Uploaded: Wednesday, October 20, 2010

What's the best investment a business can make? Saving a buck, surely. Every dollar you cut in costs drops straight to the bottom line and relieves you of generating the revenue required to create that dollar of profit-which is often a high multiple of a company's net income.

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Uploaded: Wednesday, October 20, 2010

By Chris Atchison

If you're doing business in the U.S., prepare to hear from state governments. They're getting desperate for money, and you just might owe them some.

At a recent early-morning roundtable discussion for exporters held in downtown Toronto, the conversation was as muted as you'd expect among a group of unacquainted businesspeople still waiting for the day's first java jolt. That was until one business owner revealed he'd recently been contacted out of the blue by the tax departments of several U.S. states, and asked if anyone else had experienced the same. Suddenly, the room buzzed to life, with about half the attendees citing similar experiences.

Coincidence? Not according to one U.S. tax specialist, who spoke to PROFIT on condition of anonymity. He has seen a significant increase in cross-border inquiries by state tax departments as governments try to make up for recession-induced revenue shortfalls. The same accountant says there's a high degree of tax non-compliance among Canadian firms doing business in the U.S., often because they have no clue they owe any tax. The lesson for entrepreneurs doing business stateside: prepare for a call from U.S. taxmen- and have your chequebook ready.

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Uploaded: Wednesday, October 20, 2010

By Kara Aaserud

When outsiders buy into your business, life does not necessarily change for the better. Make sure it does by setting - and following - the right terms for your deal.

Harry Coleman is undoubtedly blessed. As one of the investors in Surrey, B.C.-based Disc Go Technologies Inc. (Disc-Go-Tech), he has watched the company's annual revenue quadruple and break the $5-million mark, profitably - an accomplishment that shareholders in most young, private companies pray for but never receive.

Then there's Mark Chaplin, founder, president and CEO of Disc-Go-Tech, which manufactures DVD- and CD-repair products used by pawnshops and video-rental chains such as Blockbuster and Movie Gallery. Although today Chaplin enjoys an ethereal existence relative to the average business owner, the stairway he climbed to heaven sometimes had seemed like the highway to hell.

When Chaplin began commercializing his disc-repair technology in 1996, he started the way most entrepreneurs do - by emptying his bank account and asking friends and family for financing. He raised $50,000, but needed thousands more to lift his company off the ground. "Neither myself nor my partner had any credit or assets, so the banks wouldn't look at us, and venture capitalists weren't interested unless we were looking at $1 million to $5 million," says Chaplin.

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Uploaded: Wednesday, October 20, 2010

By Kara Aaserud

A startup entrepreneur's guide to key sources of capital.

GUARANTEED LOANS

Loans from traditional banks offer lower interest rates than other sorts of debt financing. Sadly, there's a catch: the banks are reluctant to fund ventures that lack significant collateral and a profitable track record. But don't let that stop you. You can improve your odds of securing a loan by leveraging the Canada Small Business Financing program when you visit a banker. Offered through Industry Canada, it guarantees 85% of the value of bank loans, up to $250,000. (For details, visit strategis.ic.gc.ca/csbf.) Most startups are eligible, provided their expected revenue won't top $5 million in the fiscal year in which they're applying.

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Uploaded: Wednesday, October 20, 2010

By Kara Aaserud

How a Canadian entrepreneur is helping African bankers help themselves by lending to more women entrepreneurs. When the Royal Bank of Canada approved Joanne Thomas Yaccato's startup loan in 1993, she was more than pleasantly surprised-she was stunned. "I assumed banks discriminated against women," she says. "I fully expected to run into a headwind." But her joy turned to disillusionment the instant she thanked the bank's credit-risk manager for the approval.

"He said, 'No problem. That's quite a nice little hobby you've got going for yourself'," recalls Thomas Yaccato. "Had I been a man, I don't think for a second the word 'hobby' would have left his lips."

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