Truths About Bankruptcy

For some individuals, there is no alternative. Financial debt can eventually lead to personal bankruptcy. Although the prospect of absolving one's self of debt by this method is a frightening thought, the truth is that there are many misconceptions surrounding the bankruptcy process that serve to make a difficult situation even worse.
 

Many people believe the misconception that filing for bankruptcy requires hiring an expensive lawyer. Truth be told, Canadian law states that lawyers cannot serve as bankruptcy trustees. In fact, small bankruptcies are filed by a trustee and do not appear before a judge. Moreover, if you're worried about protecting your privacy during this difficult time, fear not. Since 1997, personal bankruptcies are no longer advertised in the newspaper so your privacy in this delicate matter is assured.
 

Some have an image of the bankrupt individual sitting penniless in the street, hat in hand. That's a fine cartoon image but not reality. Declaring bankruptcy requires committing to a modest lifestyle for at least nine months. Different provinces have different rules regarding the amount of money you may retain as well as which possessions are protected.
 

A common untruth is that all debts are erased upon declaring bankruptcy. In fact, some debts are not. Child support and alimony are not changed. In many cases, student loans are also not erased.
 

Fearful that you will remain bankrupt for life? Fear not. Once your obligations have been fulfilled, you can be discharged from your bankruptcy. In a majority of cases, this occurs after nine months (but it can be extended if there is reasonable opposition from interested parties). Also, believe it or not, many people can re-establish their credit within one to two years after declaring bankruptcy.
 

No two cases are the same. But, before making a decision about declaring bankruptcy, do not merely visit the local rumour mill. Do the appropriate research carefully.

Incorporate in Canada with CorporationCentre.ca
Click. You're incorporated ®
 

Canada Goes Self-Employed

The truth is out. The latest trend in the business world is self-employment.
 

The recent recession has manifested itself in many ways across the nation. For many Canadians who found themselves unemployed as a result of cutbacks, downsizing, etc., the choice was despair or repair. The former meant waiting until something new comes along. The latter meant channeling one's talent and energy into a new venture as one's own boss. Statistics Canada revealed some fascinating employment figures. In April of this year,some 36,000 new full time jobs were created across the country. Nearly all these jobs were from self-employed Canadians. Overall, this translates into one in six Canadians being self employed.
 

Of course, becoming self employed is easier said than done. The process requires a large measure of self determination to make your idea work. In addition, self discipline is required in no small measure.
 

It may seem like a great convenience to get up in the morning and already be at work, if you're working from home. The danger is as great as the convenience. Experts have offered various tips to help you along.
 

It is imperative to make a distinct separation between work and home lives. Temptation to get distracted with household issues is very easy. Making your business succeed requires utmost full time concentration. If you wouldn't run out for milk and the cleaning at your old job, don't do it now.
 

Remember that you used to go to work at an office? Set up a distinct office at home and go there in the morning. Keep regular hours at your office. Get dressed for work in the morning.
 

These are but a few steps in maintaining a work ethic that will enable you to focus on the task at hand; launching a successful new job with an extremely determined boss – you!

Incorporate in Canada with CorporationCentre.ca
Click. You're incorporated ®
 

Is There An Employment Boom?

Recently released statistics by Statistics Canada indicated positive employment figures for November 2009. But, is the picture truly as rosy as it appears?
 

According to the figures, Canada's unemployment rate dropped by one-tenth of a percent from October, reducing the rate to 8.5 per cent. Full time jobs increased by 39,000, while part time employment increased by 40,000. While these 79,000 new jobs indicate a strong pick-up in the labour force and, subsequently reflect on a steady recovery of the nation's economy, there are a few factors to consider that may curb the euphoria.
 

First, it should be pointed out that economists agree that this pace of job growth is entirely inconsistent with the current pace of economic recovery.

Next, economists are concerned that the total hours worked declined by 0.3 per cent. In other words, more Canadians are working but less work hours are being paid. Simply put, Canadians are bringing home less money.
 

Another point noted is that almost all the new jobs – 73,000 positions – were in the service sector, primarily in educational services. It is quite possible that this gain may be an abnormal seasonal adjustment. December, therefore, may be far less positive in terms of actual job gains.
 

Economists are also concerned about weak job productivity as a result of various factors compounded to negatively impact workers' motivation.
 

Finally, self-employment fell by 32,000 jobs in November. In theory, this drop can be viewed positively. In a weak economy, self-employment gains are generally discounted. They are viewed as a fallback for unemployed Canadians who have no choice but to start their own businesses in lieu of regular work.
 

Is the Canadian job market truly on the mend? Only time will tell.

Incorporate in Canada with CorporationCentre.ca
Click. You're incorporated ®
 

How to Avoid Being Defrauded

As if the recession hasn't presented us with enough business and financial worries, a new item has been added to the worry menu.
 

According to the 2009 PricewaterhouseCoopers' Economic Crime Survey, some 56 percent of companies surveyed have reported falling victim to white collar crime in the last year's survey period. This number reflects a 4 point increase over the last two years. Indeed, the figures are the highest in the last six years. There has been a 10 point increase since 2003.
 

It would appear that difficult economic times increase the incentive to commit fraud as a source of income. The end result is due, in part, to a greater vulnerability of many companies whose control systems have been weakened or even eliminated due to downsizing and cost-cutting. Fewer funds are being allocated for fraud detection, prevention systems and investigation. As a result, financial fraud is increasing both from within and outside organizations.
 

Certain sectors have suffered from fraud the worst in the last year including communication, financial services, insurance, hospitality and leisure. Asset misappropriation and accounting fraud were the most common types of fraud encountered by the companies surveyed.
 

As an end to the recession is not yet in sight according to many experts, it is felt that fraud may continue to increase. Certainly, as many companies are yet to take preventive measures, there are adequate opportunities for the talented white collar criminal.
 

Canadian judges have responded to this increase in fraud crime by handing down severe and harsh punishments for those found guilty. But, the number of crimes reported far exceeds those caught. Businesses would be well advised to keep their eyes open and their systems well protected.

Incorporate in Canada with CorporationCentre.ca
Click. You're incorporated ®
 

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.

Incorporate in Canada with CorporationCentre.ca
Click. You're incorporated ®
 

Credit Card Code of Conduct

If you own a retail business, you will understand exactly what the issue at hand is all about. How much of your hard-earned money goes to the credit card companies through fees and charges that seem to keep rising?
 

Canadian Finance Minister Jim Flaherty recently announced the implementation of a voluntary code of conduct for the credit card industry. The new Code of Conduct has come in response to increasing complaints by small businesses about the excessive fees that they are being forced to pay.
 

The voluntary Code of Conduct, which may be revised over the next couple of months according to Mr. Flaherty, lists measures to give merchants freedom of choice in regards to which payment vehicle to use. The Code requires posting of online information regarding the interchange fees charged to retailers. It will also require the credit card companies to give retailers 90 days notice of any fee changes.
 

Responding to the announcement of this new Code, retailers view this as a positive development but would also like Ottawa to create an oversight body to ensure adherence. Creation of a parliamentary committee was one possible suggestion.
 

Mr. Flaherty pointed out that this Code of Conduct is voluntary and he hopes that the credit card companies will respond positively by voluntarily adopting the measures set out for the industry. The alternative, according to the Finance Minister, is to regulate the industry through legislation. But, as the credit card industry has objected vehemently to regulatory legislation, it is hoped that they will adopt the voluntary measures.
 

As other voluntary codes of conduct have been adopted by other industries, retailers hope that the credit card giants will similarly adopt these new guidelines.

Incorporate in Canada with CorporationCentre.ca
Click. You're incorporated ®
 

How Can I Convince My Clients to Stay?

Many an entrepreneur has started off in business hoping to make that first million with this new venture. Some have done well; others have not. Those who have succeeded have learned a very basic secret. Building a large customer base is not as important as building a strong customer base. These are the customers that will stay with you in good times and bad.
 

How does one go about finding these types off customers? The answer is that you can't find them; you have to create them. In other words, you must develop a strong bond and relationship with your customers. It is the human relationship, not the business one, which is the glue that will keep you together.
 

It certainly is not easy. You have to invest a great deal of time and energy to build that relationship. You need learn all that you can about a client. What are his individual needs? Does he have quirks that you will have to adapt to? How can you help his business beyond the product or service that you provide?
 

Listening is crucial. Take time to communicate personally with your clients. Nothing will ever replace the human touch. Spend time researching your client and prepare yourself for meetings with him. Elevate yourself to a point where you know more about him than anybody does.
 

Don't only meet with a client in order to sell. Meet in order to talk. Offer advice and assistance. A client who knows, not perceives, that you are truly interested in him and his business will work together with you to seal that bond.
 

Invest your energies in finding ways to develop a partnership of sorts with your clients. Once a customer perceives that his leaving the relationship is not worth the price, you will have discovered the secrets of client retention.

Incorporate in Canada with CorporationCentre.ca
Click. You're incorporated ®
 

Stimulus Funds in Canada to Become Permanent?

Much has been written these last few months about the effects if the recession, or whatever term one may wish to call the global economic situation since last year. Some countries have weathered the storm better than others. Certainly, Canada, while by no means having fully recovered, is on much stronger financial footing as compared to our neighbours to the south. Experts have attributed many factors to Canada's relative strength. But, putting aside the past, the questions that still remain unanswered pertain to the future.
 

One factor that is contributing to Canadian recovery is the strength of public confidence. As the belief in the stability of the economy grows stronger, the recession and its effects recede that much more. However, what will be if the global economy takes a nosedive once again. Are we prepared for that?
 

The Canadian government has been a major player in managing the recession and orchestrating the country's recovery. A large factor has been the availability of federal funds available through a variety of programs tailored to the various needs of the business community. While these programs were designed as a temporary stopgap to help weather the storm and keep the business sector liquid, government officials are now asking themselves whether it might be wise to make a basis of liquidity permanently available.
 

On one hand, officials see the inherent benefit of providing funds to facilitate the continuous functioning of core markets. On the other hand, researchers for the Bank of Canada are concerned that these "permanently available" funds might induce investors to take on excess risk, secure in the knowledge that there will always be a bail out plan ready.
 

While the debate continues, the government and the central bank have learned that they must maintain sufficient flexibility and readiness to respond to any future liquidity problems.

Incorporate in Canada with CorporationCentre.ca
Click. You're incorporated ®
 

Keeping Your Client Base: How Important is One Customer?

  If it came to a debate, the truth is that both opinions would be on the same side. Those who have succeeded in their business ventures will tell you what newcomers to the business world don't always know – it is far more important to hold on to strong customers rather than just finding new ones.
 

Of course, logic might deem otherwise. Shouldn't I always be on the lookout for new customers? Shouldn't I try to inflate my customer base, making it as large as possible? Let there be no misunderstanding. Customers are very important to a business. After all, no business, no income. But, let's be honest. Is there any guarantee that the new customer that you found yesterday will still be there tomorrow? On the other hand, even in times that are less than the best, the chances are quite good that a long-standing, loyal customer will still be there.
 

Client retention is vital to the longevity of a business. It is not enough to lure customers through pricing that beats the competition. After all, tomorrow the competition may lower his prices and your customer will follow the price trends.
 

Studies have shown that retaining customers will positively impact the bottom line of a business up to 15 times more than landing new customers. That's money in your pocket at a much lower risk.
 

Providing great service is not enough to guarantee customer loyalty. It is imperative to develop an actual relationship. Make the relationship deep enough so that the client will not be tempted to take his business elsewhere. When you develop a level of trust with your client that, ultimately, helps him as well as you, you will manage to build a relationship that will remain strong, even when times are tough.

Incorporate in Canada with CorporationCentre.ca
Click. You're incorporated ®
 

Show Me the Startup Money

You have the idea and the knowledge. The desire, drive and ability are there. You're ready to dive into that new business but, alas, you lack the money to start. Where does an entrepreneur secure the necessary start-up capital for a new venture?
 

By far, the easiest source of funds is from family and friends. Roughly 13% of all Canadian entrepreneurs use this route. Keep in mind, though, that family and funds don't always mesh well. It may be a better idea to have a relative or friend co-sign or guarantee a loan, rather than lend their own money.
 

Certainly, the lender with the most available cash is the bank. Unfortunately, though, banks often pose the most obstacles to borrowers. One solution to satisfying the bank's criteria is to apply for Small Business Financing via your bank. This federal program is backed by Industry Canada and guarantees 85% of the value of bank loans.
 

Angel capital may work for you. "Angels" are investors, generally former business executives or entrepreneurs. In addition to their money, they also can offer expertise and contacts. While they are not seeking control of your company, they do expect a healthy return and may wish to take an active role until their investment is returned.
 

It is well worth investing some time and energy to see if any government programs are applicable to your needs. Generally, these programs offer favourable terms and have flexible payment options.
 

Some 22% of Canadians have used credit cards to fund their start-ups. By checking interest rates, some have found these loans to be to their advantage.  Also, as new credit lines with lower rates become available, older loans can be repaid and interest saved.
 

Consider all your options and best of luck in your new business.


Incorporate in Canada with CorporationCentre.ca
Click. You're incorporated ®