The Importance of Cash Flow Management for Small Businesses

Cash flow management is a critical aspect of running a successful small business. It involves managing the inflows and outflows of cash to ensure that your business has enough liquidity to meet its financial obligations. Effective cash flow management can help you avoid cash flow problems, reduce stress, and make informed decisions about your business.

Why is Cash Flow Management Important?

Cash flow management is essential for several reasons:

• Avoid cash flow problems: Cash flow problems can lead to late payments, penalties, and even bankruptcy. By managing your cash flow effectively, you can avoid these problems and ensure that your business remains financially stable.
• Make informed decisions: Cash flow management provides you with a clear picture of your business's financial situation, enabling you to make informed decisions about investments, funding, and other business activities.
• Reduce stress: Cash flow problems can be stressful and overwhelming. By managing your cash flow effectively, you can reduce stress and focus on growing your business.

Tips for Effective Cash Flow Management

Here are some tips for effective cash flow management:

• Create a cash flow forecast: A cash flow forecast helps you anticipate your business's cash inflows and outflows, enabling you to make informed decisions about your finances. You can use templates like the one provided by the Canada Business Network: www.canadabusiness.ca.
  
• Manage your accounts receivable: Ensure that you have a system in place for tracking and collecting payments from customers. Consider offering discounts for early payment or using online invoicing tools like QuickBooks or FreshBooks.
• Manage your accounts payable: Ensure that you have a system in place for tracking and paying your bills on time. Consider negotiating payment terms with your suppliers or using online payment tools like PayPal or Stripe.
• Maintain a cash reserve: Having a cash reserve can help you weather financial storms and avoid cash flow problems. Consider setting aside a portion of your profits each month or exploring financing options like a line of credit.
  

Tools for Cash Flow Management

There are several tools available to help you manage your cash flow, including:

• Accounting software: Accounting software like QuickBooks or Xero can help you track your cash inflows and outflows, create a cash flow forecast, and manage your accounts receivable and payable.
• Cash flow forecasting tools: Cash flow forecasting tools like Float or Cash Flow Frog can help you create a detailed cash flow forecast and identify potential cash flow problems.
• Online banking: Online banking can help you track your cash inflows and outflows, manage your accounts, and make payments.

Additional Resources

For more information on cash flow management, consider visiting the following resources:

• Canada Business Network: The Canada Business Network provides information and resources on cash flow management, including templates and guides. Visit their website at www.canadabusiness.ca.
• Business Development Bank of Canada: The Business Development Bank of Canada (BDC) offers financing options and resources for small businesses, including cash flow management advice. Visit their website at www.bdc.ca.
• Small Business BC: Small Business BC provides resources and support for small businesses in British Columbia, including cash flow management advice and workshops. Visit their website at www.smallbusinessbc.ca.

Conclusion

Cash flow management is a critical aspect of running a successful small business. By understanding the importance of cash flow management and implementing effective cash flow management strategies, you can avoid cash flow problems, reduce stress, and make informed decisions about your business.

Take control of your cash flow today by implementing these tips and using the tools available to you. By doing so, you'll be able to ensure the financial stability and success of your business.

Video Series - Geyser Marketing Group Incorporation

Geyser Marketing Group - Business Incorporation and Document Filing Services

 

Since starting his business on a tight budget and out-dated computer in 2003, Ron Kunitzky has built Geyser Marketing Group into a leading partnership marketing agency in Toronto. Ron has seen success not only as the President of Geyser, but also as a published author of his book Partnership Marketing.

Ron shares his passion and knowledge for partnership marketing, which is a collaboration of organizations in developing a marketing plan to meet each other’s respective goals, through various seminars, speaking and training sessions helping other companies to learn to expand their partnerships and grow their business.

In the video above, Ron shares with us how he started Geyser Marketing Group and the ease in which he was able to get his business up and running with the help of CorporationCentre.ca.

For more information on Geyser Marketing Group, or to purchase a copy of Ron’s book, please visit his website at www.geysermarketing.com.

Overview of the Canada Not-For-Profit Corporations Act

Recently, a new law called the Canada Not-For-Profit Corporations Act ("CNPCA") came into effect aimed at eliminating unnecessary regulation and providing flexibility to the not-for-profit sector. The new legislation modernizes the corporate governance of not-for-profit corporations by promoting accountability, transparency and efficiency.

The Act in its entirety is lengthy and detailed so not-for-profits will have up to 3 years to transition into compliance. Below is a list of some of the Act’s more important provisions that may affect you and your not-for-profit.

Incorporation:

The process of incorporation has become more streamlined under the new Act making it faster and more efficient. Instead of submitting the letters patent and by-laws for review, incorporations now occur “as of right” upon submission of the signed articles of incorporation.

By-laws:

Before the Act was implemented Industry Canada required incorporating not-for-profits to prepare and submit by-laws governing corporate matters to be reviewed and approved at the time of incorporation.  Under the new legislation it is no longer necessary to draft and submit by-laws with the application for articles of incorporation. The new Act requires by-laws that deal with member issues only. 

Members:

Members’ rights are enhanced under the new Act. The new rights include: the right to submit a notice of proposal to request said proposal to be discussed during a members meeting; the right to request a meeting at any time; the right for non-voting members to vote separately from voting members on matters that impact membership rights; and the right to access corporate records to monitor board compliance.

Directors:

A director’s liability and standard of care are protected by the “due diligence” defence as understood in the common law duty of acting in honest and good faith. In this legislation specific liabilities are given to directors concerning payment and distribution to members, debt obligations, and wages payable to employees. However, directors who meet the standard of care are protected from liabilities through the “due diligence” defence under the new Act.

Financial Accountability:

The Act divides not-for-profit corporations into soliciting and non-soliciting corporations, which are subject to different regulations depending on which category your not-for-profit falls under. Your gross revenues are also dependent upon the rules and requirements for reporting under the new legislation.  

To facilitate the change, Industry Canada will not charge initial filing fees related to transitioning from the CCA to the NFP Act. To view the Act in its entirety, please click here.

CorporationCentre.ca $1 Incorporation Sale!

Small Business Week is over, but starting your business has just begun!

If you missed out on our first $1 Incorporations promotion, CorporationCentre.ca is offering another chance to take advantage of this great deal.

For one day ONLY, CorporationCentre.ca is offering $1 Incorporations.

On October 26th from 9 am to 5 pm ET,you can incorporate your business online with us for only one dollar.*

Click here for more information on incorporating your business.

Please note that this promotion is offered for orders placed on October 26th between 9 am and 5 pm ET only.

*Plus government fees. Click here for details on government fees for all Canadian jurisdictions.

$1 Incorporations from CorporationCentre.ca

On September 7th and 8th CorporationCentre.ca is offering you the chance to incorporate your business for only $1*. That’s right! Instead of the usual $99 service fee, we will save you time and money by providing $1 incorporations to celebrate Labour Day.


This offer is for 48 hours only!

Please visit CorporationCentre.ca or call 1-866-906-2677 for more details.

* Plus government fees and optional products and services.

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Le 7 et 8 septembre, CorporationCentre.ca vous offre la chance d’incorporer votre entreprise pour seulement $1*. Vous avez bien lu! En célébration de la Fête du Travail, nous vous offrons notre service d’incorporation d’entreprise pour $1 au lieu des $99 habituels.

Cette offre n’est valable que pour 48 heures!

S.v.p., rendez vous au CorporationCentre.ca ou composez le 1-866-906-2677 pour obtenir des renseignements supplémentaires.

* Frais du gouvernement et produits et services optionnels en sus.

$170 Billion Charged to Visa and MasterCard

Once upon a time, there was the Chargex card. Some received it from their bank but most Canadians lived without it. Today, more than 40 years after Canada's first charge card, there are more than 74 million credit cards in circulation, roughly 3.1 cards for every Canadian over age 18. The last available statistics indicate that Canadians charge more than $170 billion to Visa and MasterCard.

Studies show that the average person spends 112 percent more on a credit card as opposed to cash payments. In real terms, this means that Canadians are living well beyond their means. Many are juggling several credit cards and paying minimum monthly payments as low as 2 per cent of the balance, rather than paying the entire balance. In fact, more than 50 per cent of credit card holders opt for not paying the balance. Putting this into perspective, if your balance was $5,000 at 18 per cent interest, and you opt to pay only the minimum monthly, it would take almost 30 years to pay the balance, assuming you did not add to it.

Part of the problem is that credit cards are a basic necessity of today's society. Some cards also provide benefits that can be quite worthwhile. The trick is to be in control.

There is no reason to carry a different credit card for each store and each bank. One all-purpose card should suffice for virtually every need. (It is wise, though, to have separate cards for personal and business expenses). Check the interest rates as they vary greatly from card to card. Avoid temptation! Use the card for what you need, not what you want! Using a credit card as opposed to not carrying cash makes sense. Using it instead of cash that you don't have can lead to problems.

If credit card debt starts taking over your existence, don't be afraid to seek help from a credit counselor before it's too late.


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A Stronger Financial System

Ever wonder what happens behind the scenes of banks? For example, how does the bank manage its money?

Part of the system involves banks lending money to one another for short terms. The system is known as repurchase agreements, or repos for short. In order to raise money, a bank sells bonds or other collateral to another bank but agrees to buy back the collateral at a later date. Repos are part of a market that involves traders at the various banks trading with each other and shuffling the collateral back and forth.

All was well and good until the recent recession. The banks began to be leery of the solidity of other banks. The time proven system of trading began to fail, leaving even the healthiest of banks with a potential cash shortage.

Anticipating a possible major blow to the Canadian banking system, the Bank of Canada, together with the country's securities industries, began creating a plan to revamp the system and ensure crucial funding for the country's banks.

The plan involves establishing a central clearinghouse. Banks would no longer trade with each other but, rather, with the clearinghouse. This would eliminate questions of stability of other banks. Also, a central clearinghouse would be able to give a bank a clearer picture of their repos transactions, thus affording the bank a better way to manage its capital.

The Bank of Canada hopes that this new system will begin to be implemented by mid-2010 and will increase the overall safety and solidity of the Canadian banking system.

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Harmony in B.C.? The implementation of the Harmonized Sales Tax (HST)

July 1, 2010 is rapidly approaching in British Columbia. While it will be a national holiday as it is every year, it is also the date that the province will implement the Harmonized Sales Tax (HST). The jury is still out on whether it will be good for the province or not.
 

The answer, at this point, depends solely on who is asked. There are clearly going to be winners and losers in this new tax. The decision to implement the new tax is final. The actual impact is still theoretical.
 

It seems that the majority of the B.C. business community is clearly in favour of the HST. With 130 jurisdictions around the world using an HST style tax, B.C. simply cannot ignore joining the fray, if it wishes to compete for business investment. The province must offer the same tax advantages to the business community, lest businesses move elsewhere to obtain the benefits. Similarly, with e-commerce on the rise, retailers and manufacturers are competing with provinces like Ontario, which voted to adopt the HST.
 

A major challenge lies with the hospitality industry and other business sectors that currently don't have to charge PST, or services that don't have to charge GST. Under the new HST, these businesses and services will have no way getting back the HST. In essence, here will be the new tax burden with no relief in sight. Also, the average consumer will pay more taxes. Consumers cannot claim any portion of the HST but will pay more for products and services that are currently tax exempt but will not be so under the new HST.
 

Economists claim that implementing the HST is the right move for B.C. Come July 2010, B.C. will see if the economists are correct.
 

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Focus On One Thing

It sounds like instructions that you might give to a photography student or a line that you might hear during an optometrist's visit. But, it is also the credo of many business entrepreneurs. The secret of success of great companies is to do one thing very well. It is far too easy to go off on several tangents and try to "be number one" in a few ways. But, the business leaders who have made their way to the top will tell the same story. Concentrate your energies on one area and focus your attention in that one direction.
 

For example, sales are crucial to business. But, are great salespeople born or made? Some do have an inherent talent to sell. However, some companies have put their energies into strong sales training. This is a proven investment as salespeople no longer shoot from the hip. Rather, they become part of the sales force that drives the company forward. You focus on building the sales team, complete with team spirit.
 

Apropos team spirit, that may be the area requiring your attention. Employee retention is crucial in the business world. A constant turnover of staff will definitely have a negative impact. A key strategy employed by many experienced employers is to find ways to create an environment that makes employees desire to come to work. The answer is not always money. Making employees an active part of the company is valued highly. Employees' opinions do count. Chances are very good that your staff has terrific ideas about improving the company and its sales. Provide incentives but allow employees to be part of that incentive process. The sense of belonging creates the driving spirit so that everyone is part of the big picture.
 

Think of business success like an arrow. It propels forward only when the point is out front.

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Managing Your Corporate Knowledge

Thanks to your hard work and dedication, your business has grown. Once a small workforce that met for coffee and donuts every morning, the company has now grown into a major concern with scores of employees in several locations. As the boss, you knew each employee and probably taught them what to do. In a pinch, you could fill in for them as well. Today, though, the employees are names on an HR roster. The bigger issue, though, is that you have lost touch with what each employee knows. As the person at the top, it is vital for you to know how much human knowledge and skills are at your disposal.
 

A proper Knowledge Management (KM) system is a vital tool. It helps uncover the knowledge in your organization and reduce or eliminate gaps caused by employee turnover. Furthermore, it helps businesses avoid duplication of work.
 

A recent study of companies with a KM program revealed some startling figures. 63% of the companies had realized an acceleration of innovation. Two thirds of the companies had reduced operating costs. A similar percentage experienced a dramatic increase in teamwork and cooperation as well as an increase in responsiveness and performance speed. The study also calculated that failure to exploit knowledge in an organization effectively results in 6% of a company's annual revenue remaining unrealized.
 

Experts in KM recommend implementing an intranet-based information system in order to make information readily available and accessible within your company. Similarly, exit interviews for departing employees should be carefully conducted so that specific knowledge does not go out the door with the employee.
 

Finally, even though your business has grown, make the time to socialize informally with employees. In order to work as a team, you must know the team members.
 

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Happiness is the Key to a Successful Business

More than 40 years ago, a classic episode of The Flintstones featured a segment that was ahead of its time. Fred's wife, Wilma, stars on a television program and sings the Rockenspiel jingle. Those who remember this episode will recall that the song instructs wives to make their hubby happy.
 

     Even the creators of those stone-age characters realized that happiness is crucial to business growth. Entrepreneurs across the business spectrum share common goals in their desire to secure their profitable share of the market. That which divides business leaders in their quest is the method of how to constantly reach those goals. Believe it or not, some of the greatest business success stories have discovered that happiness is the key factor to continued growth.
 

     Of course, one might argue that happiness is an intangible factor that cannot be measured.  The truth, though, is that happiness can be measured. More than 30 years ago, a consultant named Fred Reichheld created a measuring system called the Net Promoter Score (NPS). The method is quite simple. After completing a sale or service, the customer is asked to rate the likelihood of their recommending the company to a friend or colleague. Low scores (detractors) are subtracted from the high scores (promoters) and passives (mid-range scores) are left out of the equation. The result is the Net Promoter Score.
 

     According to Mr. Reichheld's studies, world class companies scored an NPS of 20 – 50. Some score much higher. The more aggressive companies measure their NPS daily and analyze results to look for patterns of what makes their customers happy. By repeating those patterns, they can keep customer happiness high and continue their success. Conversely, they can also track the issues that bother customers and try to eliminate those unhappiness factors.
 

     Remember, a happy customer is a loyal customer, and a loyal customer is repeat business and recommendations.
 

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Small Business Leadership Skills: Keep Focused

There is a condition that is common to many entrepreneurs. Many suffer from it in varying degrees. The condition is commonly known as Multiple Idea Syndrome (MIS).
 

     MIS manifests itself by creating a temporary inability to effectively focus on one's business ventures due to an abundance of new business ideas that crop up daily in the mind of the entrepreneur. The result may be impaired management techniques, lack of leadership, and reduced attention to business development.
 

     Such is the mind of the entrepreneur. One good idea leads to another and opportunity is always just around the corner, waiting to be found. However, danger also lurks around the corner. New ideas are wonderful.  But, a business has to be continually nurtured and properly cared for. If you are the spearhead behind a business, it’s up to you to provide the leadership and spirit to keep it moving.  There is a time and a place for everything. Pitching continual new ideas may not be the best management technique for your business.
 

     You have a vision of where you would like your business to go. Keep to it! Don't allow yourself to veer from the path you planned by constantly trying new ventures at the expense of the ongoing one. You are the backbone of your business and must provide the leadership for others. Inspire through hands-on management. If you are perceived as being "all over the place'" your business will suffer. Set a course of action and lead your team to follow that course.
 

     And what of new ideas? Abandon them? Of course not. Just be sure that you don't lose focus of plan one before you set plan two into motion.
 

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Some Interesting Facts About Canadian Small Business

They may be called "small" but small business is a major player in the Canadian economy.

Take, for example, job creation. Over a ten year period, beginning in 1997, over 37 percent of all new private sector jobs were created by small businesses. In fact, almost half the Canadian private sector workforce – 48 percent - is employed by small businesses. If we dig a little further, over two thirds of the employment of five major industries are in small business: non-institutional health care, construction, accommodation and food, forestry, and general services.

Although economic figures vary from source to source, it is estimated that small business in Canada generates from one third to half the Gross Domestic Product (GDP) of the country. From a human standpoint, small business accounts for more than 5.5 million jobs from coast to coast. Taking a closer look at the human aspect of the figures, 95 percent of all Canadian service-producing enterprises are considered to be small businesses.

It seems that many Canadians prefer to keep their businesses small. Statistics Canada reports that 75 percent of all businesses employ fewer than 5 employees. Furthermore, the Canadian desire to keep their businesses relatively small far exceeds their American counterparts. Canadian business owners continue to work at more advanced ages in order to maintain operating the business that they built. More than a quarter of self-employed Canadians are over the age of 55. According to studies, older Canadians enjoy the freedom of lifestyle that comes with being self-employed and prefer to work longer in years in order to maintain that freedom.
 
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Starting a Small Business Survey: 12% to Establish Internet Enterprises

Starting and owning a small business appears to be the aspiration of many Canadians, according to the findings of a poll conducted for the Royal Bank of Canada (RBC).

Over the next several years, some 3.3 million Canadians intend to start their own business. Moreover, the survey found that there appears to be a change in preferred industry focus of would-be entrepreneurs. The desire to open a retail business dropped by 2 per cent from previous surveys; personal services and arts also dropped by 2 percent; and business services/consultancies dropped by 3 percent. The top industries of choice appear to be Internet related businesses. Nearly 12 percent of those interviewed plan to establish an online enterprise.

The RBC survey also rated advice by veteran entrepreneurs for newcomers to the business world. The top piece of advice was to do thorough research before setting up shop. Know exactly what you're getting into. Learn about your competition and be realistic about what share of the market you can capture.

Other pieces of popular advice of what to do before opening a new business included preparing a detailed business plan, networking with others in the field, allocating time and resources for marketing, surveying potential customers, and selecting the best site for the new enterprise.

The survey revealed that 61 percent of Canadian business owners are satisfied with the way they opened their business and would not change a thing, if they had to start over. More than 60 percent felt that, looking back, they probably should have started at a younger age. 58 percent of those surveyed felt that it would have been beneficial to get more financial advice at the onset.
 
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E-commerce Provincial Sales Taxes

E-commerce has greatly increased many retail sales. Businesses, large and small, can now reach customers from coast to coast with relative ease, if they have a presence on the internet. However, a very interesting – and tricky - question arises from all these sales. Does a website vendor in one province selling taxable goods and/or services to customers in other provinces have to charge and remit other provinces' sales taxes?

Would that the answer were simple and straightforward. Just as taxes differ from province to province, so do the requirements for inter-provincial commerce.

Keep in mind that when dealing with tax related issues, it is better to err on the side of caution. Therefore, you should consult with your accountant and/or tax advisor to verify your own personal situation. Similarly, you can obtain detailed information from the finance/revenue ministries of the specific provinces in which you are conducting online business.

There are a number of factors that will determine your tax collection situation. As many small business owners are aware, you are exempt from charging and remitting the GST if you are a small supplier. However, even a business with small supplier status may have to register for GST if they conduct business in provinces that currently have HST (Harmonized Sales Taxes). The GST is part of the HST. Therefore, de facto, you will have to charge and remit provincial taxes in those provinces.

Some provinces have passed legislation requiring out-of-province vendors to register for their provincial taxes. Other provinces "suggest" registering.

Were you aware of the fact that if you, as a vendor, do not collect RST (retail sales tax) in a specific province, the responsibility falls onto the purchaser?

The tax issues are complicated and the requirements, and loopholes, are plenty. Before pursuing your sales in other provinces, check the tax requirements carefully with a qualified tax professional.
 
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Need a Small Business Loan?

Eventually, most small businesses need additional capital, whether for start-up purposes or to expand an existing business. The technical process is usually straightforward; you have to ask for the money, whether from a financial institution or a private individual. Either way, the lenders will have some hard questions that you have to answer to their satisfaction. Being properly prepared is definitely to your advantage.

The lender will want to know what the money will be used for and how you will be able to repay the loan. Therefore, you should have a detailed business plan ready at hand as well as cash flow projections for your business. Additionally, a bank or commercial lending institution may wish to review your tax returns.

Prior to your approaching the lender, you may wish to check your credit rating via a credit report. Chances are very good that the lender will order such a report. Check your rating before the lender does. If you do not have a satisfactory credit rating, try and repair it before seeking a loan.

Be well-versed in all the details of your business and its finances, present and projected. Remember that applying for a loan is partly dependant on presentation, not just documents. You have to make an impressionable pitch to the lender and be able to answer all questions satisfactorily.

One area that shouldn't be overlooked is how you plan to share the risk with the lender. How much are you investing personally? This is equally important to the lender as is your knowledge of your business.

Consider preparing to apply for a loan as if you were making the most important sale of your career. If you can adequately impress and convince the person sitting opposite you, you may close the deal.
 
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Looking for Startup Money?

Money makes the world go 'round. It also gets your startup business up and running. Many a new business venture has failed due to a lack of cash to get the operation off the ground and get through the initial difficult months until the business starts generating revenue. Unfortunately, there are no guarantees as to where you will find the necessary capital. Many entrepreneurs tend to follow a similar path in seeking funds.
 

The most popular place to look is your own pocketbook. Often, people will mortgage their homes or sell property and possessions. Certainly, there is risk involved but business involves risk and personal commitment to the venture is crucial. Of course, "personal" funds may also extend to family and close friends. Most likely, they will be far more supportive than commercial lenders and their terms are likely to be far more favourable.
 

Next in line is your neighbourhood bank. Assuming that you have a creditworthy relationship, this may be the ideal place to secure a startup loan. Also, a line of credit is most important for your business. You may not need these funds initially but they may come in handy down the line.
 

Do your research well. There are numerous loans and grants available for new small businesses from government agencies and business associations. Your local banker or your accountant may be able to help direct you to sources of funds. Similarly, professional organizations may have helpful information.
 

Investors may be the right answer for you. Although many investors prefer to become involved with established businesses, the right idea at the right time may attract investment funds to you. Your business plan should be designed with investors in mind. Be prepared to change the business plan as necessary in order to interest a potential investor.
 

Finally, don't limit yourself to one source of funds. It may be possible for you to finance your startup form several sources. Decide what is best for your needs and don't be afraid to seek advice from professional advisors. 

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Small Business – Less Tax

However you dissect the finances of a business, specifically a small business, cash is the primary component of the bottom line. The more cash in the coffers, the more flexibility the business has.


The current global recession has dealt extremely harshly with Canadian small businesses. Reduced sales and credit restrictions have pummeled the cash flow of many worthy enterprises.

The Canadian government, seeking to ease the plight of this important and large sector of the country's business community, has established several stimulus programs through its Economic Action Plan to provide much needed economic relief. Realizing that continued growth of small business is dependant upon available cash, the federal government has passed legislation that increased the amount of small business income eligible for a reduced federal tax rate of 11 percent. Effective January 1, 2009, the eligibility cap was raised from $400,000 to $500,000. Canadian-controlled private corporations that claim the small business deduction are eligible for this credit. By increasing the eligible income by 25 percent, the federal government is helping small businesses retain more of their hard-earned cash. This, in turn, will help stabilize the business community, create new, much-needed jobs, and promote economic growth throughout the nation. It is estimated that this reduced tax rate will cost the country more than $120 million over the next two years. However, with nearly half a million Canadians out of work, it is a wise investment and money well spent.
Canadian businesses can obtain detailed information from the applicable federal government agencies.

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Shareholders Determine Executive Compensation

It's commonly known as say-on-pay policy. In the United Kingdom and the Netherlands, say-on-pay is mandatory. Now, as Canadians desire to be viewed as doing the right thing, say-on-pay will become policy at 13 Canadian corporations beginning next year.

Say-on-pay, although sounding like the name of a children's game, is by no means a game. It is a system whereby the shareholders of a corporation get to vote on executive compensation packages. Although the policy is merely advisory, it is by no means to be taken lightly. The board of directors is not obligated to follow the express directives of the shareholders. However, the vote by the shareholders - whether to increase top executive compensation, decrease executive pay, or leave it as is – can send a clear message to the board members.

In countries that regularly implement a say-on-pay policy, top company executives invest a good deal of effort to court shareholder votes. While they certainly have a vested interest in the outcome, the important factor is the open lines of communication between shareholders and corporation management. Regular discussion between the investors and operations is extremely important. The goal behind encouraging shareholders' input is to break down the barrier that currently exists and allow management to understand how their investors view the company's performance.

In an effort to encourage widespread acceptance of the say-on-pay policy, the Canadian Coalition for Good Governance is working on a model policy for boards to implement, including the wording of the actual resolution put to shareholders. As shareholders are likely to vote based on overall feelings and ignore the specifics, the Coalition hopes that the wording of their resolution will help shareholders focus their thoughts.

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Promoting Your Business on Social Networks

"The times they are a changin". Bob Dylan wrote these words nearly 45 years ago. He must have been predicting the future.
It used to be quite common that people assembled at social events and exchanged ideas, recipes, political viewpoints, and suggestions on where to shop for the best value. The 21st century has not replaced the traditional social gathering. However, it has augmented that with the modern and very powerful equivalent – the social media network.

Marketing studies have shown that recommendations from friends and family have the greatest influence on what people purchase. As millions have become attached to various social networking sites that connect people with similar interests worldwide, the circle of influence grows much larger.

While most social media sites are not designed as shopping venues, marketing specialists know that exposure on these sites can be extremely valuable. A prime example is Facebook. Facebook has more than 200 million subscribers worldwide. Members enter their profile on the site. Generally, this includes your demographics, preferences and, often, your occupation. Marketing pros at a company will post an attractive profile for their product or service. As soon as a Facebook member visits that company's profile, they are identified as a potential customer. Most Facebook members openly display their friends' networks. This enables the same company to view this circle of friends also as potential customers. Moreover, as the company can obtain a substantial amount of personal information about its online customers, this information can be extremely helpful in future marketing strategies and product development.
Businesses have discovered that social networks afford exposure to their companies that otherwise might not occur. However, it is wise to keep in mind that these are social networks and acceptance of a commercial presence will require imaginative marketing, rather than mere technical placement of corporate material.
 
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