business plan encapsulates the very core of your company’s existence, and will help you plan out and decide as you navigate your business towards success.

Ensure your business success with a sound business plan and realize your dream of starting and operating your business.

Registering Your New Photography Business With the CRA

I remember when I started looking into setting up my business and tax number, it was daunting! The government’s website was not super helpful given that photography is a unique type of business here in Canada. But, when I finally got up the beans to do it, the process was simpler than I expected! Please keep in mind regulations may be added from province to province.

Here’s my story:

Once upon a time, I decided to start a business with the government. I decided to do so because I was making income from my photography and wanted to charge GST. I discovered that I needed two things. A business number and a GST number. Registries will help you with this, but they will charge you a fee. There is another way!

Step 1: Choose your Business Type

There are five types of business you can register with the CRA.

Sole Proprietorship

Partnership

Corporation

Co-operatives

Non-Profit

We can eliminate 4. and 5. right away. The co-operative is a bit complicated for a photography business and the non-profit is… well… not for profit. So let’s look at the other three.

Sole Proprietorship

A sole proprietorship is the simplest. If you are the business, and the business is you; it could not function without you, then you are likely a sole proprietorship. It costs nothing to call the government and set up. This type of business blurs the lines between you and the business. If the business has debt, you are personally liable for the debt.

The next part is said best by the government themselves:

This type of business comes under provincial jurisdiction. If the proprietor chooses to carry on a business under a name other than his/her own, he/she must register with the province. This function is now administered by the Private Registries. If a sole proprietor establishes a business in his/her own name, without adding any other words, registering the business is not necessary. Filing a Declaration of Trade Name to protect your business name is strongly recommended.

- GUIDE FOR NEW ALBERTA BUSINESSES (07/2013)

Partnership

You can have a general partnership, typically between spouses, wherein each owner is 50% responsible and gets 50% profit versus a limited partnership where those things can be uneven. Equal partners in the business are each personally responsible for any debt or liability (bad stuff) the business might have. Equally, they share the profit. We chose to form a partnership so that one of us would not be the “employee” as we both work within the business. It was very, very easy to set up. And, cost us nothing! Partnerships can be identified by the letters LLP. Technically, our business is called “our business LLP”.

Corporation

This is probably a less likely choice. A corporation is much more complicated and comes with expense. The advantage is that it is a separate entity from the owners. This means that debts, obligations and liabilities are not the personal responsibility of the person. Corporations can decide to issue shares publicly or privately and must split the dividend amongst the shareholders. Corporations are highly regulated, and can cost a great deal to set up with lawyer fees, accountant fees and more.

A corporation can be identified by the terms, “Limited”, “Ltd.”, “Incorporated”, “Inc.”, “Corporation”, or “Corp.”

Step 2: Gather the information you will need to have

When you call the CRA for a Business Number you will need the following:

The SIN number of all parties involved.

The birth dates of all parties involved.

You business name.

Type of business (Sole, partnership, corporation)

Your business address and phone number

A physical address is required if you are rural in addition to your mailing list.

A list of things your business will do.

Would you like to file your taxes annually?

What is the official start date.

How much do you think you might make per year?

Step 3: Call the government (and seriously… call them)

I tried to register online… disaster! So, I called 1-800-959-5525*. I had the 9 things above written out on a pad of paper. The lovely lady on the other end of the line knew why I was calling to begin with but still, I let her know that I needed a business number and GST number. She asked me some questions (the 9 things above), gave me some advice, and the whole thing took 5 minutes. She was able to tell me both numbers immediately. At the end, she informed me that I would be mailed a copy of my business number and GST number. Two weeks later, my official documents showed up in the mail! And, it cost me nothing!

*Hours of service: weekdays from 8:15 a.m. to 8 p.m. (local time).

And that, my friends, was the birth of our Canadian business. Nothing crazy, or overly exciting. Just a phone call! Once I finally made the call to the government, everything was easy. They were kind, and very understanding of all of my questions. I did not need my husband in the room to complete the call, which was lovely. In fact, I was in the airport waiting for him to arrive from Seattle when I made the call!

What Funeral Directors Must Know Before Selling Their Business To A Competitor

“I have a very highly developed sense of denial”- Gwyneth Paltrow

Nearly every study done on business succession readiness indicates that 70% or more of all small and medium business owners have no written exit plan in place.

Funeral business owners are no exception even though they know, perhaps better than anyone else, the high cost of failure to plan.

As a funeral director, you are confronted daily with painful and stressful conditions that occur when your clients don’t make plans and are forced to make important decisions under duress. You probably also realize that most of this failure to plan can be traced to human beings’ intimate relationship with denial.

Denial is a powerful, double-edged sword. On the one hand, it helps us cope with devastating occurrences that come our way. On the other hand, it often leads us to eschew preparation and planning in favor of crossing our fingers and hoping for the best.

Funeral directors succumb to denial just like anyone else; putting off much-needed business succession planning in lieu of a “wait and see” approach.

While most funeral business owners express an intense desire to see the businesses into which they have poured so much of themselves continue after they have retired, few have a plan in place to make that happen.

Without such pre-retirement planning, owners are opening themselves up to situations which can severely compromise their ability to sell their businesses for enough money to retire.

Many of them believe that when the time comes to walk away from the business, they will be able to sell the business quickly to a competitor for a nice price.

Why Selling to A Competitor Isn’t Always A Good Idea

Over the past few years, large corporations have been buying up individually owned funeral homes in record numbers. Many directors have balked at this trend and are not interested in becoming a part of a “McBurial” chain.

It’s natural, then, that when the time comes for those directors to retire; they look for other independent mortuary business owners to whom they can sell their profitable business.

However, before selling your business to a competitor, be sure you understand some of the potential adverse consequences of such a sale.

1. The would-be buyer’s interest may not be genuine. In many businesses such as funeral homes, it is not uncommon for another business owner to feign interest in purchasing a competitor simply in order to gain inside information. By posing as a prospective buyer, competitors may hope to get access to your trade secrets, marketing techniques, or customer lists.

You must not give way any sensitive data until you have done due diligence and are satisfied that the prospect is genuine. One way to do this might be to ask for proof that they have the funds available to make such a purchase. ALWAYS ask potential buyers to sign a non-disclosure agreement that has been reviewed by your attorney. This can serve as a deterrent to “fakers” and protect your trade secrets during the selling process. You might also want to ask others you trust in your business about the reputation and integrity of the competitor who wants to purchase your business.

2. Competitors sometimes have a “low-ball” game plan. Selling to a competitor means that you are selling to someone who ostensibly has as good an insight into the funeral industry as do you. He or she has knowledge specific to the business that allows them to justify offering you less that the most desirable price.

For instance, competitors understand all the stresses and headaches unique to the funeral home owners; they understand the “buttons” that can cause an owner to want to sell. Because they can read you and your situation, they are not as likely to want to give you your price as an equity fund or individual buyer. Additionally, because they can perform the same services as you do, they often try and carve out the “good will” part of the business valuation.

3. You are negotiating with a single buyer

When funeral services business owners opt to find a competitor to whom they can sell they have greatly diminished their chances for getting their business sold more quickly for a better price. Much as in a real estate deal, the interest of multiple qualified buyers can result in a bidding war which may drive the price up. Having only one potential buyer puts you at a disadvantage.

4. If the deal falls apart, your reputation could suffer

It’s a sad statistic, but a true one, that there is only about a 3% success for selling a business in the United States. Even when there are qualified, thoroughly-vetted buying prospects involved, deals can, and do, fall apart.

When this happens, expect the business gossips to pick up on the fact that you tried to sell and failed. Word will get around quickly and can cause families who have trusted your establishment to provide services for years to become concerned that you might be in financial trouble. Other competitors might be prone to use this against you to persuade clients to use their services instead of yours.

5. Third-party intermediaries could ruin the outcome

Your competitor, especially if this is the first time he or she has ever acquired another business, might hire a third party intermediary, such as a business broker, to provide guidance during the buying phase.

Unfortunately, unlike real estate brokers, business brokers have a less-than-stellar reputation when it comes to making selling or buying a business easier. In fact, a close examination of failed deals reveals that many times the failure is due to having too many third parties slowing down the process.

Business brokers, in general, contribute nothing but headaches when someone is trying to buy or sell a business. They can make the deal, if it happens at all, take two or three times longer while causing both buyer and seller a lot more stress.

These are just some of the important things to consider if you want to sell your business to the competition.

If you do decide upon this course of action, then be sure that you have a business exit plan in place, that you have discussed all your strategies and options with your attorney and CPA, and that you have put together a list of questions for the potential buyer.

Treat this as you would a job interview, with a view toward getting the best possible candidate.

Some questions you might want to ask the potential buyer include:

1. Can you really afford to purchase my business?

2. What is the structure of your business, i.e.; are you a sole proprietorship, corporation, owned by family, an ESOP or private equity?

3. Can you provide a brief history of your company and explain what your goals for the future are?

4. What exactly about my business makes you interested in purchasing it?

5. What are your plans for my employees and management?

6. Have you ever bought or sold businesses before?

7. What are you doing to grow your own business?

8. Why do you think you would be the perfect owner for my business?

Selling your successful funeral business to a competitor, while it might seem easier and less hassle than other methods is full of risks.

You must do everything possible to alleviate these risks that could derail your retirement plans and leave you with less money than you need in order to live a comfortable life.

You need to be absolutely sure that this move is the right one, for you and your business, and exercise extreme caution and diligence during every phase of the sale.

If you have doubts, it pays to seek out the expert advice of another business owner who has been in your shoes and can give you advice and wise counsel.