10.01.2021
Taxation
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Successful business management starts on the first day of a company's existence. A company that is well organized from the onset increases its chances of success in the long term.

To do so, you should develop a business plan that goes beyond the financial aspect. You need to think about your overall business management before you start any operations.

Here are the most important factors in starting and managing a business to help you start yours off on the right foot.

Good business management starts with a good business strategy

The first step to starting your own company on the right foot is developing a solid business strategy. Your strategy will be the core of your company and will serve as a baseline for its growth and development.

Start by determining your values and your company's mission. This will serve as a starting point for developing your business strategy.

A good business strategy also takes into account the extent of your competition in your industry. Once you have determined which market you are entering, analyze the competition to identify what the best opportunities might be.

Take it even further by performing a SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis of your company and your main competitors. This will help you visualize your place in the market accurately and build the different aspects of your business strategy.

Manage procedures, processes and operating methods effectively

Business processes, procedures and operations are used to structure all of your company's operations. Each company must develop its own processes and procedures to better manage its operations.

Business processes

You first need to clearly name, describe and model your business processes so that everyone involved understands how they work.

For example, a B2B sales process might look like this:

  1. Process the order
  2. Gather the items ordered
  3. Prepare and ship the order
  4. Charge the client

Presenting your processes in the form of a value chain, flowchart, hierarchical list or tree structure helps your team better apply these processes.

Business procedures

If the process is the "What,” the procedure is the “Who” and “When.” The procedure is used to describe the tasks to be performed within a process.

To return to the previous example, a procedure in the order-taking step could be:

  1. Access the client's file
  2. Select the items that the customer wants to order
  3. Save the data and forward it to the warehouse
  4. Etc.

Operating methods

Finally, operating methods are used to describe the "How" of the processes and procedures. This description helps the person performing a task achieve the desired result.

To continue with the example used, the procedure to help a user access a client's file could describe how to access the software, how to search for the client's name in the software, etc.

Know how to manage your business finances

Knowing and understanding the financial statements of your incorporated business is essential to manage and operate it effectively.

When making your business plan, there are many things to consider to show investors and lenders that you can manage your finances well.

Budgeting expenses, a forecast of potential revenues and a realistic estimate of your cash flow are just a few examples of good financial management.

In the end, money is what keeps companies going. If you want to see your business grow, hiring corporate accountants can help you make sure that your finances are well managed.

The importance of corporate tax management

You need to understand your rights and your federal and provincial tax duties depending on your business structure. This is an important element of your business strategy.

If your business structure is a corporation, you will have a variety of tax responsibilities, such as:

Filling out your corporate tax returns (T2 tax return and CO-17 tax return)
Overseeing the compensation of shareholder-managers
Tax planning for your fiscal year-end
Etc.

However, understanding the full range of a company's tax responsibilities can be difficult for a new entrepreneur.

Using professional corporate tax services is always a good option to simplify this task. They can offer you personalized support to help you navigate and manage your corporate tax system efficiently.

Implement a sales and marketing strategy

Your company's revenues will be generated by your sales. You therefore need a marketing strategy to maximize your sales and revenue.

To properly understand the consumers and target audience for your products or services, you need to perform a market research. Analyzing consumer needs and identifying untapped markets will help you create a stronger product or service.

In addition, choosing this strategy reduces the risks to your business. If you choose to do the opposite and design your product before evaluating the market, you risk running up against competitors with the same idea.

Ensure a stable workforce with good human resources management

Start-up companies may have difficulty hiring stable staff in their first few years of operation. This may be explained by the fact that employers often only consider the financial aspect of hiring new staff.

However, employers need to understand the behaviour of their employees in order to offer them satisfactory working conditions. Employers should better understand what attracts candidates to improve their employee retention rate.

Assess your equipment and technology needs

Getting the right equipment and technology to run your business can be a challenge in itself. Knowing exactly what you will need before you even begin to operate your business is difficult.

It is therefore often recommended to lease business equipment that you plan to use when you start your business. This will reduce the risk of spending money on equipment that you will not end up using.

As your business grows, it will be important to re-evaluate your needs to see if your equipment and technologies are still relevant to your success. You will then be able to decide if it is worthwhile from a tax point of view to invest in new equipment.

T2inc: the key to getting your business off to a good start

There are a lot of different development aspects to consider to manage a business effectively.

Building a business plan and strategy is only the first step in business management. It takes a lot of time and energy to put in place the processes, finance, taxation, marketing and human resources to ensure overall effective management.

Do you want to deepen your knowledge in business start-up and management? At T2inc, our tax accountants offer several training courses to Quebec entrepreneurs to help you start, manage and grow your business.

Contact us to know more about our corporate services.

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