The Mindset for Business Success or Failure

Why Businesses Fail

It’s a fact of business that businesses fail because of a lack of funding and investment, and a lack of skills and knowledge about your chosen industry.

Bloomberg state that a huge 80%, 8 out of 10 businesses fail as part of a general statistic, attributing failure to simply running out of cash. Surely given this huge statistic of business failure why do businesses keep on failing at such a high rate, and what can we do about it?

A vital area that many people fail to recognize, often when they become absorbed in their businesses. By the very nature of business it can be all-consuming and distract you from identifying some disparities with a profitable business success formula.

Between 80-90% of business owners don’t recognize the correlation or the relationship between two belief systems.

These belief systems consist of knowledge of themselves on a subconscious level, and knowledge of the fundamental areas in business. When these two belief systems work to compliment each other we become solution orientated and strive to achieve positive outcomes. Our motivations and goals are in equal alignment and work together harmoniously towards the goal of business success and profitability.

When these belief systems are in alignment success starts to happen and quite often it can be rapid. Business however is rarely smooth and business owners face daily challenges that can make us doubt the belief in ourselves, or our business intentions.

Situations can arise that can induce doubt or a lack of confidence. Different situation affect people in different ways, but confidence issues can cause a misalignment, even friction with these belief systems causing many people to question themselves and to question, perhaps even quit those intentions of achieving success regardless of how close they were to it, simply because those doubts have been left unmanaged and subconsciously they don’t see the potential in themselves.

A common challenge people face when developing an Internet business is information overload, raising doubt over their abilities to learn technical skills and apply Internet Marketing techniques, or dealing with the nay-sayers and negative people who enjoy casting doubt on your enthusiastic business plans.

If you allow these doubts to creep in and destabilize your knowledge and belief, alignment failure will be the result if left unchecked.

How To Succeed In Business

To succeed in business simply understand why businesses fail…

Success in business, hasn’t really got anything to do with business. Of course researching your market and supplying a solution to a specific problem, are the foundations of a potential business, but that’s not really business, that’s common sense!

… and common sense isn’t that common…

Success, has everything to do with being a successful person, and developing the success traits that you can adopt into any area of your life.

How many people do you know that have always earned the same level of income, or always had the same lifestyle? What about that person that’s always short of money (we all know them!).

And of course there are the stories of the bankrupt millionaire who made his money back from scratch within two years.

Businesses don’t really fail – people do…

The way you succeed in business, is to succeed in yourself. Develop your mindset into an unshakable system that won’t be effected by negative influences or daily challenges.

So how can you do this..?

Your mind is directly effected by the information you put into it, just like a computer. The trouble is we don’t realise what information is being put into it, until you start consciously taking control of the information.

Information such as books audio’s, video and the people you associate with has a big influence.

If you spend your downtime working on yourself with personal development training, the time you spend in your business will be more productive and your belief systems and knowledge will be in alignment for you to profit and succeed in your business.

I appreciate many people are busy, so I produced an audio podcast entitled Developing The Mind of a Champion designed for you to understand this process for yourself, how to recognise your own behaviour patterns thoughts and actions based upon your own belief system and how you can change your belief system by re-programming your mind. This Podcast is available on my website.

Have You Ever Thought of Owning Your Own Business?

Have you ever thought of owning your own business? Most get discouraged just thinking about it. Will you be able to do this? If you fall under the category of dreamers then you think it will be easy. The truth is somewhere in the middle. I for one wanted to own my own business because I thought I had a great idea and a product that could help people. What more if we can offer outstanding customer service and great rates for it, it would be something that could benefit everyone. Now, let’s uncover the myth’s of owning your own business…

I get to be my own boss and I don’t have to listen to anyone.

While you do get to be your own boss there are times when you do have to listen to people.. your customers. Your customers ultimately are a major deciding factor of what your business will be like, when and how.

I get to do whatever I want.

Usually business people adhere to a certain code of ethics. Often there is a code of ethics that exists in your line of business (i.e. lawyers, paralegals or in medicinal fields). So while you can decide how you run your business you can not exactly do what you want if it entails harming others or conducting bad business as it will hurt the your business as a whole. Moreover, you can end up with many lawsuits on your hands and your name all over scammer reports on the web.

People that own businesses hardly have to work.

Contrary to the old fable that owning your own business is no work at all, it is actually more work at first, than pay. The rewards are limitless though. Of course, you build a team and work in the right direction and as a tree grows so will your business.

I can get funded and begin a business

Unless you are already friends with some pretty good investors, funding might have to come out of your own pocket initially. Investors want to see that you can do it first and then they will also put money into your cause. For the most part, banks will want a up front collateral to lend you anything, unless you have been in business for two years, as a standard. Furthermore, if you borrow money at the beginning and have no customers, no money coming in to the business and no cash saved how will you pay your lenders. This is another reason the majority of business owners go out of business before the second year. Plan ahead start off small and build, that way you can still work and begin blossoming your business and not be in a debt crisis. Also, get a marketing plan and business plan first. Why? Because this will reveal to you the answers necessary for your success, such as: Is there a growing need for this product/service/business/idea? Will there be a need for this in the future? Who will I market this product/service/business to? Where? Smart business owners think of an idea and get a business plan before they go into business that way if the numbers don’t look good for them, they saved a lot of time, money and heartache as they move on to the next idea.

Social Media networking is not for business

Wrong. It’s gotten to the point that most businesses are in almost every social network, whether advertising or not they at least have an account that they post to regularly. In fact, customers expect to see the “follow me on Facebook” or Twitter logo at the bottom of the page. Since many people do NOT like advertising through social media this is where you can be creative and outgoing and talk to your customers on a more personal and down to earth level; this is where you are in the customers playing field, and they know it so it also makes it easier for them to talk to you.

Many people who go into business do not go into business with a realization of what it’s actually like to own a business. Talk to other business owners and take them on as your mentors.

There is no cookie cutter idea. If there is a business that has a model built chances are if you follow in their footsteps you will not be as successful as they were; it’s kind of like a remake of a really good song, it’s never as good as the original.

Come up with some of your own original ideas to give your business your own personal twist. A good thought might be to talk to friends and family that support (notice the word support) your ideas and have some ideas, modifications, or good opinions to give you.

The road to success when owning your own business also leads to financial freedom. Since you own the business you choose your own schedule. With the exception of a few clients in which you may have to work around their schedule.

This article is a means of being prepared for your endeavor and journey ahead. There are many ways to prepare yourself. One of them is through education. Fear subsides with knowledge and is expelled with experience so… move forward. Until next time.

How to Setup a Business in Ontario, Canada?

How to setup a business in Ontario?

Setting up a business can be an overwhelming task with a lot to comprehend. It all starts with a dream and a vision, but how do you turn that dream into reality? The dream of becoming your own boss and having the freedom to make your own decisions can be a complicated one at the beginning. Once you have determined on the actual business and its inner workings, you will have to move on to the next step of executing that business. This is where a lot of people get stuck and don’t really know where to go next.

In this article I will explore and shed light on several different business structures available in Ontario. I will also explain how to be in compliance with Canada Revenue Agency (CRA) tax obligations.

The three most common structures are Sole proprietorship, Partnership, and Incorporation.

1. Sole proprietorship

Sole proprietorship, also known as a proprietorship or a sole business, is a type of business that is owned and operated by a single individual. Other individuals do not participate or own the business. This is the most simplest form of operating a business.

A sole proprietorship is simple to setup, you can operate the business under your personal name. If you desire to use an operating name you are able to register a Master Business License and operate under an operating name. The requirements for setting up a sole proprietorship are outlined in the provincial legislation.

The shortfall with a proprietorship is that the sole proprietor is personally liable for the business. There is no legal separation between the business and its owner. This creates unlimited liability from creditors and other business debts.

What are the setup cost?

The setup costs are relatively low. To Register a Master Business License online the government fee is $60. There are additional fees for name search and enhanced business name search.

How is a sole proprietorship taxed?

A proprietorship is not a separate legal entity and is taxed based on the proprietors personal income. A separate tax return is not required. The income or losses of the proprietorship will be taxed at the applicable marginal rate of the individual. If the business is profitable this may put you in a higher tax bracket.

There is no need to obtain a CRA business number for a sole proprietorship. However, in certain circumstances you will be required to register a HST number. If you have employees you will be required to register a payroll number. All of which can be done over the phone by calling the CRA business line.

The income and expenses from the sole proprietorship can be reported on your T1 Personal Income Tax return on the T2125 Statement of Business Activities form. You will be required to keep all your receipts for income tax purposes.

2. Partnership

Much like a sole proprietorship, a partnership is not a separate legal entity. A partnership arises from the legal relationship between two or more people that join forces to start a business. The partners do not have limited liability from creditors and personal assets could be seized. This has given arise to several different partnership structures, including General Partnerships, Limited Partnerships, and Limited Liability Partnerships; each of which has a different level of personal liability.

What is a General Partnership?

In a general partnership each partner is jointly and separately liable for the liabilities and obligations of the partnership. In this type of partnership, the partners do not have limited liability from creditors and personal assets could be at risk.

What is a Limited Partnership?

A limited partnership consists of a general and a limited partner. The limited partner has limited liability and only the initial investment is at risk to creditors. The general partner has unlimited liability.

What is a Limited Liability Partnership (LLP)?

A LLP is created under The Partnerships Act which allows certain professionals to practice under a LLP. The legislation states that the partner is not personally liable for any liabilities of the partnership that arise as a result of negligence by other partners of the LLP. The partners’ investment and the assets of the LLP can be at risk.

Do I need a partnership agreement?

Although a partnership agreement is not required by law, it’s a very good idea to have one in place. The partnership agreement would help avoid disputes among the partners in the future. The partnership agreement should include the following:

General governing rules regarding the partnership

How to add or remove partners

What happens in case of death of a partner

How to divide and distribute profits and losses

How is a partnership taxed?

A partnership is not a separate legal entity and does not file a separate tax return. The profits and losses flow directly to the partners, who report the income/losses on their personal tax return. A partnership could be required to file a T5013 Statement of Partnership Income depending on revenues and other criteria. A partnership calculates income and expenses in accordance with section 96(1) of the Income Tax Act which states that income and expenses have to be calculated at the partnership level.

A CRA business number for a partnership is not required. However, in certain circumstances you will be required to register a HST number. If you have employees you will be required to register a payroll number. All of which can be done over the phone by calling the CRA business line.

3. Corporation

A corporation is a separate legal entity which can be incorporated at the federal or provincial levels. A corporation is separate from its shareholders and must file a tax return annually regardless of the revenues it makes. A shareholder of the corporation is not liable for debts of the corporation. Although a corporation can be named in a lawsuit, the shareholders have limited liability to the capital contributed to the corporation.

What is a Federal (Canadian) incorporation?

Federal incorporation will allow you to operate and open branches all across Canada with the same name. The corporate name is recognized all over Canada. A Federal corporation is required to file a annual return every year as long as the corporation remains active. You will also have to register in the province you decide to operate in.

What is an Ontario (Provincial) incorporation?

Ontario or provincial incorporation will only allow you to have a branch in Ontario. If you decide to open a branch in another provide you will be required to incorporate there as well (the same name might not be available). With an Ontario corporation you are still able to sell your products across Canada.

How is a corporation taxed?

The income earned in the corporation is taxed at the corporate rate. The funds left over after paying taxes are considered retained earnings of the corporation. The retained earnings are distributed to the shareholders through dividends and are then taxed in the shareholders’ hands at their respective marginal tax rate.

The setup costs can range from $500 to $5,000 depending on the tax structure and legal advice needed.

When to file corporate taxes?

All corporations have to file a corporation tax (T2) return every tax year even if there is no tax payable. If you are a CCPC the payment is due 90 days after the corporate year end and filing is due 180 days from the year end.

CRA Business Number

The CRA will open a business number for your corporation. The CRA will request that one of the owners or directors provide a social insurance number and major business activity.

GST/HST Number

You will be required to open a HST number if your revenues are going to be above $30,000 or you plan on collecting HST on the goods or services you provide. You also have the option to voluntary register for a HST number from the beginning. It is critical that you review the CRA’s GST/HST Guide to stay in compliance of the regulations.

This CRA tool can determine if you Should register for a GST/HST account?

Payroll Number

You have to register for a payroll account before the first remittance due date. Your first remittance due date is the 15th day of the month following the month in which you began withholding deductions from your employee’s pay.

Conclusion

The type and size of business will often dictate the structure of the business. A lot of businesses start as a sole proprietorship (for the above reasons) and as they grow they will change into a corporation. There are tax provisions which can be used to roll over the business to a corporation tax free. Once this is done the CRA will have to be notified and everything can be changed over.