As businesses adapt to the next normal, now is a good time to look at ways to protect the business and improve processes. Here are a few examples:

• Prioritize spending on cybersecurity—Companies of all sizes are under threat by hackers. These threats can hurt your organization’s reputation and its bottom line. Protecting your business will help keep customer information safe and mitigate risks.
• Implement Internet of Things (IoT) technology—Businesses can use IoT technology as a way to reduce costs and improve efficiencies. For instance, a smart lock can allow you to lock the premises from a mobile device or radio-frequency identification (RFID) tags can be combined with IoT to track inventory.
• Use remote process control—Installing remote working software can allow businesses, such as a manufacturing plant, to operate remotely.
• Train workers using augmented reality—This type of training helps workers practice and learn skills in a realistic environment, which is often more cost effective than traditional methods.  

For more information, reach out to:
Rishan Lye
647-503-4682
rlye@bdo.ca

Planning for the future is important for every business. Your plan should include future expectations for the business and how you expect to achieve your goals.

Here are a few items that can be covered in your plan:

• Challenges—Your business will always face a number of problems. You should identify potential challenges before they emerge and have a response plan.
• Opportunities—These can include potential acquisitions, new revenue streams, and new markets. Consider both the positive and negative outcomes.
• Succession—You may want someone else to run the business or you may wish to sell your business to employees or outside third parties. Any potential sale should be planned at least two years in advance.

For more information, reach out to:
Tim Sothern
519-576-5226
tsothern@bdo.ca

You may be wondering whether or not you need to restructure your business. If sales are falling and you’re running out of cash, a stakeholder demands immediate payment, or you’re significantly behind on your accounts payable, it’s likely time to restructure.

A restructuring can be either be completed on an informal or formal basis. An informal restructuring may involve negotiating with your stakeholders the amount you can pay that’s owed to them and the timeline associated with those payments. This can be more difficult if you have a large number of stakeholders.

A formal restructuring is under the Companies’ Creditors Arrangement Act (CCAA) or the Bankruptcy and Insolvency Act (BIA). While both have similarities, there are also some material differences (CCAA requires greater than $5 million in debt).

To learn more, reach out to:
Jervis Rodrigues
604-443-4724
jrodrigues@bdo.ca

Change is a constant and businesses need to learn how to adapt. There are a number of strategies you can embrace to help your organization.

• Embark on a digital journey—Adopting a digital strategy will make your company more agile. Having greater visibility and access to data can help you make better decisions and respond to challenges faster.
• Embrace artificial intelligence (AI)—AI has the power to harness disparate sources and systems, and automate the tasks of merging and analyzing information in a repeatable fashion, which will better support your clients’ needs.
• Explore using blockchain platforms—While blockchain is primarily known for cryptocurrency, it has a number of other applications. For instance, blockchain can enhance visibility, security, and efficiency to processes and transactions across the supply chain.

For more information, reach out to:
Craig Mulcahy
902-536-0634
cmulcahy@bdo.ca

In order for a business to grow, there needs to be bottom-line and top-line growth. There are three common ways to boost both profit and revenue:

1. Acquire more customers—You should research what they like to buy, what propels them to make a purchase, and customize your marketing and communications strategy accordingly.

2. Increase transaction frequency—Winning new customers is more costly than having existing customers purchase from you again.

3. Increase transaction sizes—This can be done through cross-selling (additional items to add value), bundling (bundling together products or services into a single purchase), upselling (getting the customer to buy a more expensive item or upgrades), or creating new product or service lines to sell to existing customers.

For more information, reach out to:
Tim Sothern
519-576-5226
tsothern@bdo.ca

When your business is in good shape financially, it may be time to consider making an acquisition. Purchasing another company can increase market share, reduce costs, and diversify the number of products or services you offer.

For instance, a vertical acquisition will give you more control over the production and distribution process while reducing the number of intermediaries.

An acquisition can also be made to acquire talent (such as a strong salesperson) or to purchase customer lists.

The acquisition process usually begins with searching for a target. You’ll then perform due diligence before creating a letter of intent and finalizing the sales and purchase agreement. This is where the help of a trusted business advisor is beneficial.

For more information, reach out to:
Adam Mallon
780-643-6192
amallon@bdo.ca

Your business faces a number of risks—some are known and others are unknown. While it’s impossible to eliminate all risks, it’s possible to proactively address vulnerabilities. Knowing what the challenges are can help you prepare for managing and mitigating risk.

Implementing an enterprise risk management (ERM) program should be done throughout the business in order to foster a culture of risk awareness.

An ERM assessment can help your business determine how to better manage operating costs, protect key relationships, improve earnings, and align operations with your stakeholders’ expectations.

For more information, reach out to:
Pierre Taillefer
514-934-7806
ptaillefer@bdo.ca

As your business begins to stabilize, you will likely want to bring back staff that had their hours temporarily reduced or eliminated as a result of the COVID-19 pandemic.

You may need to update human resources (HR) policies or procedures to reflect changes to legislation regarding layoffs, new rules around job protected leaves, and other HR best practices that have come to light as a result of the pandemic. You will probably also need to make decisions and changes to the workforce, such as creating new roles, determining if any additional workforce training is required, and deciding if there are potential terminations needed.

HR professionals can assist you with these matters, help ensure you’re compliant with your jurisdiction’s laws and regulations, and provide advice to deal with employee and workplace issues.

For more information, reach out to:
Hali Van Vliet
705-712-1605
hvanvliet@bdo.ca

As business begins to recover, it’s a good time to review your insurance coverage. Many businesses realized they might not have had enough protection as a result of the pandemic.

You should consider the type of products you need to weather the next unexpected event, such as:

• Commercial property insurance
• Business income loss insurance
• Directors and officers liability insurance
• Errors and omissions insurance
• Crime and fraud insurance
• Cyber risk and data breach coverage insurance
• Equipment breakdown insurance
• Commercial general liability insurance
• Commercial auto insurance
• Home-based business insurance

Other types of insurance you may require include management liability insurance, professional liability insurance, and event cancellation insurance. While not all insurance products are needed for every type of business, reviewing what coverage you have and purchasing additional insurance you need can give you peace of mind.

For more information, reach out to:
Chetan Sehgal
416-775-7812
csehgal@bdo.ca

Many businesses owners are having difficulty keeping their business afloat as a result of the pandemic. And it’s difficult to predict how long your business will be affected. However, there are some steps you can take before approaching lenders.

You should have good data and records. Lenders will want to see financial statements audited, reviewed, or compiled by a chartered accountant. If you’re an owner-manager, they will want to see a personal net worth statement.

Lenders also want to see cash flow projections, budget forecasts, and records of inventory. They will want to know what you’ve been investing in, such as equipment or digital technology.

Having high-quality information to present to your lenders will help improve your chances of getting financing.

For more information, reach out to:
Tim Sothern
519-576-5226
tsothern@bdo.ca

Many business owners will look at ways to minimize the amount of tax they or their beneficiaries will have to pay.

One option is to freeze the value of your estate. Completing an estate freeze when the value of your business has fallen will reduce the tax bill when you pass away.

There’s also the option to implement a trust/holding company structure. If the business generates excess funds, the funds can be paid to a holding company on a tax-free basis, and the business can maintain eligibility for the lifetime capital gains exemption.

If you’ve already frozen the estate and the value of your business has declined since the original freeze, you have the option of refreezing the business at the current value, and allowing the growth from today on accrue to the next generation.

To learn more, reach out to:
Quinton Pullen
250-763-6700
qpullen@bdo.ca

Your business may be able to operate with the money it has for now, but it may need additional funding in the future. Here are some potential sources of capital:

Existing lenders—Work with your current lender to try to get additional capital or more flexible payment terms.

New or supplemental lenders—A new lender may offer better terms than your existing lender while a supplemental lender can provide you with a new source of capital.

Equity investors—An equity investor can also provide you with additional support, but it will take time to arrange funding.

Leasing companies—If you need equipment, you can rent or lease to own. It’s a more expensive form of financing, but you don’t have to give up equity.

For more information, reach out to:
Tim Sothern
519-576-5226
tsothern@bdo.ca

Since March, the federal government has rolled out a number of stimulus programs. Here are a few that can provide much-needed help:

• The Canada Emergency Wage Subsidy (CEWS) covers 75% of an employee’s wages (up to $847 a week) for eligible employers.
• The Canada Emergency Business Account (CEBA) provides small businesses and not-for-profits with interest-free loans of up to $40,000.
• The maximum duration of the Work Sharing program is extended to 76 weeks from 38 weeks for employers affected by COVID-19.
• The Business Development Bank of Canada and Export Development Canada will guarantee new operating credit and cash flow term loans up to $6.25 million that financial institutions will offer to small and medium enterprises.

For more information, reach out to:
George Stefan
604-532-4743
gstefan@bdo.ca

Many businesses have managed their workforce without internal human resources (HR) expertise, but the pandemic has made it more difficult.

They’re facing a number of HR challenges, such as:

• The mental health of their employees
• Keeping productivity levels high as employees work remotely or under new safety protocols
• Maintaining employee engagement for those working in isolation

During this time, HR professionals can help you with your workplace issues. They can also provide help with creating return-to-work programs, and drafting HR policies that address new health and safety measures.

For more information, reach out:
Hali Van Vliet
705-712-1605
hvanvliet@bdo.ca

When looking at your cash flow, you want to have a strategy to minimize the amount of cash you spend and improve the amount of cash coming in. This means looking at what’s critical and what’s not.

Some non-essential operating expenses may include meals, entertainment, and travel. You should also look for ways to reduce expenses or extend current payment terms. This may mean renegotiating your lease, finding less expensive/alternative suppliers, and monetizing excess equipment that’s not required.

You need to collect money from clients as soon as possible and pay the suppliers that are most critical to keeping your business running first. Also, talk to your suppliers to see if there are payment plans available and ask your creditors if they can forgive a portion of your obligation.

For more information, reach out to:
Clark Lonergan
647-730-0934
clonergan@bdo.ca

In the event you’re unable to get your debtors to pay all or a portion of what’s owed to you as a creditor and assuming that your debt is secured, you can appoint a receiver under your security agreement or make an application to the court for the appointment of a receiver or interim receiver.

Under a private appointment, the receiver will act on behalf of the creditor that appointed it and its primary duties are for that creditor.

Under a court appointment, the receiver will act on behalf of all creditors and acts in an unbiased manner with all creditors.

Unsecured creditors have the ability to petition the debtor into bankruptcy for the realization of the debtor’s assets for the benefit of all creditors in order of priority as set out in the Bankruptcy and Insolvency Act (BIA).

To learn more, reach out to:
Marc Kelly
403-536-8510
makelly@bdo.ca 

Conducting a business, financial, and operational review is necessary to assess how your organization is performing. You should review your sales in detail (regional and by stock keeping unit), the profitability of each product or service, your customer base, your working capital requirements, and any macroeconomic factors impacting your business.

A review will help you understand your performance trending, current financial position, and how much cash is required or tied up in your working capital balances. Communicating the plan that’s derived out of your assessment to your stakeholders can help manage them effectively through any headwinds that your business maybe facing.

Business assessments can help you learn what steps are required to improve your company’s short- and long-term viability.

For more information, reach out to:
Clark Lonergan
647-730-0934
clonergan@bdo.ca