Home » Articles » Edmonton Business Consultant | Paying on Time Helps You Win
Edmonton Business Consultant | Paying on Time Helps You Win
Edmonton Business Consultant | Are You Excited For Top Consulting?
If it’s losing money, making it bigger, it’s going to make it lose more money. And if you avoid paying those people, you’re probably making the problem worse. You’re not actually making the problem better. Yeah, I can see why with the two I can be you and cause it’s not. Hi, thanks for joining us for another episode of asks for all CPA. Today is ed and a business consultant. We’re talking about how paying on time actually helps you win. So again, as the Edmonton business consultant, we’re talking about how paying on time actually helps you win at business. I have may here with me again. So Mi, how’d you first exam go for good CPA program was extremely tough. Yeah. But working while studying actually helped because it made me actually put the cases to an actual situation. So it helped me actually with my problem solving, which is great because you don’t get that. Yeah. On the job experience and the actual uh, terminology or the, the stuff that you’re actually learning when you actually put it together, it’s a lot easier. Yeah. But it was a tough one as a Business Consultant!
Cool. So when, how long after when write the exam do they tell you the mark? Um, in about a week or two weeks. Oh, okay. Cool. So the quote that we have here today, it’s Zig Ziglar quote, you know, we’re talking about paying on time and it says you can have everything in life that you want if you just given up on enough other people what they want. And the statistic that we have, you know, 50% of all Canadian small businesses go out of business in five years. 29% of these failed businesses we’ll list, we’re running out of cash is one of their primary reasons for failure making running out of cash. The second most common reason for business failure and the story that we have here is you know, business owners, they think that might delay or avoiding paying people is a necessary part of building a business. And so, you know, main, what are the questions that these business owners should be asking? Well the first one should be do business owners who are getting behind often not know their margins. Yeah. So a lot of business owners who are getting behind, they don’t know how much they’re making, either. They don’t know what their margins are, so they don’t know for every job that they do, their costs are x percentage and their gross profit is y percentage. Or for every person who walks through the restaurant door, you know, they make on average this and the food costs are that and they make an average of this. Um, you know, they just don’t know those margins. Um, and, and they really don’t know how to solve the problems because they don’t know what the margins are for Edmonton Business Consultant.
Are these entrepreneurs normally thinking growth when they should shrink first? Yeah, they’re thinking, we need more. I need more jobs. I need more work. I need to sell more products when it’s really getting them in the hole. Um, and, and so what they should probably should be thinking is about, let’s make it small. And the reason why they get a little bit smaller is now the business owner can do a larger percentage of that work and now they can start to afford to pay their bills. Uh, and then they can figure out their margin so they can actually know what they’re doing. No those numbers before they scale it. Because, you know, you can’t scale a fail. You know, you can’t, if it’s losing money, making it bigger, it’s gonna make it lose more money. And if you avoid paying those people, you’re probably making the problem worse. You’re not actually making the problem better. So a lot of times, you know, you know, forcing yourself to pay that bill forces you to make decisions that, you know, really, uh, you know, force you to know those numbers before proceeding, right. Because it makes you sure you know the numbers and you can pay the bills before you move on to the next step. So, you know, paying those bills forces you to go through that exercise where if you’d let them pile up, you can avoid it. do business owners who are getting behind often help unsustainable overhead as Edmonton Business Consultant?
Yeah, that’s the other thing. They don’t know the numbers or they have this like completely unsustainable overhead. Um, you know, and it does it matter. You know, they could literally double their sales or triple their sales and their steel going to be losing more and more money. Um, but they don’t really truly understand that because they’re avoiding pain. These people, they’re avoiding paying rent or they’re, you know, pushing off suppliers or you know, whatever they’re doing. Um, they’re avoiding the problem so they don’t truly understand the problem that it’s likely the margins or it’s likely they have unsustainable overhead. So does these unsustainable overhead often mean you should lay someone off? Yeah. So on sustainable over, there’s very few things and most businesses that really drive overhead, you know, you talk about your cost to sales as your revenue and then your cost to sales is your contractors or your supplies or the employees who actually do the working neighborhood gross margin. Then you have all those overhead expenses and there’s a long list of things and those overhead expenses, usually you have utilities and interest and bank charges and those sort of things matter. But they don’t matter that much. The things that matter the most are, is generally the physical space that you’re in. So like the rent that you’re in or the mortgage payment for the space that the business operates out of. And then it’s the administrative staff. Um, in a lot of businesses that’s really the only two numbers that they can play with to move the needle.
And the problem with the rent is usually you’re locked in on like some sort of longterm contract. It’s five years, 10 years, and maybe you can sublease it, maybe you can get out, but a lot of times like contractually you’re stuck. Um, and then you’re only moved to, you know, to make a big meaningful impact on the overhead expense is the administrative staff you go from, you know, in a small business and you go from three administrative staff to two administrative staff. I mean, you might’ve, you know, cut your overhead percentage, um, you know, by 15% in the whole business, whereas you could, you know, come cut all of your, your, your phone bills or your interest in bank charges in half. And it would make like a 1% difference in the overhead. So, um, you know, a lot of times that’s the only move that a lot of businesses have is cutting those overhead expenses. And why is this actually the ethical thing to do and better for the team long term?
Why is the ethical thing to do is because you’re thinking, Hey, I don’t want to lay this person off, uh, because I’m not a bad person and I want to make sure this, this person has a job. Um, but that’s actually, you know, that’s kind of a short sight of vision. Please be sure to call us now at 780-665-4949 as soon as you can! Also be sure to check out spurrell.ca now!
Edmonton Business Consultant | Please call if you want to get profit!
It’s not really an ethical thing to do because you have to realize that if you’re not paying people on time, you’re keeping this person on. You’re basically robbing Peter to pay Paul. Uh, you know, you’re not paying a supplier who had worked hard to, uh, you’re not paying the taxes on everyone’s RP remittances and eventually no one is going to get paid in the business when cra shuts everything down. Um, so you think that it’s the ethical thing to do, but in reality, you know, you’re making some real ethical blunders to do it. You’re not paying other people just because it’s that immediacy because that person is close in front of you and you have to tell them face to face that I ain’t gonna lay you off. And it feels more real than letting some bills pile up from a third party supplier, letting some tax liabilities pay up. Uh, but longterm it’s, it’s worse for the team because eventually you won’t be able to pay anyone on the team because you continually paid that one person live beyond your means as Edmonton Business Consultant can help you today!
No. Does paying on time help you avoid unsustainable nipple margins or overhead? Yeah. So by forcing yourself to make these payments, you make them on time. It May, it forces you to face the reality of if you can actually afford these people or not, can you afford the people on your staff? Am I making enough at the job to hire people to do it for me? And it’s okay to build sweat equity in terms of work that you do yourself because you can put your own time in and not pay yourself if you want as a business owner, but it’s not okay to hire other people to put work in and use their, their efforts as sweat equity. You have to pay that, you have to pay those employees and you have to pay those suppliers longterm will compress compression down and by not paying on time it, you know, lets you avoid the reality of what the margins are. That situation or what your eight your overhead is and you don’t face the problem so often, you know it can be too late.
How hard is it to come back if you let the debts pile up, you can be almost impossible. I mean, 29% of businesses fail businesses less. They’ve run out of cash. You let those debts pile up for a series of months. You’re not just like a new business. You’re a new business starting from, you know, further back from the start line and you’re not even starting from the, you know, from the start line. And you’re starting from further back and you’re starting with, you know, one tied behind your back. So it is very difficult to come back if you ignore these issues. And the way you do it, you ignore it as you, you, you delay payment, you think you’re doing it right, you think it’s part of building a business. You don’t, you don’t, uh, uh, pay people on time or you avoid people, uh, avoid paying people. Um, but really it’s just, you know, letting you not face reality. Um, and the key part is that you just go to f and you will face the reality and yeah, it, there are some lean times in business, but you know, avoiding paying people is usually because you’re avoiding the actual facts and you’re usually avoiding making the right decision as well. Why is failing to pay taxes and specifically payroll women’s especially bad. Yeah. So Siri has like ultimate power or like you are just, you know, not going to pay your taxes one day and cra will literally go into your bank account and freeze your account and take whatever money you have and they’re not going to ask for you your permission. If you ignore them long enough, they’re just going to go and do it. And there’s not a thing that you can do about it. And like payroll remittances are especially bad because see or have used these as unlike taxes where it’s easy to, you know, miss a projection and they give you a little bit of a grace period. We’re talking about payroll. Taxes is money you should have withheld from someone’s check. They view it as like a trust account. There is no way you should have spent it on something else. Um, you’d also there, you’re going to get behind on something like that and they’re not going to give you six months or a year to direct to find that situation. They’re going to say, you’re going to rectify it now. Maybe they’re going to give you three months. And by that time you could be, you know, tens if not hundreds of thousands of dollars in the hole and it’s impossible to come back from that in three months and they are going to be ruthless in, you know, freezing those accounts need to help you get amazing Edmonton Business Consultant today!
What happens to team morale when employees see the business avoid obligations? I think the team starts to see that the owner will avoid their obligations and the team also then feels, well, it’s okay for me to avoid my obligations. Maybe I’m not going to do the checklist. Maybe I’m not going to make the phone calls I was supposed to make. Maybe I’m not going to greet the customer the way you told me to greet the customer would be, I won’t show up for my scheduled shifts. I mean the business owner doesn’t leave live up to their obligations. Um, that sort of culture will permeate throughout the entire organization and you can’t, you know, just artificially try to block that off on the financial end and expect that that won’t bleed over into the operational and the employees will sniff that out. And that will become the culture of your organization. Use these guys now as soon as you can for the best Edmonton Business Consultant today!
And will not paying someone almost always costs you more than it saves. Yeah. So sometimes business owners, they’re thinking, okay, I’m not gonna pay this. I’m gonna avoid paying this person. I’m going to complain about something just being overly difficult customer. There’s a, so I can avoid paying someone to living up to my obligation. But the, you know, the business world is smaller than what you think. Uh, and eventually somewhere down the line, that person is going to know someone who is planning on doing business with you and you’re going to lose that deal because you know, they don’t think you’re an ethical person. You didn’t live up to your obligation. You promise to pay them and you either, you know, blatantly just disregarded it or try to come up with some artificial reason about why it was okay not to pay someone. Uh, and it’s, it’s going to save you money in the short term and it’s almost always going to cost you money in the longterm because you’re going to lose sales, you’re going to lose deals. Um, you know, people aren’t going to do business with you. They’re not going to lend you money, they’re not going to invest in you. They’re not gonna purchase your product or service. Because eventually, you know, the people that your, your, your targeting are going to have done business or known someone that, uh, that you didn’t. Um, it, it happens and it happens all the time. And although they think they’re saving money, they almost invariably always lose more money than they say by not paying. So I think that’s what we have here today. Thanks so much for tuning in. As always, please at the liken subscribe buttons so we can continue to deliver you tips on how to beat the odds at business. And as always, we look forward to any comments that you have that you can leave them below so we can respond back and use your input for future videos. Thanks very much and give us a call now at 780-665-4949 or go to spurrell.ca as soon as you can!