myRetailer.ca

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As we prep our (Canadian) businesses for what the new HST (Harmonized Sales Tax) means for us, there’s lots of debate about how businesses will fare, adapt and implement the change to their systems, processes and financials.

I’m interested in your opinion.

Add your comments below – I’d like to know your point of view – as a consumer, business owner, politician, or anyone interested in the debate.

Links:

• HST – Frequestly Asked Questions (via CBC News)
• Better Practice Guide for Management of the HST (via Revenue Canada Agency) (.pdf)

Plus three marketing tips for short-term and long-term planners

According to the Enterprise Council on Small Business, 45% of small business owners consider their focus to be short-term rather than long-term. 50% also considered short-term planning to be between one and three months.

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Meet your performance sales targets by planning and reviewing your financial budgets

I always fill out two sets of projections: budgets and targets. Budgets go to the bank. They are the bare minimum level of performance that we commit to each year, and what our profit sharing program is based on. If budgets are met, profit sharing is paid out at the bottom tiers. Targets are what we shoot for and what our sales bonus program is based on. Targets often have more aggressive sales projections, higher gross margins on products sold, and slightly lower wage costs. When we review financials monthly and quarterly, we compare ourselves to targets.

For me, budgeting is an involved process, but it  follows five basic steps.

1. Start with a blank profit & loss. First thing I recommend is start at the bottom. Given your financial performance history and the needs of your business commitments, start with where you need your profits to be. Fill in your bottom line.
2. Next, plug in all your fixed expenses (power, rent, property taxes, bank charges, insurance, telephone, etc.), adjusting to reflect changes to rates, negotiated costs, etc.
3. Next, fill in your semi-controllable expenses (wages, marketing, etc.). For this, I normally get my managing partners involved as they are accountable for maintaining their budgets and hitting their numbers.
4. We then look at top line sales and cost of good. Again, this is a group effort between our buyers, our accountant, our managing partners and myself.
5. As a group, we’ll then have everything outlined on spreadsheets and we review it line by line in minute detail, over and over again, questioning everything and massaging it as needed until we come up with a final budget and target.

So what do we do with them afterwards? Budgets are what go to the bank. Our budgets are the bare minimum level of performance that we are committing to each year. Our budgets are what our profit sharing program is based on. If budgets are met, then profit sharing is paid out at the bottom tiers.

Targets on the other hand are what our sales bonus program is based on. Also, if targets are met, then our profit sharing program will pay out at the top tier levels. Our targets are what we enter into our accounting systems. This way when we review financials each month and quarter, we always compare ourselves to targets, not budgets. This encourages us to always shoot for better performance.

Plan for the new year and plan to hit the bulls-eye.