Your team will no doubt benefit from the POW3R process, but you don't need to hear this from us. Instead, listen to what our clients have to say! Here are three things POW3R can do for your organization or company, with comments from industry and sector leaders on how their experience helped move them forward.
1. Engage, motivate and instill a sense of ownership within your team
"The process used by Wendy Drake was instrumental in creating a sense of ownership by the team; she engaged our staff in such a way that they feel the strategic plan belongs to them." - Dr. Ivan Joseph, Director of Ryerson Athletics and Recreation, Ryerson University
"Our operations management, senior management and Board of Directors were all involved in the planning process, and our strategic plan is relevant to the different levels of the organization." - Shawn McCarville, President, Slemon Park Corporation
"The Atlantic Chamber of Commerce Board is comprised of representatives from across Atlantic Canada and provincial perceptions can be different, but MRSB understood our dynamics and appropriately engaged all directors and staff members." - Valerie Roy, Chief Executive Officer, Atlantic Chamber of Commerce Inc.
2. Give you a clear focus on your business, its challenges and opportunities
"MRSB offered us an impartial perspective and a skilled facilitation process to enable us to clearly focus on our goals and priorities." - Shawn McCarvill, President, Slemon Park Corporation
"...allowed us to revisit and reaffirm our vision, mission statement, core values and strategic goals." - Dr. Brian McMillan, President, Holland College
"You have an excellent ability to read people, to secure the 'facts' while pulling all the weeds out, to establish yourself as the leader of time and process, yet be extremely caring and considerate of people's needs. You have an absolute gift of getting so much captured...using an organized mind and process of your own." - Mary Dempster, COO, Ambassatours Gray Line
3. Provide a ready-to-action strategic plan and roadmap
"With MRSB's assistance, we now have a clear and concise strategic plan and a realistic implementation plan that will help us achieve our goals." - Shawn McCarville, President, Slemon Park Corporation
"The final document provided an outstanding framework for moving forward." - Dr. Brian McMillan, President, Holland College
"The final strategic plan looks good, contains rich content and defines clear, realistic goals." - Valerie Roy, Chief Executive Officer, Atlantic Chamber of Commerce Inc.
"What we were able to accomplish with your guidance has saved both me and the company months and months of work...you have helped to set me up to succeed." - Mary Dempster, COO, Ambassatours Gray Line
"I found the entire process to be insightful and impactful, leaving our team with a set of goals that will challenge our team in a productive way. I'm confident that by following this plan, our organization will enhance its presence in the larger sports community and help us to realize greater success." - Bryan Crawford, Interim Executive Director, Ontario University Athletics (OUA)
So there you have it, straight from our clients' perspectives, how POW3R has engaged entire teams, taken a close look at where they are now, set realistic goals and implemented strong plans of action. Email me today to find out how POW3R can do the same for your business or organization.
MRSB partner Everett Roche, CPA, CA with some actions you can take now to set your business up for success in 2016
With 2015 over halfway through, it's a good time to reflect on how far you've come already and on what you see the rest of the year holding for your business. We know, you're busy, but as owner you should never be too busy to slow the train down - just for a bit - and consider how you can focus on the most crucial parts of your business to make things even better next year.
Think about your strategic goals
You might have taken the time for strategic planning when you first started your business, or even a couple years back. If you want to make sure you consistently live up to the ideals and goals that made you starry-eyed when you started out, and that these have evolved to reflect your current growth, strategic planning should be part of your annual process. Wendy Drake, who provides POW3R strategic planning to a wealth of businesses and organizations, explains that "today's strategic plan should be more than just a document that outlines a set of goals, then sits on a shelf. Your plan should take into account the real-life strengths and challenges faced by your business, involve all stakeholders and take a collaborative approach in seeing your goals through to action."
Clean up any loose ends
This might include liabilities that are affecting the long-term value of your business, or simply unresolved issues that are taking up too much of your time and mental space. Do you have multiple sources of debt that can be consolidated? A lingering lawsuit that could be resolved faster? Maybe you've been meaning to secure a patent on a new technology that might bring you some future profit. Whatever the shadow in the corner is, look it in the face now and get it dealt with, for good.
Develop future leaders within your team
You understand better than most the hills you must climb to become an effective leader. Why not share that knowledge with those on your team who show real promise and a willingness to take on greater responsibility? This can be especially important in cases where one or two people act as the hub of all business for the company; there will come a time when this hurts your potential value, as allowing one person to 'be' the business sets up an untenable sitution for potential buyers. As advised by Lloyd Compton, partner with MRSB Valuation & Litigation Support, "Go on vacation and see if the business can survive or thrive in your absence." If the answer is no, start cultivating that rising star within your office so that, when it counts, he or she can truly shine.
Put a succession plan in place
Closely related to developing the future leaders within your organization is the importance of a succession plan. Much more formal, this allows you peace of mind in knowing that your business will survive through your own departure. As noted by Wayne Carew, principal with MRSB Mergers & Acquisitions, "even if you plan to leave your business to family, mapping out a thorough succession plan can provide security and make the eventual transition more a reality than a possibility." You will also reap benefits in the form of tax exemptions and a better purchase price if you plan in advance and fully understand the value of your business.
Celebrate your successes
While it may seem like a no-brainer, it's surprising how often we fail to actually acknowledge the weekly, monthly and annual achievements of individual staff and of teams as a whole. These acknowledgements don't need to eat into your precious after-work hours; grab some coffee and cookies on your way to the office and let the team know it's a thank you for their hard work this past week. Or take 30 minutes once a month to host a 'party' in your boardroom, featuring cake and a slap on the back. Most team members will look forward to it, and you'll probably even get some volunteers to do the grunt work (i.e. picking up treats) on your behalf.
Four months may not sound like much time, but it gives you a tight window within which to collaborate with those around you and set some attainable goals. Who knows, by this time next year you may have ticked all of the above items off your list!
MRSB accounting technician Bev MacLaren reminds readers of the importance of keeping those reciepts and records for when you'll need them - and you will need them
Have you heard of the Six Year Rule? The Canada Revenue Agency (CRA) requires you to keep copies of all business records and your personal income tax records for six years from the end of the last tax year they relate to. If you file your taxes late, it is six years from the date of filing. And the Six Year Rule is only a minimum; there are of course times when documents will need to be kept longer. You should refer to the CRA rules for specific circumstances.
Anyone who wants to destroy tax documents before the six year retention period must first complete form T137, Request for Destruction of Books and Records with CRA (yes, they have a form for that) and check with your province as each has its own form. What happens if you destroy records without gaining permission and get caught? According to CRA, you can be prosecuted for doing so.
Apart from tax forms, what should you keep in the way of receipts and documents, and for how long? You should hold on to personal records such as utility bills, property tax statements, bank statements, credit card statements and so forth for a year. Items like insurance policies, loan papers and contracts should be kept for the term of the document. You should never destroy birth certificates or wills. I recently learned myself that, if you purchase an item with a lifetime warranty, it is best to keep the receipt!
Keep your records organized and in a cool, dry place. A plastic tote is a good investment to keep out dampness and critters. If your documents have been destroyed in a disaster you should call the CRA; they have a telephone number just for this situation, which shows you just how important it is to keep documents safe.
For more details see the CRA website: http://www.cra-arc.gc.ca/tx/bsnss/tpcs/kprc/rtntnl-eng.html
MRSB partner Lloyd Compton, CPA, CA, CBV explains what you can do to make sure your business is ready for sale in 2, 5 or even 10 years and how valuing your business NOW can help you increase the proceeds from its sale down the road.
I believe a business valuation is as important for a business owner as your bookkeeping and financial statements. Just as you watch gross margins and monthly income statements to identify problems that will impact your profit, understanding your business value can help you manage this value and will also influence how much of it you get to keep following a sale. For most owners, there may be specific actions you can take that will increase value. Take the example of selling a house: a little elbow grease will not only make it more attractive to potential buyers, but you also get a nicer house to live in until it sells.
Business valuation is not a math exercise where entering the right combination of numbers and figures will result in the correct answer. Each business has its own strengths and weaknesses relative to other businesses. Each of these strengths and weaknesses affect the inherent risk of your company, compared to other companies or compared to other investment alternatives for a potential buyer. The components of company-specific risk can either be detractors of value or drivers of value. So how do you look at your company now with a view to influencing what it will be worth later on?
Take stock of what you have, and what you have but don't need
Take a good hard look at what your existing assets are and ask whether they directly contribute to the income of the business. You may be able to remove or sell certain assets such as excess land or redundant equipment without affecting the income earning ability of the business. Similarly, do you have any intellectual property or promising technology that you need to secure the rights to?
Now look at your liabilities. You may be able to improve the future cash flows of the business by consolidating debt and locking in lower interest rates, even if there is a penalty for early debt retirement. What about unresolved lawsuits? It may be worth it to settle these or bring them to a head prior to listing. Uncertainty is risk and risk will affect your business value. In a nutshell, tidy up your balance sheet. Like most things in the world, simpler is better.
Get reacquainted with your industry and your competition
You undoubtedly have a very good grasp on your business, your industry and your market. However, we all become complacent over time. You may not view your business, industry outlook or your company's position in the market in the same way you might if you were a prospective buyer. Is the industry a stable one? Is the market declining, mature or growing? How much competition is there and what are your company's strengths and weaknesses versus the competition? What changes are taking place, such as globalization or technology advances, and are you keeping up? How are your relationships with your customers, suppliers and bankers?
As business owners, we tend to focus more on our strengths or our 'value proposition'. But focusing on our weaknesses gives us something to work on, where we can take actions that will positively affect our value down the road, and gives us a better company in the interim. Buyers want businesses with stable earnings but will pay a premium for companies with stable earnings and growth opportunities. For many buyers, the growth opportunity is more important than stability of earnings.
Find new sources of revenue and minimize expenses
For several years leading up to your exit, you should look for ways to steadily increase revenue and reduce unnecessary expenses. Admittedly, this is an incredibly obvious statement. However, paying special attention to recurring sources of revenue will increase your value. Buyers will pay more for annuity revenues than for sales that they will have to work to generate themselves.
No one likes to pay tax. Some owners like to run every possible expense through the business to save corporate income tax. Most common are wages to family members in excess of the true market value of the service that they provide for the business. While this may be a means of employing someone and saving tax, it can be a fly in the ointment when it comes time to value the business or sell. While this can be adjusted for in a valuation exercise, keeping the income statement 'clean' removes any doubt on the part of a buyer and eliminates one major item that needs to be explained, justified and negotiated.
Let your employees shine
If you find that you or one of your co-owners tends to be the beacon to which all business flocks, this is a problem from a value perspective. Allowing one person to 'be' the business can set up an untenable situation for future sale. Consider training other staff to do what you do so that operations will look just as attractive to potential buyers, with or without its current shining star. Go on vacation and see if the business can survive or thrive in your absence. A strategic plan can also be an excellent way of coming together as a team to discuss and set future goals for the business and how individuals within the business can take on added responsibility in implementing change.
Perhaps the main message in all of this is that, by understanding the factors that impact the value of a business, and by looking at your business now as a buyer might, you will be able to make improvements well in advance of negotiations for a sale. As an added bonus, just like a nicer house to live in, you will enjoy a stronger, healthier business until it sells.