Tag Archive for: business

So you had this great idea and you wrote a business plan that you presented to your lenders of choice and you got rejected. You’re mad and disappointed, but now is the time to “think” things through strategically.

1.   Ask “why” you were rejected. They are obligated to tell you. Poor credit? Faulty concept? Poor business plan? It is important to find out the “why” because you might be able to correct your plan while your credit is a tougher thing to fix.

2.  If your concept and plan are not the problems; then, it is a credit issue. There are alternative ways to finance your business including Private lenders, Friends and Family or by Crowd‑Funding.

3.  You could take on a partner who doesn’t have the same issue you have. 50% of something is better than 100% of nothing.

4.  You can change your concept. This is not all that palatable maybe, but you may have no choice. Look at starting a business that requires little start-up capital. For example, start a service business that you can run from your home. Establish your business and simultaneously repair your credit. Rather than opening a restaurant at this stage, offer restaurant owners consulting services of one type or another.

5.  You can always start your business later. If your concept is strong, you’ll always have a market. I know that isn’t your first choice, but you may have to delay your dream.

Getting rejected is not always a bad thing. It really makes you stop and think things through. I always encourage my entrepreneurs to “hurry up and slow down”. I want to make sure that they are really ready before jumping into entrepreneurship. It’s always there as an option.

On The Daily Grind Business Podcast on November 10, 2017, Colin interviewed Mr. Derek Champagne, the founder, and CEO of Artist Evolution, a successful marketing agency. He is also the author of the popular selling marketing book, Don’t Buy A Duck: Stop Wasting Money & Only Do Marketing That Works and the host of his own weekly business podcast series. He talked about how he and his team reached their 10-year milestone by building brands and creating and executing marketing campaigns for clients.

He shared with the listeners an important message for anyone starting a business and that is the importance of “developing a mindset”. It is something that you do not hear of very often; so I am writing this blog to tell you how important it really is. As with everything that we do, we have the power to choose whether we think the glass is half full or half empty.

The Webster dictionary refers to a mindset as: “an established set of attitudes held by someone”. Psychologists further categorize the subject into 2 categories: A fixed mindset and a growth mindset. A person who has a fixed mindset is out to prove themselves, and get very defensive when someone suggests they made a mistake. In other words, they measure themselves by their failures. A person with a growth mindset is known to have perseverance and resilience to carry on after they have made mistakes.

As a result of some past successes and failures, Mr. Derek Champagne prefers to call his mindset a strategic one instead of an emotional one. He mentioned that when he started his new business 10 years ago he knew he was entering into a competitive market and in an industry that was so saturated he had to find ways to stand out and make his business “entrepreneur distraction proof”.

Here are the following behaviours and tools he used to get his business noticed.

  1.  He had a very clear vision of what he wanted and where his business would be in 10 years before he even started it. By establishing a clear vision and a strategic plan his ability to process everything that he did, every person he met, every opportunity that came across his desk and, every obstacle he was faced with allowed him to fit it into that vision.
  1.  He went “all in” when he started this business and was 100% committed to his business concept and doing all the necessary work that needed to be done. He rented a little office and always started his day wearing a suit. He believed that wearing a suit showed himself how committed he was to the business he was opening.
  1.  He put in the time. Although he wasn’t busy in the early years he sat in this little office 12 hours a day, 6 six days a week and he willed it to happen. “If he willed it, then it would be so”, he told himself.
  1.  As his business started to grow and his team expanded it was important for him to lead the team well and to always put them first.
  1.  He continued to educate himself by learning everything about the industry and about the people who were successful in the industry.
  1.  He stayed focused.

A very powerful message in this podcast for people who are starting a business. To listen to more of how he looked at his business and why he is successful today- click: dailygrindpodcast.com/2017/11/09/ep-8-start-with-a-clear-vision-with-derek-champagne/


How to build a positive business: 

From the first moment a customer enters your store, goes to your Website, accesses your Social Media channels or gets you on the phone, they are entering into your domain -Your business. The business you spent a lot of your time and money to develop and open. So think before you open your new business not only what you want your customer to experience; but also,  how you want to perceived and remembered.

We are talking about building a culture within your business that feels “good”. A business where people who both work and shop in your business really “like” your business. They talk about it to their friends, they refer your business to their associates and they come back to your business to buy from you again and again. There are companies who literally spend millions of dollars on advertising trying to attract and win these customers. On the other hand, there are other companies that don’t spend a dime on marketing because their loyal customers do their marketing for them. Creating a culture of this nature is a business opportunity that should not be overlooked. I can honestly say that I feel most businesses today are failing when it comes to creating a positive customer experience.

Learn to objectively look at your business through your customer’s eyes. It really doesn’t matter what your Website looks like or how attractive the interior of your store you think you may have if people are not buying your product and/or service.

  • The first step in creating a positive perception of your business is getting to know who you are selling to and what they are looking for. They are your target market so it is vital to your success to determine who your target market is. I will give you an example. Let’s assume you want to open and operate an ethnic grocery store that caters to several ethnic palates. While you might think that most people will remember your store for its unique list of products that it carries, your ability to create a more personalized shopping experience is just as important. They will remember your store if you took the time to show them the products they love and by getting to know them. By building a customer‑centered business, customers will seek you out and might possibly pay more for your products because of it.
  • The second step is to hire great people. Train them to interact with your customers in the way that you wish to be perceived. It has been proven that a positive environment leads to dramatic benefits to a business’ bottom line. Happy staff translates to happy customers and growth in revenues.

As a boss, you have a huge impact on how your employees feel in your business. Know your employees and find out what motivates them. For example, if he or she only wants to work during the week, why would you put them on the schedule to work a weekend day?  Deal with toxic people. It happens and you, unfortunately, will hire a person with a negative attitude. So many businesses hang on to these people but it saps the energy in your store and it brings everyone – your customers and your staff – “down”. Get rid of them.

By creating a positive perception, your business will be successful.

It costs 7 times the amount of money to acquire a new customer than it costs to retain an existing customer, so look after your customers and your staff and you will create a great business.


Entrepreneurs often wonder what investors are looking for from their financial projections. I always tell them that it is those projections that are most important – it is what an investor looks at first. It is not just how much money you are going to make that they are looking at; instead, it is how well you understand the business and its operational potential.

Your financials “prove” your concept and show the investor how you “think”.

What are the keys to a good financial forecast?

Be realistic

Show how your business will build momentum over time. It could be a matter of months or even years before you show a profit. Don’t set unrealistic goals for yourself and don’t try and “pie in the sky” it when courting investors.

Be aggressive, never conservative

Projections are for you as well. Being conservative will not get you “pumped” and drag you out of bed in the morning to chase your goals. Now, do not be unrealistic, just don’t show “lame” growth.

People buy goods and services                           

Projections should always start with the number of customers and then go through average spends to get to revenues. Never just have a number without the reader of your forecast being able to see where it came from. Be logical.

Percentages should be easily defensible

You should know your industry; so make sure that your forecasted costs and margins stay within the industry average. For example, if typically in your industry the cost of goods sold is 33% then you should not stray far from that. The professional organizations that represent your industry will have these percentages if you don’t know them.

Ask for the money you need.

If your business projects a loss in its first year, include that shortfall in your “ask”. You need start-up money and working capital. Don’t expect an investor to cover your salary; you will have to suffer a bit during lean times.

Show a funding timetable.

If you are looking for an investor, don’t expect to get ALL the money up front. Expect to see it come in as you have projected in your financial projections.


What are you selling?

Why should someone buy from you?

It sounds simple to you because you know exactly what your business is.

For example, you are selling a new product, you are offering a new service or you are expanding your current business. Simple. Right? Unfortunately not so simple.

The common problems that most existing  business owners and start-ups have are:

  1.  Being unable to clearly identify what they are selling. Some owners get so caught up in jargon that it becomes too technical for the customer to understand.
  2.  Not knowing their target market. If you understand who your ideal customer is, then you should know everything about that customer – what they are looking for and what they are buying.   You can then develop a message that they can relate to, a message that resonates with them.

Not having a clear and compelling message about what you are selling will have a huge impact on your ability to find customers and find lenders to invest in your company. When you create a clear message it establishes the foundation for your business going forward. Your customers will understand what you are selling and what you are known for. Everyone will understand ‘what you are doing’ and ‘why you are doing it’.

So how do you develop this message?

Start with answering 3 questions about your business:

  1. Who your target market is?
  2. What makes your product or service different?
  3. Why should they believe in you?

For example:

  1. Plan2Profit writes business plans for entrepreneurs looking for funding.
  2. Plan2Profit are just not business plan writers. They are business plan developers.
  3. Plan2Profit have owned and operated other businesses.

So, come up with your positioning statement and write it down. By writing it down you will come up with a succinct and consistent way to describe exactly what your business is and what it offers. It should just roll off your tongue. Take the time to clarify what you are selling. It is not easy, but, once you have a statement that you feel good about, test it. Run it by some of your friends and most importantly your potential customers. Why wouldn’t you do this?

To summarize:

At Plan2Profit, every day we work with entrepreneurs to help make their dreams come true. We are more than business plan writers we are business developers and work with people just like you to take an idea and build it into a viable and sustainable business.

You are dedicating everything you have to your new business; so take your time to clarify what your product or service will offer to your customers.

Let’s assume you want to open a women’s clothing store. This sounds simple but it isn’t. What makes you unique from any other clothing store? Why are you better than them? How about this statement:

“We sell comfy but chic casual apparel for women.  For all occasions, we will have you covered at no expense”.

Every start-up or existing business needs to do this exercise. You need to connect with your customers so they take their time to want to learn more about you and ultimately buy from you and your company.

Communicating who you are and why people should buy from you is just as important as building your business.

To help you create your brand message, you can download for free chapter one of Pia Silva’s book “Badass Your Brand” and the interview that she gives to her clients to help them determine their brand message.

To start, as a business owner, you MUST pay yourself. You cannot wait until the end of the year to look after paying yourself; instead, you must pay yourself regularly. You are managing the business, right? What happens if you get hit by a bus?  You’ll have to hire someone to do what you did and you’ll have to pay them…..so you should pay yourself.  Now how do you do that?

Do you take a salary or a dividend?

There is no right or wrong answer here. It all depends on this and that. And I cannot stress enough that you must pay attention to the advice of your accountant. But here is a good summary.

If your business is not incorporated or otherwise you set up your business as a Sole Proprietor:

You must declare all your business income as personal income; so you cannot pay yourself any other way. You are not required to pay Employment Insurance (that is an option now) but you must pay CPP premiums and of course income tax.

If your business is incorporated:

If you take a salary then like any other employee you hire, you are required to pay CPP, and income tax.

The salary is considered to be income and is taxable at the income rate that you fall under, unlike dividends, which are taxed at a lower rate.

There are benefits to paying you a salary:

  • If you need a line of credit or a mortgage on your home, then you should pay yourself a salary. The bank needs proof of your earnings.
  • It increases the limit on your Registered Retirements Savings Plan contributions every year – dividends do not.
  • It gives you the eligibility to receive a pension because you are remitting payments to your CPP – dividends do not.
  • Salaries are tax deductible whereas dividends are not because they are paid after-tax dollars.
  • As well, you will be able to claim certain personal income tax deductions such as childcare expenses against your salaried income. Again, you cannot claim these expenses against dividend income.

There are also disadvantages to paying you a salary:

  • You have to remit tax deductions and both portions of CPP contributions to the CRA. This requires more administrative work and it does reduce your business cash flow.
  • If you are operating a business whose profits vary from year to year, paying yourself a salary can trigger you tax problems because you won’t be able to carry back a business loss in future years, as you could if you had paid yourself by dividends.


There are advantages if the corporation pays you in dividends:

  • Dividends are taxed at a lower rate than salary, which can result in you paying less personal tax.
  • Not having to pay into the Canada Pension Plan can save you money.
  • Paying yourself with dividends is comparatively simple. You write a cheque to yourself from your corporation at the end of the year.

There are also disadvantages:

  • Receiving dividends doesn’t allow you to contribute to an RRSP as you don’t have any income, and
  • Receiving dividends instead of salary can “kill” other possible personal income tax deductions for you, such as child care expense deductions.

What is the answer?

There is a small business deduction for corporations making $500,000 or less, so obviously, your profits will be taxed at a lower rate. (About 16% depending on which province you operate in). If your business makes over this limit, then it would make sense to pay yourself a salary to reduce your corporate income to $500,000.

It all depends on the following:

  • What your cash flow needs are?
  • How old you are
  • How important it is for you to make RRSP contributions.

See, you need an accountant.


Measure your actual progress by Reviewing Your Business Plan.

Use your Business Plan. It is your compass only if it is reviewed on a regular basis. Review your
Financial Forecast. Have your monthly expenses increased or decreased? Things are going to
change; so continually update your business plan and especially your forecast with those
changes. The key to your success is tracking your numbers.

Focus on your Customers.

You are in business to solve a problem for your customers. So make sure you over deliver
because I guarantee your business will get noticed. They will remember your exemplary
customer service and they will tell many of their friends personally or on Social Media about
the experience they had in your business. They are definitely less accepting today of bad
experiences. One survey noted that 86% said: “They were willing to pay more for a better
customer experience.”

Hire Nice People.

Hire people with positive personalities and then train the heck out of them. Put the right
people in the right positions. Having your employees work in positions where they feel
comfortable is only going to benefit your quality of service. By putting them in the right
positions you are setting them up for success.

Train, Train, Train.

A trained employee makes for a great customer service experience and ensures that you have a
chance to build a relationship with a customer. An untrained staff member is a liability to all
around him. An untrained staff member makes mistakes and ultimately costs the business

Let your Employees Be Great.

If you have a good product, then the next step in delivering outstanding customer service is
letting your employees be themselves.

The robotic or disconnected employee can kill your business. If you have taken the time to find
the right person with the positive personality, and spent countless hours training them, then let
them go.

Give them the power to make a difference.

Many owners and managers are so concerned that their employees will not “tow the line” and
follow the protocol that they stop the employees from being who they really are.

Measure your Service Quality.

Don’t pretend that everything is perfect. It never is. There is always room for improvement
when it comes to service. If you ask for and get suggestions from customers and/or staff, act on
them quickly because if you don’t, you run the risk of losing their respect.

Always ask your employees about their interactions with customers.

Discover what your best customers think is great service and give it to them. For
example, if you have one customer who comes into your business regularly, take the time to
talk to him:

1.  Does he have a favorite product?
2.  Is there a particular item he likes that you don’t currently carry?
3.  Is there an employee he really enjoys being served by?

If you ask questions like that and get good answers, then once again act on them immediately.
If he sees you going all out, he will be mightily impressed; I know I would be.

Reward your Employees based on results in two areas:

1. Sales
2. Service

By rewarding positive performance, you will encourage more positive

Be Active Online.

Whether you are selling a product or a service you must have an up-to-date presence online. If
you want to be found then you must be active on all social platforms. The more platforms you
integrate into your website the higher you will rank on Google.

Many business owners put the cart before the horse and rent a space before doing the work to find out what they can afford.  They do this because they think they are going to be in business and don’t want to pass up on ‘such a deal’.

Don’t make such a major decision without taking the time to prove your concept before you commit to anything.

And don’t sign “An offer to Lease” either thinking that it is not binding because it is!

To figure out what you need go back to your financial forecast and look at your revenue and bottom line. What rent does it say you can afford.  $1500?  $1750?  If that’s what it says you can afford then that is exactly what you can afford and do not waiver.

You have to determine early on in the process if location is a real factor in your business’ success.  If you are a restaurant it may be or if you are a landscaping company, then maybe not.  If you are an event planning business maybe you can work from the comfort of your home.

However, if you feel the location is vital to your business success then it is important that you spend time finding what you feel is the best spot for you and your business.

You have to look at things like:

  • Parking
  • Delivery Access
  • Size

There are numerous other factors that come into play and they include whether the city is planning to rip up the street for the next two years and whether your business neighbor appeals to a less than favorable clientele.

You have to do your research.

If you find a spot that you think fits the bill, then do not run and sign a lease right away.  Have a meeting with the landlord so you can let him know that you are not ‘married’ to his space but would like to negotiate a rate in the event that you choose to proceed with a formal agreement.

You should do your homework in advance of your meeting to find out EVERYTHING you can about the landlord.

  • Is he in trouble?
  • Is he leveraged to the hilt with the bank?
  • Is he a good guy or a jerk?

You should also ask for all utility bills so you know what you can expect to be paying going forward.

On the topic of leverage, you have to understand that banks lend money on rental properties based on the quality of the leases held by the landlord.  In other words, the landlord needs to have good leases at good rates.  Knowing that you can expect to have to pay the going rate on a lease but the landlord can then offer you incentives like helping with capital improvements or delaying your first payment for a few months.

The capital improvement offer is what he will hold until the last moment.  He could maybe replace the ceiling tiles or add a second bathroom or replace front windows in exchange for you signing a good lease.

Watch the length of term and the CAM – Common Area Maintenance.  Rather than signing a 5‑year lease, sign a lease for 3 years with two, 3‑year options.


This is where you’ll get caught if you don’t ask the right question.  As a lessee, you have to pay for all common area maintenance ‑ landscaping, roof repair et AL.  Usually, this is a pre‑determined square footage charge added to your rent.

Sometimes $12 a sq. ft. can climb to $20 a sq. ft. in a hurry.  Watch it!

Until you sign the lease, you are in control.  Relinquish that power begrudgingly and only when you know you are ready to do so.

Before signing a lease, I strongly advise you to consult your lawyer. They are not only legal and binding contacts they are a huge expense to your business and unfortunately, there are risks.

We have listed some of the most common rent structures landlords use when negotiating a lease with their tenants:

Gross Lease

For anyone wanting to lease a space, this particular lease sounds like the simplest type of lease to understand and it is the most commonly used for office space. You pay a flat monthly rate based on the square footage in your space and you do not have to worry about any other expenses such as real property taxes, insurance, utilities, and maintenance. The owner of the building pays these operating costs also known as common area maintenance or CAM.

Full-Service Gross Lease or Modified Gross Lease

However, if you did not negotiate to pay a quoted rental rate that does not change throughout the term of your lease, your rate will increase after your first year if the owners building expenses increased. The increase depends on the percentage the owners operating costs increased and if you negotiated an expense stop.

So again do your research. If you sign a full-service lease then review with the landlord what operating costs increased and by how much and if you can, look at the costs and how they fluctuated over a period of five years. Also, it is important for you as a tenant to have in writing in your agreement the exact operating costs that will be paid by the owner of the building.

A modified gross lease is attractive to some small businesses because it requires the landlord to be responsible for the maintenance of the building. It also gives the tenant direct control over the costs it pays, such as electricity. For landlords, a modified gross lease enables them to retain control over their property. It allows them to keep the property maintained and avoid maintenance conflicts with careless tenants.

It has been noted, that entrepreneurs probably sign more Modified Gross Leases than any other.

Net leases

There are three types of net leases – Single Net, Double Net or Net-Net and Triple Net Lease (NNN Lease)

  1.  Single Net Lease. This lease requires you to pay rent plus a portion (Pro-rata share) of the building’s property tax. You are not   responsible for insurance premiums or other maintenance costs. This is the least common type of lease used by landlords.
  2.  Double Net Lease. This lease requires you to pay the property taxes and the insurance premiums (based on the amount of space you   are leasing) in addition to your rent. The landlord pays for all other exterior maintenance costs.
  3.  Triple Net Lease. This lease requires you to pay a share of all three additional expenses including rent, property taxes, insurance   premiums and other costs such as maintenance and repairs to the building. The rent is typically lower than the gross lease but if the   costs get out of control and you signed a bondable net lease that stipulates the lease agreement cannot be terminated if the costs   increase then you are responsible for the term of the lease. Landlords prefer using this lease agreement. They typically estimate their   expenses and charge the tenants a portion of these expenses based on the sq. footage they are leasing. However, if you do not read the   fine print your rent could not only fluctuate year to year but also month to month.

Percentage Lease

This lease requires you to pay a fixed rate plus a percentage of your gross income. They are commonly used for high-end retailers in multi-tenant locations such as malls and shopping centers.

What to watch out for!

Rentable vs Usable Space – The actual space you are renting is referred to as usable space and yet it is very common for landlords to include additional space including the lobby, hallways, stairs, and elevators to the calculation of your rent. So ask your landlord how he or she determines the amount of space that you will be charged and using.

Buildings Operating Expenses – You may be charged for some expenses that do not apply to the space you plan to rent. For example, the landlord may be charging you extra expenses such as penalties because he failed to pay taxes on time, other fees, and higher interest charges because the landlord refinanced his property; legal fees to resolve disputes with other tenants, or other structural repairs or replacements; capital improvements such as a new HVAC system are often absorbed by the tenants.

Be sure the percentage of common area maintenance charges is based on the size of the building and does not vary based on how much of the building is rented.

Escalation Clauses – Escalation clauses are both valid and very common in agreements and are used by landlords to pay for increases in the costs of their building. The clause allows a landlord to raise the rent if the cost of maintaining or operating the property increases. Most landlords will negotiate the escalation clause with you. Typically the CPI (consumer price index) is used as a guide to increase rent annually by the increase in the CPI index. The risk that you take is if inflation were to increase, you rent will also increase. So structure your lease for annual caps such as 3%.

Sometimes $12 a sq. ft. can climb to $20 a sq. ft. in a hurry.  Watch it!

How much money is your new business going to make?

If you start your business thinking you have a great idea but have no idea as to what money you will be making is just not smart business. Essentially you have to complete an Income Statement for your business before you have even signed a lease or asked someone for money. We are serious. Wouldn’t you like to know how your business is going to perform in its first year? We would. Your lenders certainly will.

Please refer to the blog: 5 Steps to Validating Your Business Idea to find out how!

You have to find out now what sort of money you will be generating and what is going to be on the bottom line at the end of the year aka PROFIT.

You must estimate:

  • Numbers of customers you will have
  • How much they will be spending on an average purchase
  • How much revenue you will be generating
  • What your cost of Goods Sold will be
  • How much you will be spending on Labor
  • What other expenses you will be incurring
  • What sort of money you should expect to see on your bottom line.

Yes, that is a huge amount of work, but let me ask you:

Wouldn’t you rather know what sort of money you are going to make BEFORE you go and spend all that money you need to make it happen?

And once you know that, you’ll be able to decide how much rent you can afford and how much money you can spend on marketing and whether you can afford to hire an Assistant Manager.

This is a tremendous volume of work but time well spent.  Knowing ahead of time whether your business is viable will save you tons of money and a lot of sleepless nights thrashing around under the sheets worrying where the money is coming from to meet next week’s payroll.  (And by the way I have been there and it is not fun.)

The Financial Forecast will speak volumes to you.

Typically new businesses run out of money because they also forgot to stick to their start-up budget and overspend with money they don’t have. Many overspend on leasehold improvements and fixtures because they think that the operational cash from their day-to-day business will pay down the excess. In most cases, early-stage businesses struggle to cover the expenses they have without putting the added pressure of having the operation cover start-up overruns as well.

How much Money do You Really Need?

So please set aside some money to help you get started and to carry you through the first critical and costly months of opening your business.

  • Have a contractor give you a good idea what it’ll cost to do the capital improvements.
  • Figure out what sort of equipment you are going to require and how much stock you are going to need to get out of the blocks.
  • Make allowances for working capital and deposits on rent and utilities – those things can kill your cash flow.
  • Look at your Financial Forecast and work out a Cash Flow statement. What dollars are coming in and what dollars are going out and when. Are you going to have receivables?  Payables?

Once you have an idea as to what funds you require, you then have to decide where the capital is coming from.  You’ll have some money and you can borrow some from somewhere, or someone can co‑sign a loan for you.  You may be able to make an application for some government program funding.

Usually friends and family end up being your banker and that is okay.  They will be a lot easier to deal with than a bank, but still, you want to be able to demonstrate to them that you have the wherewithal to pay them back.

« Your financial forecast will show them that. (we can do this for you!)