Event summary produced by The Globe and Mail Events team. The Globe’s editorial department was not involved.
Updated on June 30, 2020
The Globe and Mail hosted a webcast on June 23 to provide small business owners with finance strategies. Entrepreneurs shared their own experiences and experts covered resources such as government programs and loans. The event was presented in partnership with CIBC.
Highlights from the conversation appear below the recorded webcast.
Key takeaways from the discussion:
1). Use the time to lean out
Vivian Kaye, founder and CEO of KinkyCurlyYaki, a disruptive e-commerce business providing premium textured hair extension for Black women, suggested using downtime to weed out slow-moving products and expenses such as unused apps. Over time, small businesses can become bloated, she said, so the slower days of the pandemic are a good time to tighten up and reduce expenses.
Ms. Kaye noted the government support programs don’t apply to many small businesses because they use contractors instead of having people on the payroll, or revenues haven’t declined enough. The thresholds have changed though so she suggested small business owners check the programs again to see if they now qualify.
2). Rely on advisors and experts
Government programs such as loans and wage subsidies are complex and constantly changing, noted Brandy Svendson, CEO and co-founder of Be the Change Group Inc., a global health consulting firm in Vancouver. When the pandemic hit, Svendson got in touch with the company’s legal advisor and financial planner for help navigating the programs. The advisors know the programs well, given they’re working on them all day for other clients, she said.
She suggested entrepreneurs weigh the cost of using an outside expert against the savings and subsidies they can help realize for the business. Her company has also hired during the pandemic to take advantage of the wage subsidy and student grants.
3). Consider tax strategies
Small businesses owners who have experienced a drop in the value of their company and who wish to pass future growth in the company to others might consider an estate freeze, said Jamie Golombek, managing director of tax and estate planning with CIBC. An estate freeze allows business owners to issue new shares to family members, such as through a family trust. The new shares will benefit from future growth, and the original owner can limit their future tax liability on their share ownership to the present value.
A tax advisor can also help with strategies such as realizing capital losses to offset capital gains, including the ability to carry losses back to previous years, he added.
4). Don’t be averse to debt
Jason Pereira, partner with Woodgate Financial Inc. observed many entrepreneurs feel they’ve failed if they have to take on business debt. Canadians have amassed large amounts of consumer debt but often avoid business credit and loans. At this point in time though, debt is relatively affordable and can be a vital source of business support, Mr. Pereira said.
He suggested entrepreneurs think about how their business was performing before the pandemic. If it was doing well and there will still be demand for the business’s products or services in the future, taking on some debt to survive the crisis likely makes sense.
View the full webcast above.