As small business owners, we may from time to time find ourselves in the position of being a landlord. This may be for either residential property or commercial space that we are not occupying for our own business. In either case there are a few simple things that can make being a landlord, both pleasurable and profitable.
If you are leasing out commercial space, your lease is governed by contract law, and whatever you put in the lease will determine what your, and your tenants obligations will be. If you are leasing residential space you will need to abide by the provisions of your provinces landlord and tenant board, and the respective legislation governing residential tenancies.
First, you will need to know if you are going to make money. This is most important if you are looking to buy a rental property rather than if it is a property that you already own. If it is a property that you already own you may just be looking to minimize your expense. Get a real estimate of what your property will rent for and don't skimp on expense estimates. do not buy a property that will consume all of the income in the form of mortgage service costs, taxes, and maintenance costs.
Second, Treat this endeavour as a business, too many small landlords think of themselves as simple passive investors, and this is not an appropriate mindset. Make sure you have all of your legal paper work in order. Also make sure that the property is legal to rent, and have a solid lease. Consider joining a landlords group.
Third, Find the right tenants. Advertising for tenants is very cheap now with the likes of Kijiji, in fact it can be free. You will need three things to ensure that you are minimizing your risk. 1. A credit Report for your tenant, get these from one of the credit bureaus, they can be pulled online by almost anybody these days for a small fee. 2. Employment verification. Call the employer, and don't ask leading questions. 3. Get rental references from past landlords, and give more weight to older references as the current landlord may be telling a rosy story to get rid of a problem tenant.
Fourth. Keep your tenants happy. make sure your budget has adequate maintenance dollars, fix things when they break right away. It costs more to replace a tenant than to keep a good tenant. Always repaint after each tenant, and re-carpet frequently. The better the place looks the better quality of tenant that you are likely to get.
Finally, Take fast action on bad tenants. A single bad tenant can be trouble for small landlords with only one or two units. Take quick and aggressive action to limit damage that can be caused, don't wait for months and hope that things will get resolved, it always costs more the longer you wait. Their are a few tenants that know there way around the system well enough to get a few months free rent which reinforces the need for more than one past rental reference and a credit check.
This article is base on information from the February / March 2011 issue of Money Sense.
This Blog covers a variety of business management topics from Finance & Accounting to Marketing and Operations. For more information about Business Analytics please visit www.bizanalytics.biz
Monday, March 7, 2011
Tuesday, February 22, 2011
"Your Fired" Easy for Donald Trump
Reality is a bit more complicated.
If you are a business owner and you have employees eventually you will have to fire someone. It however is paramount that you undertake this process carefully to avoid a wrongful dismissal lawsuit, and you may be surprised at what an employee can get away with an still successfully sue you or have the provincial labour board rule against you and fine you. Please Read on.
A recent article in the online newsletter from the Human Resources Institute of Alberta outlined a case involving a City of Toronto employee who was caught sleeping on the job, was fired and successfully sued for wrongful dismissal.
The important parameters to remember when dealing with dismissals are:
How long has the employee been with your firm, the longer, the more difficult and more hoops you will have to jump through to justify your actions. Documented progressive discipline and a written progressive discipline policy are your only real defence.
What is the nature of the issue. Lots or employers dismiss for “Insubordination” however this again will depend on the length of time the employee has been with you and the nature of the insubordination, openly and verbally challenging a decision of yours as owner or manager is a lot different than a physical assault by the employee.
It is also very important that your employees know their status with your firm, many of us have contractors that we treat as employees, but if the relationship is not clearly spelled out to the contractor and they think that they are an employee, they may very well be able to go successfully through your provincial employment standards office with a successful complaint and it is going to cost you the business owner lots of money both in legal defence and penalties and fines, that will end up in the pocket of your dismissed contractor.
It is also interesting that the general economic climate will press on the decision of the employment standards board, often when things are more difficult and the unemployment rate is higher, the boards will say that more should have been done to rectify the problem before firing, again documentation of the problem is paramount to your defence
Accommodation is a new factor being introduced as a defence by employees. In short are there factors in the employees life that need to be considered in terms of the employer/employee relationship, and what has the employer done to accommodate the employees needs. Simply scheduling an employee for a shift that is convenient for the employer, without proper advance notice to the employee, and then firing when they do not show up can present a real problem to employers. This issue is becoming more prominent in both child care and elder care issues with employees and also with substance abuse issues.
Older employees are far more likely to pursue wrongful dismissals than younger employees. Once a staff member has been with you for over three months, unless they are caught stealing cash or physical property from you or there is a physical assault, almost all bets are off as to the success of a complaint should the employee launch one.
In short, if you have to fire somebody, and they didn’t steal from you or assault you, and they have worked for you for more than three months, tread carefully. Make sure that your line managers also know how to do this properly or you will be the one paying the price. A three strikes policy backed up with documentation is your best minimum protection.
For more information please contact www.bizanalytics.biz. If you would like to learn more about business please visit our new blog at http://businessanalyticsnews.blogspot.com/
If you are a business owner and you have employees eventually you will have to fire someone. It however is paramount that you undertake this process carefully to avoid a wrongful dismissal lawsuit, and you may be surprised at what an employee can get away with an still successfully sue you or have the provincial labour board rule against you and fine you. Please Read on.
A recent article in the online newsletter from the Human Resources Institute of Alberta outlined a case involving a City of Toronto employee who was caught sleeping on the job, was fired and successfully sued for wrongful dismissal.
The important parameters to remember when dealing with dismissals are:
How long has the employee been with your firm, the longer, the more difficult and more hoops you will have to jump through to justify your actions. Documented progressive discipline and a written progressive discipline policy are your only real defence.
What is the nature of the issue. Lots or employers dismiss for “Insubordination” however this again will depend on the length of time the employee has been with you and the nature of the insubordination, openly and verbally challenging a decision of yours as owner or manager is a lot different than a physical assault by the employee.
It is also very important that your employees know their status with your firm, many of us have contractors that we treat as employees, but if the relationship is not clearly spelled out to the contractor and they think that they are an employee, they may very well be able to go successfully through your provincial employment standards office with a successful complaint and it is going to cost you the business owner lots of money both in legal defence and penalties and fines, that will end up in the pocket of your dismissed contractor.
It is also interesting that the general economic climate will press on the decision of the employment standards board, often when things are more difficult and the unemployment rate is higher, the boards will say that more should have been done to rectify the problem before firing, again documentation of the problem is paramount to your defence
Accommodation is a new factor being introduced as a defence by employees. In short are there factors in the employees life that need to be considered in terms of the employer/employee relationship, and what has the employer done to accommodate the employees needs. Simply scheduling an employee for a shift that is convenient for the employer, without proper advance notice to the employee, and then firing when they do not show up can present a real problem to employers. This issue is becoming more prominent in both child care and elder care issues with employees and also with substance abuse issues.
Older employees are far more likely to pursue wrongful dismissals than younger employees. Once a staff member has been with you for over three months, unless they are caught stealing cash or physical property from you or there is a physical assault, almost all bets are off as to the success of a complaint should the employee launch one.
In short, if you have to fire somebody, and they didn’t steal from you or assault you, and they have worked for you for more than three months, tread carefully. Make sure that your line managers also know how to do this properly or you will be the one paying the price. A three strikes policy backed up with documentation is your best minimum protection.
For more information please contact www.bizanalytics.biz. If you would like to learn more about business please visit our new blog at http://businessanalyticsnews.blogspot.com/
Monday, February 14, 2011
Bookkeeper vs. Accountant - Whats the Difference?
I have been asked recently by several people what the difference is between a bookkeeper and an accountant.
The two are very similar, in fact there is a lot of overlap between the two rolls.
The following definition of a bookkeeper has been taken from the Canadian Bookkeepers Association.
Bookkeepers maintain complete sets of books, keep records of accounts, verify the procedures used for recording financial transactions, and provide personal bookkeeping services. The term bookkeeper refers to a person who can complete a full set of books up to and including a trial balance.
It is also true that accountants do many of same set of activities.
One may also think that the main difference is price. That may be true in part because the whole range of activities that bookkeepers do is very broad, and the education and training for a bookkeeper may be as little as work experience only all the way up to university degrees. The bookkeeper may only be doing data entry or the bookkeeper may be doing complex tax planning. Obviously the education and length of time that a bookkeeper has been practicing the trade will significantly influence how much a bookkeeper is paid. Many bookkeepers earn in the $30 - $50/hour range as freelance contractors. They may earn as little as $15.00/hours as data processors or they may earn as high as $85.00/hour for senior skill sets backed by certifications, and this amount would certainly be comparable to a designated accountant.
The one area that distinguishes accountants is their legal authority to perform Audit and Assurance Engagements, this ability is contained in the legislation of the various provinces granting the this authority to the Chartered Accountant, and in some provinces also the Certified General Accountants and the Certified Management Accountants.
When many small business owners go looking for day to day bookkeeping they often go directly to a designated accountants not realizing that they are probably going to pay a significant premium for the basic level work, work that will likely be delegated to a bookkeeper in the firm, all the while paying the fees of the professional that they occasionally speak with. This is a very similar situation with the legal profession where you always talk to the lawyer but if it your needs are simple and routine such as a will or real estate transaction, most if not all of the work is performed by a paralegal.
A word of caution is relevant when choosing a bookkeeper as most bookkeepers are not part of a professional organization and have had no professional certification. As previously stated, bookkeeping crosses a huge spectrum from simple data entry all the way to tax advisory services, so make sure you know what you are paying for. While a bookkeeper may have years of experience, they may have had no formal education in the field. This is however changing rapidly in Canada, with the likes of the Institute of Professional Bookkeepers of Canada, The Canadian Institute of Bookkeeping and the Canadian Bookkeepers Association all offering professional certification, courses and ongoing professional development. Many of the members of these organization not only have skills honed over years of public practice experience but their skills are also backed up by education and exams.
The two are very similar, in fact there is a lot of overlap between the two rolls.
The following definition of a bookkeeper has been taken from the Canadian Bookkeepers Association.
Bookkeepers maintain complete sets of books, keep records of accounts, verify the procedures used for recording financial transactions, and provide personal bookkeeping services. The term bookkeeper refers to a person who can complete a full set of books up to and including a trial balance.
It is also true that accountants do many of same set of activities.
One may also think that the main difference is price. That may be true in part because the whole range of activities that bookkeepers do is very broad, and the education and training for a bookkeeper may be as little as work experience only all the way up to university degrees. The bookkeeper may only be doing data entry or the bookkeeper may be doing complex tax planning. Obviously the education and length of time that a bookkeeper has been practicing the trade will significantly influence how much a bookkeeper is paid. Many bookkeepers earn in the $30 - $50/hour range as freelance contractors. They may earn as little as $15.00/hours as data processors or they may earn as high as $85.00/hour for senior skill sets backed by certifications, and this amount would certainly be comparable to a designated accountant.
The one area that distinguishes accountants is their legal authority to perform Audit and Assurance Engagements, this ability is contained in the legislation of the various provinces granting the this authority to the Chartered Accountant, and in some provinces also the Certified General Accountants and the Certified Management Accountants.
When many small business owners go looking for day to day bookkeeping they often go directly to a designated accountants not realizing that they are probably going to pay a significant premium for the basic level work, work that will likely be delegated to a bookkeeper in the firm, all the while paying the fees of the professional that they occasionally speak with. This is a very similar situation with the legal profession where you always talk to the lawyer but if it your needs are simple and routine such as a will or real estate transaction, most if not all of the work is performed by a paralegal.
A word of caution is relevant when choosing a bookkeeper as most bookkeepers are not part of a professional organization and have had no professional certification. As previously stated, bookkeeping crosses a huge spectrum from simple data entry all the way to tax advisory services, so make sure you know what you are paying for. While a bookkeeper may have years of experience, they may have had no formal education in the field. This is however changing rapidly in Canada, with the likes of the Institute of Professional Bookkeepers of Canada, The Canadian Institute of Bookkeeping and the Canadian Bookkeepers Association all offering professional certification, courses and ongoing professional development. Many of the members of these organization not only have skills honed over years of public practice experience but their skills are also backed up by education and exams.
Tuesday, February 8, 2011
Getting Paid - The Future isn't so simple
It was not that long ago that getting paid for the services or goods that we provided was fairly simple, “ Will that be Cash or Check”, in some cases it may have also been charged to the customers account. If you were a large firm and doing international business you may have even done a “Wire Transfer”
More recently Debit & Credit Cards have become common for consumer transactions and EFT, electronic funds transfers, have become common for business to business settlements.
Today I have the privilege of advising you all that the world of getting paid is about to get much more complicated, and regrettably more expensive also.
To start off, Visa and MasterCard have entered the Canadian Debit Card Landscape. These cards work the same as the interac cards that are issued by the major banks and credit unions with one important distinction, they are processed by the credit card companies and instead of the small interac fee, they charge merchant fees based on the merchants discount rate. This will add significant cost to many transactions, so be prepared. And unlike interac transactions, where you can add a service fee for the convenience you will not be able to add a fee to the use of these cards. If you accept Visa or MasterCard you will be obligated to accept these debit cards as well, and you the merchant will have to shoulder the cost.
As many merchants already know, their merchant fees keep going up. A large part of this is due to what is known as “Unqualified Transactions.” An “Unqualified Transaction” may not be what you think it is. In short an “Unqualified Transaction” is much more than a card not present transaction, ie. The card is not swiped on a point of sale device. Unqualified Transactions also include cards that have any sort of points or rewards associated with them. They also include cards that have high spend limits, over $8,000.00 of credit granted to the card holder. Again, if you accept credit cards you have no way to avoid the higher fees charged to you when a customer presents one of these cards. You can however investigate using another transaction processor. Business Analytics represents Pivotal Payments in the Red Deer area, they are a third party, non-bank, payment processor and they frequently can save you money over the fees charged by the major bank processors. Contact us if you would like more information.
According to a recent issue of the Journal “Payments Business” there are about 30 new forms of electronic payment in development, all of which will have new hardware and costs for the merchants that decide to honour the respective payment platforms. Not all will survive, but many such as cell phone payments likely will. At the other end of the spectrum they are also predicting the end of the check within about 15 years or so. Are you ready for someone to pay by their cell phone?
For more information please contact www.bizanalytics.biz. If you would like to learn more about business please visit our new blog at http://businessanalyticsnews.blogspot.com/
More recently Debit & Credit Cards have become common for consumer transactions and EFT, electronic funds transfers, have become common for business to business settlements.
Today I have the privilege of advising you all that the world of getting paid is about to get much more complicated, and regrettably more expensive also.
To start off, Visa and MasterCard have entered the Canadian Debit Card Landscape. These cards work the same as the interac cards that are issued by the major banks and credit unions with one important distinction, they are processed by the credit card companies and instead of the small interac fee, they charge merchant fees based on the merchants discount rate. This will add significant cost to many transactions, so be prepared. And unlike interac transactions, where you can add a service fee for the convenience you will not be able to add a fee to the use of these cards. If you accept Visa or MasterCard you will be obligated to accept these debit cards as well, and you the merchant will have to shoulder the cost.
As many merchants already know, their merchant fees keep going up. A large part of this is due to what is known as “Unqualified Transactions.” An “Unqualified Transaction” may not be what you think it is. In short an “Unqualified Transaction” is much more than a card not present transaction, ie. The card is not swiped on a point of sale device. Unqualified Transactions also include cards that have any sort of points or rewards associated with them. They also include cards that have high spend limits, over $8,000.00 of credit granted to the card holder. Again, if you accept credit cards you have no way to avoid the higher fees charged to you when a customer presents one of these cards. You can however investigate using another transaction processor. Business Analytics represents Pivotal Payments in the Red Deer area, they are a third party, non-bank, payment processor and they frequently can save you money over the fees charged by the major bank processors. Contact us if you would like more information.
According to a recent issue of the Journal “Payments Business” there are about 30 new forms of electronic payment in development, all of which will have new hardware and costs for the merchants that decide to honour the respective payment platforms. Not all will survive, but many such as cell phone payments likely will. At the other end of the spectrum they are also predicting the end of the check within about 15 years or so. Are you ready for someone to pay by their cell phone?
For more information please contact www.bizanalytics.biz. If you would like to learn more about business please visit our new blog at http://businessanalyticsnews.blogspot.com/
Sunday, January 16, 2011
Save money in 2011 on Telecommunications
I believe that this subject is near and dear to the hearts of many of our readers. We must have phone and fax lines in order conduct our business, yet each phone line is an expensive fixed cost, and in the case of Fax Machines, there are also equipment and supplies cost, and perhaps some maintenance cost as well.
Virtual Fax Lines For many of us a conventional fax line is going to cost about $40.00/month, plus long distance charges, the cost of a fax machine, paper, toner or ink cartridges, and more. The cost can easily hit $60 to $80 /month. If you have a new year’s resolution to save your businesses a few hundred dollars per year, then we all need to look into Fax to Email services. For as little as $5.00/month I get a virtual toll free fax number that I can send and receive faxes by email. There is still a small charge for usage but I rarely go over my plan limits. Best of all if you already have a fax number you may be able to port your existing number over to the virtual phone service thus saving you money on re-printing your stationary.
Virtual Voice Phone Lines I also have a virtual Toll Free Phone number that costs me only $2.00/month plus usage. If you are a business that has clients that are out of town you owe it to your clients to provide them the convenience of inbound toll free services. My toll free number rings through to my cell phone so I am always in contact with my clients, but I can forward the number as need be to any phone number as my requirements dictate.
Many of us are mobile service providers, and frequently we are the receptionist as well as the service provider. I have just recently come across a service that now allows you to receive your calls at all of your phone numbers simultaneously, if you do not answer, an automated attendant takes a message and the message is transcribed and emailed to you in addition to being stored in a traditional voice mail service. The advantage is that you can publish just one phone number on your business stationary and be assured you will always get your calls even when you are away from the office, or even at home. The cost for a service of this type starts at $12.95/month and includes a professional automated attendant, and you can have multiple extensions.
In addition to traditional phone numbers your business must also consider new communication types such as Skype.
For more information please contact www.bizanalytics.biz. If you would like to learn more about business please visit our new blog at http://businessanalyticsnews.blogspot.com/
Virtual Fax Lines For many of us a conventional fax line is going to cost about $40.00/month, plus long distance charges, the cost of a fax machine, paper, toner or ink cartridges, and more. The cost can easily hit $60 to $80 /month. If you have a new year’s resolution to save your businesses a few hundred dollars per year, then we all need to look into Fax to Email services. For as little as $5.00/month I get a virtual toll free fax number that I can send and receive faxes by email. There is still a small charge for usage but I rarely go over my plan limits. Best of all if you already have a fax number you may be able to port your existing number over to the virtual phone service thus saving you money on re-printing your stationary.
Virtual Voice Phone Lines I also have a virtual Toll Free Phone number that costs me only $2.00/month plus usage. If you are a business that has clients that are out of town you owe it to your clients to provide them the convenience of inbound toll free services. My toll free number rings through to my cell phone so I am always in contact with my clients, but I can forward the number as need be to any phone number as my requirements dictate.
Many of us are mobile service providers, and frequently we are the receptionist as well as the service provider. I have just recently come across a service that now allows you to receive your calls at all of your phone numbers simultaneously, if you do not answer, an automated attendant takes a message and the message is transcribed and emailed to you in addition to being stored in a traditional voice mail service. The advantage is that you can publish just one phone number on your business stationary and be assured you will always get your calls even when you are away from the office, or even at home. The cost for a service of this type starts at $12.95/month and includes a professional automated attendant, and you can have multiple extensions.
In addition to traditional phone numbers your business must also consider new communication types such as Skype.
For more information please contact www.bizanalytics.biz. If you would like to learn more about business please visit our new blog at http://businessanalyticsnews.blogspot.com/
Wednesday, January 12, 2011
The Final Sale
This is a Former Experts Article Published in July 2009
I was talking to a business owner who advised that he was retiring in three years. His sales plan was simple, one day just stop taking new orders. It amazes me the number of small business owners that do not see the value that they have built up in their businesses over 30 - 40 years. It may not be possible to sell some businesses, particularly those that sell intangible services, but not to try is a big mistake. Selling your business can release the years of sweat and tears that you have put into the business, the customer list alone is worth money as well as the brand name & reputation. By financing part of the sale yourself through an earn-out you may be able to retire years earlier while still providing a stream of income from the business.
Business Analytics represents Sunbelt Business Brokers in the Central Alberta Marketplace. If you are thinking of retireing from your business and would like to explore all of your options please contact us. www.bizanalytics.biz
I was talking to a business owner who advised that he was retiring in three years. His sales plan was simple, one day just stop taking new orders. It amazes me the number of small business owners that do not see the value that they have built up in their businesses over 30 - 40 years. It may not be possible to sell some businesses, particularly those that sell intangible services, but not to try is a big mistake. Selling your business can release the years of sweat and tears that you have put into the business, the customer list alone is worth money as well as the brand name & reputation. By financing part of the sale yourself through an earn-out you may be able to retire years earlier while still providing a stream of income from the business.
Business Analytics represents Sunbelt Business Brokers in the Central Alberta Marketplace. If you are thinking of retireing from your business and would like to explore all of your options please contact us. www.bizanalytics.biz
Sunday, January 9, 2011
Accounting Knowledge Required
Welcome back and Happy New Year to you all. Originally I had another topic in mind but meeting with an old friend over the holidays prompted me to choose a new topic, that of CRA Compliance.
My friend lost his $2.5 million/year business in the last year due to non-compliance issues with the Canada Revenue Agency. In short, he took his records to his accountant annually and when the accountant was done, he signed off of the paperwork and it was filed on his behalf. The problem is that he did not understand what the accountant was preparing on his behalf, and had he, he would have been able to identify the errors that his accountant was making. The errors, related to the years of 2000 to 2002 and first came to light in 2004, when the CRA requested certain document from him, which he provided, then the issue when quiet until last spring when a dozen police officers and 15 CRA agents showed up his front lawn in Calgary at 6 am to execute a search warrant. Between 2004 and 2010, different CRA agents had been assigned to the file, and then finally it seemed that the issue was resolved, at least according to my friend’s accountant; meanwhile the fees and penalties continued to mount.
The management lesson is simple, know what your accountant is doing, and understand your financial statements from the ground up. If you don’t have a basic understanding of your financial statements you too could end up in a similar situation. The CRA has put more businesses out of business due to owner non-compliance than poor management and weak business plans combined.
When I have permission from my friend I will write more extensively on this specific case.
For more information please contact www.bizanalytics.biz. If you would like to learn more about business please visit our new blog at http://businessanalyticsnews.blogspot.com/
My friend lost his $2.5 million/year business in the last year due to non-compliance issues with the Canada Revenue Agency. In short, he took his records to his accountant annually and when the accountant was done, he signed off of the paperwork and it was filed on his behalf. The problem is that he did not understand what the accountant was preparing on his behalf, and had he, he would have been able to identify the errors that his accountant was making. The errors, related to the years of 2000 to 2002 and first came to light in 2004, when the CRA requested certain document from him, which he provided, then the issue when quiet until last spring when a dozen police officers and 15 CRA agents showed up his front lawn in Calgary at 6 am to execute a search warrant. Between 2004 and 2010, different CRA agents had been assigned to the file, and then finally it seemed that the issue was resolved, at least according to my friend’s accountant; meanwhile the fees and penalties continued to mount.
The management lesson is simple, know what your accountant is doing, and understand your financial statements from the ground up. If you don’t have a basic understanding of your financial statements you too could end up in a similar situation. The CRA has put more businesses out of business due to owner non-compliance than poor management and weak business plans combined.
When I have permission from my friend I will write more extensively on this specific case.
For more information please contact www.bizanalytics.biz. If you would like to learn more about business please visit our new blog at http://businessanalyticsnews.blogspot.com/
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