Plan

Write a Business Plan: What to Include

Business plans need only be as big as what is required to run the business. Not all business plans are required to be a complete formal document suitable for submission to a financial institution or potential investors. Only develop and write a business plan which is suitable for the size of the company. A plan may be altered at any time, if or when circumstances change. Plans can start fairly simple and then be reconstructed as the new business grows and develops.

It is generally advisable to write a business plan before starting a new business. The planning process helps to get a clear understanding of the business, legal establishment and ways it may be developed. It is a way to help understand the purpose of the new business, marketing strategies and how to make potential profits. It is generally best to write a business plan in stages.

Sections to Include in Business Plans

A new business plan will generally have sections to cover different areas of the business. These generally include:

  • Executive Summary – An overview of the business plan to highlight key areas.
  • Company/Business Description – Describes the business, including legal establishment, history, purpose of the business and direction for the business.
  • Products / Services – Describes what the business will be selling or what services it will be providing.
  • Market and Industry Analysis – Provides analysis of current market and industry trends to establish the viability of a new business and projects the market share which the business may acquire.
  • Business Marketing Strategy and Implementation- Identifies the markets and methods to execute the marketing strategies. Includes projected sales budgets.
  • Operations and Management – Identifies how staff will be utilized, what systems will be in place, software which will be used and products or service development. Describes the management team and their responsibilities.
  • Financial Analysis – Includes any past available financial reports, projected profit and loss statements, cash flow tables and budgets.

It is also advisable to include a section for contingency plans. This section should identify potential risks to projected sales and marketing. Include strategies which may be implemented if these potential risks where to occur.

Business Planning – Where to Start

Preparing a business plan need not be developed in the above order, but started with Market and Industry Analysis. By identifying current market trends, customers’ needs, how to approach them, along with a general industry analysis may help determine how and when to start a new business. There needs to be a demand for a product or service before any profit can be made. This process helps to highlight opportunities, or lack of, that might otherwise not be obvious. Business marketing is a vital section to include in the plan.

Business plans need to be simple, specific, realistic and complete. A good plan will also require someone to follow up and check on it, to ensure all areas are being implemented. Developing a business plan helps to highlight the areas of strength and areas which will require the most attention. A business plan also helps determine if a new business is going to have a successful and profitable longer term outcome.

Vancouver Travel Tips and Tricks

Every city’s different, but with these handy travel tips about Vancouver, you’ll feel just like a local in no time. From dog owners to weather worriers, and on to those that just want to get the lay of the land before they arrive, this section tips will help get you ready for your very own adventure.

FAST FACTS

Population

Based on the 2011 Canadian Census, the population of the City of Vancouver is estimated to be 603,502. The Vancouver metropolitan region is home to an estimated total population of 2.3 million people, representing 52.3% of B.C.’s population of 4.4 million.

Languages

Federal government departments provide service in English and French, but most of the population speaks English as either a first or second language.

The City of Vancouver is quite cosmopolitan and is a mix of many multicultural groups. Because the city is multicultural, it’s also multilingual on an unofficial level. Its people speak many different languages and many follow the traditions of their native lands, sometimes moderating them with Canadian culture.

After English and Chinese, the most common mother tongue languages spoken are Punjabi, German, Italian, French, Tagalog (Filipino) and Spanish. More than half of Vancouver’s school-age children have been raised speaking a language other than English.

Currency

We recommend all visitors use Canadian currency (the Canadian Dollar – CAD) when travelling within Canada. Visitors can exchange currency at Canadian chartered banks, trust companies, credit unions, or at offices of foreign exchange brokers, but it is advised to have local currency on hand prior to arriving. Some hotels, merchants, restaurants and suppliers accept US or other foreign currency at a pre-determined rate, which may differ from the daily rate posted by financial institutions.

The Canadian Dollar is made up of 100 Canadian cents. Coins are in denominations of 5 cents (nickel), 10 cents (dime), 25 cents (quarter), $1 (loonie), and $2 (toonie).  Notes are in denominations $5, $10, $20, $50, $100 and $1,000.

Note that Canada phased out use of the 1 cent (penny) coin in 2013. If you are paying cash, the total amount of your purchases will be rounded either up or down to the closest 5 cents. Credit card and debit card payments are not rounded. For more information, visit the Royal Canadian Mint website.

Taxation

Most purchases in British Columbia are subject to a 7% Provincial Sales Tax (PST) as well as a federal 5% Goods and Services Tax (GST), with a few exceptions including liquor (10% PST) and accommodation (8% PST plus up to 3% hotel tax). Some goods such as food and restaurant meals, books and magazines, and children’s clothing are GST and/or PST exempt. For more information, visit the Province of British Columbia’s website.

Time Zone

Vancouver is in the Pacific Time Zone and observes Daylight Savings Time from the second Sunday in March until the first Sunday in November. You can see Vancouver’s time in relation to most cities around the globe by visiting www.thetimenow.com, which is also home to a Canadian calendar with important dates.

Workdays

Vancouver, like all major cities, runs 24 hours a day, seven days a week. In general, the standard work week is Monday to Friday, from roughly 8:30 am to 5:00 pm, but hours vary for each organization or business. Retailers are usually open seven days a week, and most stores are open from 9:30 am to 6:00 pm each day, except on Thursday and Friday, when many stores are open until 9:00 pm. Some retail stores (e.g. some drug stores and grocery outlets), nearly every hotel and motel, and some restaurants, remain open around the clock.

STRUCTURE

Business Structure Decisioning: Sole Proprietorships

The simplest business structure available to new entrepreneurs, sole proprietorship is a popular choice. But just because it is simple doesn’t necessarily mean its the best for your business. What follows is an explanations of the positive and negative aspects of being in business for yourself, and what options may be better choices if the bad outweighs the good.

What Is A Sole Proprietorship?

Before we discuss the positive and negative aspects of this business structure, let’s first define what sole proprietorship is. Sole proprietorship is a business structure that relies on one person to shoulder all of the legal ramifications of being in business, including financial and representation within the community. Direct sellers, contractors and consultants all fall within this category, as do any other businesses that are not incorporated or have limited liability status.

Advantages of a Sole Proprietorship

There are quite a few advantages to choosing a sole proprietorship business structure. They are:

  • Simpler Taxes: A sole proprietor files his or her taxes as if they were self-employed, and therefore will receive the same benefits. Additionally, there is only form to fill out (in the US this is IRS Form 1040; in Canada is the same form as everyone else, the T1);
  • Minimal Start Up Costs: Although in comparison to a corporation or limited liability company, sole proprietors have few (if any) start up costs to incurr when choosing their business structure.
  • Less Paperwork: When you are a sole proprietor, the need for paperwork is considerably less than for a larger business or corporation — such as payroll. If you are the only employee, then you can pay yourself directly out of your earnings instead of having to write checks.

Disadvantages Of A Sole Proprietorship

As with all business structures, there are both perks and drawbacks to every situation. Here are some of the disadvantages of becoming a sole proprietorship:

  • Liability Issues: There isn’t anyone else to take responsibility should something bad happen when you are a sole proprietor, like if a customer slips on the way up the stairs to your business or if your company isn’t able to stay in business after a couple of years and needs to declare bankruptcy. Therefore, if you are thinking about starting a business that has a higher-than-average risk of struggle (such as restaurants or manufacturers), you may be better off using a corporate business structure instead.
  • No Regulation of Financial Statements: Although sole proprietors still have to provide the governement with some sort of financial data at the end of every year, there are fewer requirements than with a corporation. And with less attention to the financials, many entrepreneurs flail before they realize they are in trouble. Ensuring that you’ve got a solid financial structure set up before you get going will alleviate this concern.
  • Higher Risk of Loneliness or Depression: People who work for themselves are often by themselves, and frequently becoming a sole proprietor means losing the water cooler social aspect of working for someone else. Make sure that you’ve incorporated social time into your work day, whether through networking or other means, so as to reduce isolation.
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Methods For Licensing Inventions: Preparing New Product Submissions

Companies that are potential licensees can be found by looking in magazines or catalogs that feature products by companies that are within an invention’s field of industry or one can go online and search using terms on search-engines that describe an invention and find companies that way. It is important to secure a patent pending before presenting an invention to manufacturers for licensing consideration.

Research Potential Licensee-Companies

The manufacturing/marketing company an inventor licenses his invention to, is called the “licensee” and the inventor or his agent is referred to as the “licensor.” If an invention is in an industry such as pet supplies, fishing tackle, health & beauty aids, etc., then one simply gathers information on companies that are in the invention’s field of industry, so that those who look reputable can be contacted about reviewing the new product-invention.

The advantages in securing a License Agreement for an invention include the following:

  • Ongoing royalty payments
  • marketing expenses are the licensee’s
  • an established company can gain wide exposure for inventions
  • product liability and patent-related legal issues are the licensee’s responsibility

Following Up

When methods used for locating potential licensees, yield lists of companies that look to be high quality and reputable in their industry, one can then contact them by written-letter or by email to request an opportunity to submit an invention to their new product buyer.

One can then either follow-up on letters/emails with a phone call or it can be requested that contacted companies reply to the letter sent, to confirm receipt of it and/or interest in a more detailed submission. The advantage of mailed letters is that they can be sent return-receipt, so that an inventor knows it was received, on a specific postmarked date.


It is usually more effective to state in a letter or email that it will be followed-up with a phone call. When one receives responses from manufacturers interested in further reviewing an invention, one can either send a product sample/prototype and further written details about the invention or request an appointment to present the invention in person at their buying office.

Rehearsing and Timing Presentations

A presentation should be practiced before making one in person. An inventor should be well prepared to make a presentation for their invention but should also insure that the presentation is timed, so that it does not exceed a reasonable time-limit.

A presentation generally should not exceed 20 minutes in length because executive buyers with manufacturing companies are usually extremely busy and a shorter power-presentation can be effective and is usually the best approach. A buyer can extend the length of a presentation if he chooses to, by asking questions after an inventor is done with the initial presenting.

Composing a License Agreement Proposal

An inventor should compose a sample license agreement that shows all of the terms and conditions that need to be included in the contract, leaving certain terms blank, such as the amount/percent of royalty that will be paid and the length/term of the contract in years that it is initially in force. Having a proposal on-hand gives an inventor the readiness to negotiate terms, should a presentation meeting reach that stage of interest by a buyer.

Terms and Conditions

An inventor may wish to set the term that a License Agreement is in force with a manufacturer (length of time) for only one or two years, with an option for renewal at the end of the term. This way, renewal depends upon the initial sales performance of the licensee. An inventor might also wish to include the condition of minimum sales that are accomplished per contract year by the manufacturer/licensee.

It might also be a good idea to include a clause in the contract that gives both inventor/licensor and the licensee the right to terminate the license agreement. This offers both parties a protective clause in the event for example that the licensee fails to pay royalties at the set contractual time periods or for other legitimate reasons. A licensee might also respectfully terminate a License Agreement in the event they feel they would be unable to fulfill their obligations, so that the inventor/licensor can pursue better options.

Requiring Timely Payments

The royalty-payment conditions can require royalties, to be calculated and paid, quarterly (4 times a year) or monthly, etc., and should the licensee become past-due in making royalty payments (by 10, 15 or 30 days, etc.); the licensor has the option to terminate the contract in writing – such as with a 15 or 30 day notice.

Inventors should take their time in pursuing License agreements carefully. Being in too much of a hurry to license an invention, can result in bad decisions when entering into contracts that are binding and that must run their full terms unless terminated due to violations of terms. It is in an inventor’s best interest to fully consider his options when entering into a License agreement and to do so with the help of an attorney if necessary.

success

Starting Small Businesses: Professional Success Steps

Many people choose to start a small business from a former hobby in hopes of earning profit. While many entrepreneurs succeed in their endeavors each year, a handful of people are left scrambling to keep up from day one, unable to get ahead.

What distinguishes between those who succeed and those who fail lies within their managing skills. Learning and perfecting these aspects of small business ownership will help in becoming one of those who succeed.

Organization

One of the most important aspects of a successful small business, organization can be the life or death of a dream. If a business owner cannot keep track of his invoices from orders, how will he be able to track profit and loss properly? Organization of important documents is the first aspect that must be mastered.

For example, failure to track tax information can result in an IRS audit and a lot of hassle. Professional and successful small business owners usually have an organized office where they can find everything filed under appropriate categories. Purchasing a filing system is a must for small businesses, since it helps to keep organization swift and easy.

Professionalism

Treating the business as a professional affair goes a long way in small business success. Since many people choose to turn their hobby into a business, this step up in professionalism puts the business one up on competitors. Those who continue to treat their business as a hobby will find themselves left with ship-shod work, offices and manners.

Approach the business like a job instead of a hobby to ensure success. This includes creating separate office and work areas as well as ordering business cards to alert others the service or product will be handled in a professional manner. People are more willing to do business with someone who designates themselves in this way rather than with the one who ‘does this little thing on the side’.

Perseverance

Small businesses usually take a while to get running. Sometimes the legal and financial hassle of starting one is enough for some to lose sight of the dream. Do not let the technicalities blind the passion for starting the business in the first place. Keep a mission statement or vision for the business in view at all times. Consistently think of new ideas or unique products that the company can provide. This will lead to success, because determination beats all other odds.

Conclusion

Starting a small business is exciting and can be rewarding, both financially and emotionally, if one employs the proper skills for success. Organization and professionalism are key components of a successful start-up. But the quality of perseverance is unprecedented in small business success stories.

Holiday Gifts for Entrepreneurs: For The Business Owner in Your Life

The following is a guest post from Avky Inc co-founders Kyle Uchitel and Aleksandr Vasser of Phoenix, Arizona.

For those with a loved one that happens to also be an entrepreneur, finding suitable holiday gift ideas can be a challenge. What do you get someone who wants to increase profits and productivity, decrease costs, and enhance their customers’ experiences? Something from this holiday gift list, of course.

Holiday Gift Idea for Entrepreneurs #1: Wireless Headset

There are few people who talk on the phone more than an entrepreneur. A wireless headset lets them multi-task even more than before without being tethered to their phone or computer. If you can find a headset that also looks good on their noggin during a teleconference, you’ll have found a holiday gift to be gushed about for years to come.

Holiday Gift Idea for Entrepreneurs #2: Fireproof Safe

If you are buying this holiday gift for your spouse or partner, you may want to use one of the other gift ideas instead, as a fireproof safe is more of a practical gift than a romantic one. However, if saving money is something that really excites your loved one, this holiday gift may be the perfect choice as not only will it keep their business’ valuables safe, but it will also reduce their insurance costs.

Holiday Gift Idea for Entrepreneurs #3: Magazine Subscription

Magazines.com offers a large selection of magazines for every hobby or interest, including entrepreneurs. Three magazine subscriptions for a year are only $30 USD (in the US only) and are a great way to extend a holiday gift throughout the entire year. Alternatively, you could try sending them a magazine from one of these Free Business Magazines.

Holiday Gift Idea for Entrepreneurs #4: A Retreat for the Senses

Your loved one works hard. Why not pamper them for a day and let them know how much you appreciate their efforts? There are two ways to go about giving this kind of holiday gift: either make your own “gift certificate” for a day of solace (including hot chocolate or a glass of wine, a bubble bath, massage, candlelit dinner and so forth), or purchase a gift certificate from a company like SpaFinders.com, which offers spa packages ranging from $25 and up for retreats all over the world.

Holiday Gift Idea for Entrepreneurs #5: Membership in a Business Group

Most entrepreneurs already belong to and pay dues for associations and memberships that relate to their business entity, such as the Better Business Bureau, Chamber of Commerce or specialty associations. Take a look around and see if there are other groups locally that they may want to either participate in or belong to – like a networking group, Toastmasters or the Guerilla Marketing Association, or even a business conference they may want to attend.

Making Assumptions In Real Estate

Making assumptions during a Real Estate transaction can be a costly mistake. Each year in North America hundreds of people assume that the property they are buying is all right. These same people proceed to purchase a home without taking the proper due diligence.

Problems such as wiring, plumbing, insulation and other mechanical features of the home begin failing and then the buyer doesn’t know were to turn.

Your first step in this instance is to seek legal advice from a professional. If your agent did their job then you should have a contract that protects you from many of these unforeseen issues.

However if you waived a home inspection, and failed to warranty the mechanical items in the home then you could have some very costly repairs on your hands. The furnace and air conditioning units are costly items to replace. An unseen leak in an oil tank can mean expensive environmental clean up.

In rural properties it is possible to find that your well has water that is not safe to drink, or that you need to truck water in because the well has inadequate flow.

If you failed to safe guard yourself in the agreement of purchase and sale you will be fighting an uphill battle if you choose to seek compensation. The courts will look more favourably on the vendor in these instances and you will be out of pocket for the repairs. This is unless you can prove that the vendor attempted to hide the issues from you, or failed to disclose problems with the home.

Before you make the decision to buy a home, make a checklist of areas to inspect. Specific areas such as, the roof, chimney, foundation, electrical, plumbing and insulation. Each of these areas of a home can unearth some of the homes history and will help uncover the overall state of repair for the home.

Real Estate Investment Planning: Mapping The Road To Wealth

Whether investors own one-family rental homes or multi-unit store, office, and apartment complexes, they are operating a business. Most business experts, including the Small Business Administration (SBA), emphasize that a business plan is an essential prerequisite to the launching of any type of business. For real estate investors, the investment plan functions as their business plan.

Write a Real Estate Investment Plan

Having financial goals in writing makes real estate investing more concrete and attainable and less pie-in-the-sky. This is because organizing the relevant facts and figures helps tame the fear and reckless risk-taking that defeat individuals who fail to prepare.

To create a real estate investment plan:

  1. Establish personal financial goals, such as desired net worth, the amount needed for a comfortable retirement, and the amount to bequeath to loved ones.
  2. Set a schedule for achieving those goals, such as five years, ten years, or retirement age.
  3. Calculate various ways to achieve those goals – including different down-payment amounts to offer and the corresponding amounts to finance through mortgages, and making research-based estimates of the operating expenses of the properties and the rents needed to cover the expenses; this results in target cash flow amounts.
  4. Understand the types and quantities of property to seek based on those calculations.
  5. Determine how and when to dispose of the properties.

Tax professionals can suggest strategies for reaching financial goals and minimizing taxes. Investors will get more out of those consultations if they know in advance their net worth goals and cash flow needs.

Cash Flow Projection

A good real estate investment plan hinges on the determination of whether an investor wants to take out cash regularly from a property. How much cash is used to buy a property and how the debt and operating expenses are managed after the purchase affect the cash flow. The larger the down payment on a property, the smaller the mortgage payments will be and, by extention, less of the monthly rent will be devoted to the mortgage paydown.

The cash flow calculation will differ if an investor will not need to draw money from a property and instead wants to see both a good return on the initial cash outlay — the down payment — and growth in equity. In such a case, the investor may want to make a small down payment and finance as much of the purchase price as possible. This often means a small cash flow amount, which can be applied to paying down the principle on the mortgage loan. At the same time, the equity in the property will be growing because of the debt paydown, inflation, and appreciation.

Develop an Exit Strategy for Maximum Wealth Protection

The SBA advises small business owners to plan their exits from their businesses. The SBA notes that an exit involves several steps and can take several years, depending on the size of the business and the reasons for leaving it.

Similarly, real estate investors must decide when and how to dispose of properties in their portfolios, all in keeping with their investment goals. Outright sales, taking back mortgages, and 1031 property exchanges under the U.S. tax laws are some of the disposal methods, and each method triggers its own tax consequences.

The form of ownership in which property is held also must be considered. State laws have specific requirements for the dissolution of partnerships and corporations, and the appropriate tax returns must be filed. These procedures usually require sound guidance from attorneys and tax professionals.

Obtaining A Real Estate License To Save Thousands

Real estate agents have a lock on the real estate market, but have you ever wondered what it takes to become one? The answer might surprise you.

Becoming a Real Agent is Fast and Easy

You can become a real estate agent in two months. By taking a few evening classes, buying a book, and then taking a test. you can become a licensed agent. Once you pass the test you only need to spend some time with a current real estate agent. This can be completed by simply speaking with your local real estate agent, who sold you your home, who is a friend of the family, etc. Once you obtain your license, expect to save 3.5% on your future real estate transactions.

The Benefits of Obtaining a Real Estate License

You get a much better understanding of the real estate process. This is a great crash course in real estate. Most importantly, you learn a ton about how the transaction is processed and executed. This understanding can help you be a better customer when you choose to use an agent in the future. It will also speed up your real estate deals tremendously.

You also obtain the ability to command 3.5% of every real estate transaction you are involved in. Instead of for sale by owner, you can list your property on the MLS (the Holy Grail of listing services) and you can act as your own agent. Typically only licensed agents have access to the MLS database. This is very powerful. Normal for sale by owner properties are not listed on the MLS and those owners do not get a commission split. Additionally, since most do not offer any broker commissions, most brokers choose not to show these houses. These are a few reasons why for sale by owner houses typically sale for less and spend more time on the market.

Finally, the biggest benefit occurs when you buy houses. Instead of paying full price, you get a 3.5% discount because that is your broker fee. Imagine buying four to five houses in your life time and saving 3.5% on every house. This could add up to tens of thousands of dollars in savings. Additionally, if you ever want to become an investor, having a license adds profit to your bottom line. You also get much greater sourcing of properties. Besides access to the MLS, you can simply walk into most banks and ask for their foreclosure list. This saves you the time of going down to a courthouse or going through another agent, whom you have to indirectly pay 3.5%.

Becoming a real estate agent is very cost effective. In addition to the great real estate knowledge you gain by going through the process, there are significant savings to be gained by acting as your own broker. Taking two months out of your life now could save you thousands of dollars in the future.

Avoid Capital Gains Tax on Real Estate Sales

Paying taxes can make it harder to grow investments, especially when they will be subject to taxation down the road. That is why it is important to know that for every investment there is a way to defer or avoid taxes.

Real estate investors do this through their losses on depreciation, which never actually come out of their pockets, but can show a loss where a profit was actually made.

For investors who want to sell a property that has gone up in value, the best way to defer taxes, perhaps infinitely, would be to take the profits from the sale and engage in what Robert Kiyosaki, best-selling author of Rich Dad, Poor Dad, calls a 1031 exchange.

What is a 1031 Exchange?

A 1031 exchange (also called as a like-kind exchange) is an event that takes place in real estate where a property owner sells a piece of land, a house, or a building, and uses all of the equity to purchase a larger piece of property of the same kind.

Since the gains that were made are being used to buy a bigger investment, all taxes are deferred until a sale is made that does not involve this transaction.

The term “1031 exchange” is used in common language because it is in section 1031 of the Internal Revenue Code that this idea is explained.

It is there that it states that gains taxes will be deferred on properties of the same kind if they are being used in a productive manner, such as a business or investment. This rule does not apply to stocks and bonds.

Important 1031 Rules

Investors have to understand that this kind of deal is not hard, but it does involve a few complications that cannot be avoided:

  • Two key deadlines
  • Placement of equity
  • Use of an intermediary

The deadlines that must be noted by someone attempting to make this kind of deal are 45 and 180 days after the sale of the property that brings in the proceeds for the new purchase.

The 45 calendar-day deadline is when buyers must identify the new property that they want to acquire. If this deadline is missed, the tax deferral is off. After 180 days, the identified property must be bought. These deadlines are concrete, and can fall on a holiday.

The last key to completing a 1031 exchange is using a Qualified Intermediary, also called a QI. The QI must be a person that is an unbiased third party, leaving relatives and business partners out of the loop. The QI will be the one actually securing the purchasing and selling of properties, making sure that it all goes to plan. Rates for such services can be as high as $2,000.

Investors must make sure that their QI is bonded and insured just as they ensure their electrician and plumber are licensed and insured.

Once all of the pieces are in place, real estate investors can turn small rental homes into larger pieces of property without having to pay the taxes on the gains that were made in the sale by growing their portfolios as they expand from duplexes to quadplexes to apartment buildings, or moving from owning a small cabin to a motel to a hotel.

When the original owner passes on, the property can still operate and earn money for the new owner who will never have to pay taxes on the gains until it is sold, if it ever is.