So you have some clients and you think you are on top of the world, which is great, but sometimes it doesn't work out and clients leave... and they will, you cannot satisfy everyone and people rely on revenues being 100% into the future. If you are not acquiring new clients, you are falling behind and client churn will eat your agency alive. Expect some clients will constantly be shopping around and you cannot hand hold all your clients and scale. This means that fancy new office you signed a lease on might be too expensive.
Can you accurately price a potential new client on a call? Do you know how much you are spending per month on salaries, office expenses, apps? Cash is royalty and you need to understand where every dollar is going so you can invest when needed and stop spending in certain areas.
Agency owners also like to forget about the CRA and what is due to them! When your invoicing your clients, there's that 13% HST that is NOT YOURS to spend and you are just holding it for the government. Always know your tax liabilities so you actually know how much money you can reinvest or take out without putting financial strain on the agency. Nothing is worse than being extremely tight for money.
Are you running an agency or are you a consultant? There is a huge difference in what you would charge and how you spend your time. Running an agency means you are selling marketing packages, being a consultant means you are billing for your hours. As a consultant you are limited to how much time you have, whereas an agency can have virtually limitless clients. If you are trying to start an agency and spending too much time on client work, you can't focus on new client acquisition, research & dev, keeping your staff happy, and other CEO related tasks.
An agency plan will keep you motivated and give you direction, this is key for benchmarking progress and determining where you need to focus your time. Without an agency plan, where are you going?
The creative process is changing, automation is rampant in virtually all departments of the modern agency. Not automating and ignoring changes in how businesses are functioning will cut your growth and you will not be around for long.
The type of business dictates what expenses would be included in the cost of goods sold/ cost of service category/ grouping of expense accounts. If the expense can be directly linked to the specific product, project, or activity, it's a direct expense and should be included in the COS group on the P&L.
If the expense is less correlated to the company's sales, it would be included in the operating expenses or other expense below the GROSS PROFIT calculation.
What is included in cost of sale or cost of goods group > direct expense?
An example, you own a company that produces widgets.
All the direct manufacturing, supplies, and selling expenses to get the product in hands of consumer is a direct expense.
All functions of a business can use AI
accounting, marketing, operations, HR, legal, admin, etc...
AI using team > team alone
Apps like ChatGPT are allowing for people to learn and work faster and faster.
You can start using CHAT GPT today.
WHO is the gross profit & who cares?
WHAT can you do with GP?
WHERE do you use GP numbers?
WHEN is it calcuated and used?
WHY people care about gross profit?
Not everyone, depends on factors such as size, goals, risk tolerance, and tax situation.
Tax advantage(s) and legal advantage(s).
Canada Revenue Agency: https://www.canada.ca/en/services/business/start.html
Silicone Valley Bank & Signature
Could not pay all withdrawals
Mostly US operating bank
Friday March 10th
Too many people trying to take out $$ at once.
The T1 is for all Canadian residents.
A Canadian tax form for individuals to fill out. Looks like this, trust me, it's not that complicated, and most fields probably don't even apply to your situation.
Tax filing & payment due to CRA, file online @ wealthsimple.com
Every year before end of April.
Because CRA collects money needed fund rest of the gov't.
The T1 General Income Tax and Benefit Return is a tax return form that individuals use to determine their annual tax liability and claim federal or provincial benefits, such as the GST/HST Credit.
The form summarizes the taxpayer's income, deductions, and tax payable, as computed on supporting forms and schedules, and calculates any refund or balance due.
The T1 form consists of five parts:
2) Total Income
3) Net Income
4) Taxable Income
5) Refund/ Balance owing
Online, In-person, mail, Tax professional
To ensure timely submission, the completed T1 form and any outstanding balances are due by April 30th of the following year (by June 15th for self-employed individuals or common-law partners). If these deadlines fall on a weekend or public holiday, the deadline is extended to the next business day.
Business owners need to build a company track & stay on it.
Key Performance Indicators are common statistics & ratios a company would keep track of.
Pulled from business & financial reports
Always be keeping track of KPIs and perform variance calculations.
Ensure mone is being made.
WHO needs to know?
ROI important metric for business decision makers.
WHAT is ROI?
Rerturn on marketing spend is how much profit is made from a given number of marketing cost.
WHERE can you collect this data?
Marketing ROI = SALES CHANGE/ MARKETING SPEND
WHEN should you look at Marketing ROI?
WHY pay attention to marketing ROI?
Determine what is most profitable for business.