Get Lean before Bulking – fundamentals of scale

What happened to THUT? At its height, we employed 6. Today, with more and larger customers, there is only 1 employee.  In order to grow, older companies (4+ years) need to get lean first: downsize until the marginal costs of outsourcing exceed the cost of doing it internally.

  1. Staying lean is key to operational efficiency.  For a company with healthy revenues, the fastest way to increased profits is to cut costs.  You’ll need to eliminate product lines/customers that are responsible for a disproportionately small part of your revenue.
  2. Getting lean first sets your company up for better scale. Efficiency compounds so you will grow exponentially faster if you get lean first and improve your margins.

For us getting lean, meant realizing no one has ever gotten rich doing everything for everyone: In 2016 we cut down our contacts because it made no sense to corrupt our Dunbar’s # when half the people we dealt with only generated 10% of our revenue.  2017 we have improved where  14.67% of our revenue comes from 37% of our customers.  But it clearly makes more sense to give up $115,000 of revenue (14.67%) if we can save 37% of our time, hence we have eliminated even more.

Now in 2018, we are focused on being the best platform designed to meet the needs of e-commerce, casual dining and high-end services (engineering/trades/salons). The best being defined as precision, ease of use and comprehensiveness.  Now, we are a fully integrated blockchain solution that brings together payroll, bookkeeping, accounting, corporate taxes, personal taxes, banking and wealth management.

Lessons in staying lean:

  1. Never hire managers or business grads – as employees or as contractors (ie external accountants).  Hire doers instead (trades/technical experts). Engineers can do the work of 10-100 accountants, so our company will never hire an accountant.
  2. Business plans, financial projections, budgets are all a waste of time – simply reframe your focuses as a function of time and get better every day.   Prioritize maximum effort and make sure taxes, payroll and housing are planned for – no other cost-cutting matters compared to those big 3.
  3. 80% of your time should be in delivering your product and only 20% on support and marketing (AI powered online advertising).

Check out the archive and like us on Facebook to continue our journey to financial freedom in an increasingly complex world.

 

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Scale, Derivatives & the Most Important Ratios

Since we have agreed that math is the key to escape the middle class, we must go further to how to apply math in your business.

Everything operates on first and second derivatives, marginal effects, and ratios.

Algorithms are the key to scale:

  • Find a problem that you can address that will bring value to customers.
  • Re-frame this problem as a function of time and build your process to deliver to the customer.
  • Continue to define and simplify your process to facilitate scale.

Derivatives tell you the marginal cost (change in cost/change in unit produced) of each additional unit of production.  Lesson: unless you scale a simple business, you should not grow indefinitely since the increase in size will increase the complexity to the point that profits will decrease. The second derivative shows that with each added unit, the curve in relation to the cost will get steeper as your costs disproportionately increase.

Systemization is important because even slight differences will cause your costs to go up disproportionately with the volume increases.  The cost of interruptions, cognitive residue, and communication between steps of your process between extra people will slow you down.  The solution is to sell a narrower range of products (or services marketed as products) to fewer customers (not applicable to e=commerce and casual dining) and have fewer vendors.

 

Avoid the traps: If you see poor choices, recognize that poor choices= poor character. Do not give second chances: if you see a single-character flaw (ie: blames others) you must not do business with that person. Also, don’t forget to measure the math strengths of your competitors. Find the minority fraction of your profits and revenue that are disproportionate to the number of customers it is generated by. Eliminate the product line/customers.

 

Analyzing the aforementioned for 12 years has allowed me to make several conclusions: Long-term sustainable business will need to have at least 20% pre-tax margins.  This is only possible by charging market rates, having a good reputation, the best people,  a high ratio of production vs support costs, and efficient quality – with efficiency defined as value created/time spent creating value.

 

The next most important ratio is your payroll: revenue. Remember, machines give 80% of a human at 20% of the cost.

 

Another conclusion is that there are 3 customers for us to work with:

  1. Skilled owners of software/equipment that is too costly for the average person to purchase + skills the average person can not learn from youtube.
  2. Amazon sellers
  3. Basic single-idea restaurants (ex. Vietnamese, Donair, Italian etc.) scales easily and costs are lower

What all 3 groups need to do is have high-quality product and marketing which scales to more employees and more capital assets (software, equipment, work van).

The pseudo-intellectual trend of Anglo-Saxon business has taken “accounting” too far, and to avoid analysis paralysis we subscribe to the simplicity of the math-based-Germanic-style. This is also representative of the simple, yet effective models of the Asian mass-market dominance, simple restaurant (ex. Pho), or nail salon.  Complex businesses are more difficult to scale.

 

A less significant conclusion from 12 years of processing billions of robo-accounting transactions: don’t indulge in furniture unless it’s from Ikea, Costco, or second-hand.

Here are MORE math hacks!

Math to Escape the Middle Class

Being part of a certain profession, or earning a certain amount of money does not ensure your exit from the middle-class.  Most people are stuck there because of math.

We focus on the only 3 sources of negative cash flow that matter: taxes, housing and in the case of a scalable business – payroll.  Even the highest earners stay middle-class if they don’t focus on taxes and housing.

Taxes: Everything you pay for really costs you 1.5x-1.8x more since you would be paying for it with after-tax dollars rather than pre-tax dollars. The only expenditures exempt from this rule are business assets and expenditures bought inside a corporation.

Housing: In combination with the taxes above, depending on your tax bracket, your mortgage and your interest rate, a $1 million house will cost you at least $1.5 million (no mortgage and extremely low level of living requirements) and as much as $4 million of gross earnings.

Now Here’s the Math

Regression To The Mean & Bimodal Extremes:  How is that so many high-earners are trapped into the middle-class mediocrity of trading their limited time for money?  In any group, people of high-value/high net worth/high IQ are dragged down by people of lower-value/lower net worth/lower IQ due to osmosis.  If you take advice tailored to the middle-class, by a middle-class advisor, you should not be surprised if you end up middle-class. You need to find someone who is living a life that you want and take guidance from there.  So in short, ignore anything average, and advice from/for average people are to be avoided at all costs. The solution is bimodal approaches from the extremes.  90% safe investments + 10% high-risk investments vs. a mediocre portfolio with limited upside and a possible unlimited downside.  Or mediocre jogging vs. extreme high-intensity training. Other bimodal strategies with exponential benefits: intermittent fasting. The framework to pursue bimodal extremes involves ranking your options in descending order of optionality and open-endedness of pay-offs.

Dunbar’s Number & Via Negativa: The solution to this is to be mindful of the upper limit to how many interpersonal relationships your brain can process (150).  I can never have more than 150 contacts (this does not apply to mass-market businesses, but something so sensitive as advisory to HNWIs can never be mass-market). Most problems are better addressed with subtraction (Via Negativa – Nassim Taleb) To keep negative osmosis from happening in my life, I removed the bottom 50% of people from my life and doubled-down my time on the top 50%. I repeated this process many times until I was down from 1000+ to 150 contacts.  Everyone in my life is either moving up or moving out of my life.  This eliminates the negative osmosis that would otherwise cloud my thoughts with middle-class thinking.

Chaos Theory Feedback Loops: Its nearly impossible to remain middle-class if you focus your actions on receiving a recurring benefit. The best way to start is to reframe all your problems as a function of time and improve year over year (YoY). This means you will get richer due to superior/scalable abilities and your riches will beget more riches. This will result in a knee in the curve non-linearity compared to the linearity of the middle-class.  All decisions compound (both for and against you), and this makes money eventually become perpetual so the path is clear: prioritize the maximum effort to get compounding on your side (make sure your inflows compound more than your outflows).

Chaos Theory and Dynamics: The middle-class think in simple terms of cause and effect, when the reality is that the outcome in sensitively depending on initial conditions, so the cause will result in empirically complex 2nd, 3rd, 4th, …. nth steps. It’s better to fix systems  Via Negativa – Nassim Taleb, since the middle-class solution to add more things to their life make things worst.

Inversion: A famous problem-solving technique in mathematics can be easily used to re-frame everyday problems.  Whatever question you ask yourself – ask yourself the inverse question. The path to success is not as clear as the path to failure. So by doing the opposite of the path of failure ensures you survive, and as Taleb reminds us you first must survive in order to succeed.

Pareto’s principle: The majority of a given effect is due to a minority of the possible causes.  You have a limited store of attention and time, so to create the aforementioned feedback loop you need to prioritize high-impact activities. Maximize the results by minimizing the stuff that doesn’t count: don’t check your e-mail more than 3 times a day, stop watching TV, surfing the net,  playing video games, and taking unnecessary vacations.  Make your own life great instead of engaging in escapism.  Make your life so good you don’t need a vacation. The more you shift your attention/time to high-impact activities the higher your overall benefit due to the compounding.

Game Theory and the Prisoner’s Dilemma: Will allow you to recognize and exploit the irrational decisions of others.

Calculus: Marginal cost bisects average cost at the minima of the average cost. The optimal point of production in terms of profit by maximizing your output variables can be determined by cost and revenue functions.

Here are some more math hacks for your scalable business.

 

 

 

 

 

 

 

 

 

“Mua khi máu chảy trong các đường phố.” “Ngay cả khi máu là của chính mình”

“Mua khi máu chảy trong các đường phố.” “Ngay cả khi máu là của chính mình” – Freiherr von Rothschild

2018 mang lại thời kỳ kinh tế bất ổn. Nhưng đối với những người đang chuẩn bị nó có thể mang lại một cơ hội một lần-trong-một-đời để đẩy nhanh tiến độ giàu có của bạn.

DETAILED ENGLISH VERSION HERE:

https://thutaccounting.wordpress.com/2018/04/05/investing-philosophy-updated-for-2018/

Khách hàng nên:

  1. Trả bớt nợ
  2. Cố định lãi suất thả nổi (floating-rate) cho khoản vay mua nhà hoặc xe và cho định mức tính dụng (line of credit)floating rate là interest rate lên xuống hoạc thay đổi theo thị trường

    line of credit: còn gọi là credit limit

  3. Bán bất động sản nếu như khách hàng đang ở trong tình trạng tài chính khó khăn (kẹt vốn, hoặc không xoay đủ tiền trả nợ) hoạc không cần giữ bất động sản đó nữa.
  4. Không nên mua nhà đến khi giá nhà giảm
  5. Mở một tài khoản US Dollar nếu hàng thường xuyên giao dịch bằng tiền Mỹ
  1. Dự đoán là giá xăng và giá hàng hóa nhập khẩu từ Mỹ sẽ tăng trong năm nay. Các khách hàng nên chuẩn bị tâm lý.
  2. Mua các tài sản giá rẻ (distressed assets) sau khi thị trường chỉnh sửa (market correction), ví dụ như nhà, đất, tài sản kinh doanh và xe. Với dự đoán về lay-offs, các dự án bị hủy bỏ, và lãi xuất tăng cao, nhiều người dân Canada sẽ gặp khó khăn trong việc trả nợ.distressed asset là tài sản dược bán với giá rẻ bởi vì người chủ truớc bị buộc phải bán di khi cần xoay tiền gấp

    market correction là khoản thời gian mà giá cả các mặt hàng giảm

  3. Bảo đảm HELOC của tài sản nhà đất mà khách hàng đang nắm giữ để khách hàng có thể thu mua các tài sảmn khách với mức giá thấp hơn.A home equity line of credit, or HELOC, giống như a home equity loan khi mà khách hàng dùng vốn sở hữu nhà của mình (equity) để đảm bảo cho credit line
  4. Lấy $ 100 mà bạn nhận được cho Universal Child Benefit mỗi tháng và gửi nó vào tài khoản tiết kiệm của con quý vị. Trong 18 năm ở mức 5%, số tiền đó sẽ tăng lên đến $ 35,000! Đó là $13,400 tiền lời mà quý vị không phải nộp thuế.
  5. Nếu con của bạn làm việc part-time,bảo chúng dùng số tiền thu nhập để đầu tư hoặc gửi số tiền này vào tài khoản tiết kiệm của chính chúng. Sau đó, cho con của bạn “vay” một số tiền tương đương. Việc đầu tư sẽ không phải đóng thuế dưới tên của quý vị, mà con của quý vị phải đóng thuế
  6. Những lợi ích của nhân viên mà phải khai thuế:

 

  • a vehicle provided by employer
  • fuel and mileage allowance paid to employee (vs. a reimbursement)
  • cellphone & airtime
  • food & lodging
  • flat-screen TV or other prize “won” for referring new employees/customers

 

Nếu bạn lái một chiếc xe công ty, ghi lại nhật ký số kilomet chính xác của tất cả các chuyến đi kinh doanh và tất cả các chuyến đi cá nhân. Hãy nhớ rằng đi làm từ nhà tới văn phòng không được coi là mục đích kinh doanh. đồng thời, lưu giữ các cuộc điện thoại mà bạn gọi với mục đích kinh doanh khi bạn sử dụng điện thoại riêng của bạn

  1. Những khoản chi tiêu nào có thể khai thuế cho self-employed (tự làm chủ, một mình kinh doanh)Nếu bạn có thể chứng minh rằng chi phí của bạn đã được dùng hoặc phát sinh để tạo ra thu nhập trong khoản thời gian hiện tại hoặc tưong lai, và số tiền chi tiêu là hợp lý, không bao gồm bất kỳ chi phí cá nhân và đời sống, CRA cho phép khai thuế những khoản chi tiêu này.
  2. Chi phí Auto: Một bản chép chi tiết dược yêu cầu, trong đó báo cáo quãng dường kilomet cho sử dụng cho mục đích kinh doanh và mục đích cá nhân kể tính toán tỷ lệ khấu trừ. Một số chi phí có thể được báo cáo trên cơ sở không có biên nhận: bãi đậu xe, rửa xe, trả tiền điện thoại hay bất kỳ chi phí phát sinh khác mà không thể nhận được một biên nhận.
  3. Chi tiết phân phối sử dụng số tiền cá nhân vào việc gì (personal use allocation)
  • Giữ các khoản chi tiêu, biên lai cá nhân vào một tài khoản khác hoặc folder riêng
  • Kinh Doanh bán mỹ phẩm cần phải báo cáo một số tiền hợp lý cho các tiêu dùng cá nhân, trừ khi họ có thể chứng minh họ không bao giờ sử dụng bất kỳ các sản phẩm cho riêng mình. (cửa hàng quần áo, cửa hàng tạp hóa, các trang trại, bán cá và các cửa hàng tương tự).
  1. Các loại ích được miễn thuế (không cần phải khai thuế):
  • Quà tặng cho các ngày lễ đặc biệt (không phải bằng tiền mặt hoặc gift card)
  • các bữa ăn được trợ cấp
  • đồng phục và các quần bảo hộ lao động
  • các điều kiện giải trí bao gồm tài khoản thành viên của hồ bơi và phòng tập thể dục
  • Chi phí di chuyển, dọn nhà
  1. Quý vị có biết:Trong việc thu thuế các CRA có quyền tịch thu tài sản và đăng ký vật thế chấp lên bất động sản mà không cần thông báo. CRA khuyến khích mọi người báo cáo hành vi trốn thuế bằng cách gọi văn phòng dịch vụ thuế địa phương một cách ẩn danh. CRA có cán bộ và người hoạt động bí mật để thu thập bằng chứng cho việc điều tra các cáo buộc hình sự.

Investing Philosophy Updated for 2018

For the past 10 years, I was a strong proponent of dollar cost averaging. But our bull market will come to an end in this 4th turning.  What else can you expect:

  1. an increase in your mortgage payment due to rising interest rates;
  2. global equities will be down 20-40% from the maxima
  3. Alberta real estate will go down only slightly from the maxima
  4. consumer products will get more expensive as inflation will continue to grow and the currency goes down as the trade deficit widens.

Overview

  1. Prioritize building a scalable that pays you at least $200K/year
  2. ONLY once you have #1. Then buy a home no more than 4x your gross annual household income with no less than 30% down. If you don’t have 30%, either continue to rent or buy a home 2.5x your gross annual household income with 20% down. For 2018 $500K-$1M seems appropriate in Edmonton. Anything more will be more difficult to sell.
  3. With a 7-figure business paying you $200K+/year, a house, then just collect $3 million in cash.

 

Pre­crisis Framework

  1. Cash in all your shares/mutual funds, the surplus real estate now at the ATH and protect the proceeds by CDIC protected by staggered GICs.
  2. Minimize your company withdraws to minimize taxes and if applicable maximize tax-free Canada Child Benefits.
  3. Maximize earnings. Under-consumption allows you to feed yourself while you are not directly earning. Under-consumption allows you to invest time in exchange for exponential future gains rather than simply trading your limited time for money.  Over-consumption will keep you from being able to invest your time/resources which will be consumed to service bigger mortgages and lifestyle.
  4. Save at least half of everything you earn. It is silly to borrow money for depreciating assets like cars and furniture unless your money is earning you much more through your business/investments.
  5. Autonomy and not having to rely on a job will ultimately make you happy. Having expensive to maintain items, like gas­guzzlers will take you further from autonomy and happiness.
  6. Get rid of any non­corporate vehicle payments, and avoid buying vehicles with debt unless its required for your business. If you have a mortgage and spent more than either 5% of your net worth or 20% of your gross annual income on a car = sell it.  Wasting an extra $40K on a car is equivalent of wasting 1 full year of your life.  Let this serve as a reminder to avoid useless material purchases.  Fuel cost is the single ­highest operating expense a vehicle incurs. Take into account how many kilometers you drive in a year perhaps you can make due with a used vehicle that is 5 years old or newer with 80,000-­112,000 km (based on Net Present Value calculations accounting for safety ratings, ongoing costs (fuel, maintenance, insurance), depreciation, resale. Audis and Kias are typically better than other vehicles. The Mercedes Metris work van proves economical with its long service intervals.
  7. Stop watching TV, surfing the net,  playing video games, and taking unnecessary vacations.  Unless you are financially independent, make your own life great instead of engaging in escapism. The Swiss love outdoor adventure sport. Make your life so good you don’t need a vacation.
  8. Protect your Dunbar’s #  – You are the average of the 5 people you spend around with most, so choose your employers, staff, and friends carefully. Cut the bottom 50% over everyone you know out of your life for good. Double down on the top 50%. To be polarizing is a good problem to have. I lose bad contacts and obtain good ones.
  9. Do not fall into the temptation of cheap credit and live within your own means. In German, borrowing is ‘schulden’, the same word for sin.  Only half the people in Switzerland own their own home, but those who own have higher equity than homeowners in Canada. Buy residential real estate for improving your life first, rental income second, and capital appreciation third.  If you can not count on capital appreciation, then buy a house cash.
  10. Most people should skip University altogether unless you attend an elite school and have skills leading you to a career in Engineering or Health-field only if you want to help others more than make money. Make the most of your time by getting the best grades in the shortest time so you can start your career ASAP. Otherwise exhaustively learn code online or learn a trade.
  11. Switzerland has no natural resources, covered by inhabitable alps and can fit in between Edmonton and Calgary! Canada has 20% of the world’s fresh water but a Swiss company is the largest water brand in the world.
The future will belong to:
  1. People who are the best at what they do through 90% doing & 10% learning.  Hone useful skills that allow you to deliver a service/product that people want and you can create opportunity regardless of the economic environment. Switzerland’s strong apprenticeship system has made it the most competitive country 7 years in a row.
  2. People with money. Strive to save 90% of your income.  Buy your car using metrics for yourself and not prestige for others. 12.7% of Switzerland’s population has a net worth over $1M vs. 1.4% in Canada.
  3. People who leverage technology. Online is the only path to scalability.  Switzerland has no resources but is ranked as the world’s most innovative country.
Post­crisis Framework: “Buy when blood flows in the streets.”  – Freiherr von Rothschild
  1. Buy small-cap stocks after the market crashes.

Background of the 4th Turning

  1. Canada’s trade deficit increases to $2.7B!This further confirms what reports have been saying for years. Canada is losing its competitiveness
  2. Canadians are living beyond their means and accumulating too much debt (Canada has the highest household debt of the G7 and the ratio of federal debt to GDP is the deepest within the G7)
  3. High demand for imports means more jobs are going overseas.
  4. As our exports continue to decline so will the value of our currency which in turn contributes to already rising inflation which will compound the housing cycle which is already in progress.
  5. The Canadian government is now heavily based on the Keynesian map – the road taken for a risky strategy.  The Fraser Institute has shown in a study that the debt of the Federal level and the provinces have clearly increased again over the last eight years after a good eleven ­year period of the economy. If the total debt in the years 2007/08 was at around 834 billion USD.  On several years low, it has grown again since then. A debt for all jurisdictions of around 1300 billion USD is expected for 2015/16. This corresponds to a growth of 54%, with the increase in the Federal level alone being 34%.
  6. Canada and its provinces have paid interest totaling $ 61 billion in 2014/15, which accounted for 8.1% of total income.  The amount Canada pays in interest was only slightly smaller than what is spent on all primary and secondary schools throughout Canada.  The amount Canada pays in interest was greater than all the pension plans of the Canada Pension Plan (CPP) and the Quebec Pension Plan (QPP), which amounted to around 51 billion USD.  In the province with the highest debt, the interest payments this year are expected to be about three times the expenditure on health care and education.
  7. Other organizations such as the International Monetary Fund (IMF), the OECD, the rating agencies and the Bank of Canada have also warned that the indebtedness of the Canadian private households appears to be at a serious level, especially thanks to record interest rates. If this trend continues for a while, then a disruption of the interest rate is likely to be more serious.
Foreign demand for Alberta’s natural resources contributed to our current situation.  Canada’s abundance of natural resources has interesting side effects. The trickle-down of wealth erodes productivity and created a nation dependent on Alberta.  Adaptability and productivity stay low while increasing costs, inflation, and unemployment. While consumption in Canada continues to overtake production, we will continue this downward spiral. Increases in government spending which the government borrows from future generations keep the masses from the pain of living beyond their means – the piper will be paid.  The more government interferes the longer the inevitable outcome will be.  For most, it will get worse before it gets better. Lesson: don’t rely on things you can not control.

Man’s best friend: Dog Not Wolf (Employees vs contractors)

“If one holds his state based on mercenaries, he will be neither secure nor peaceful; for they are divided, disloyal, ambitious and without discipline… they have neither fear of God nor are loyal to fellow men.” – Niccolò Machiavelli

Substitute state with company and mercenaries with contractors as you see that as with all decisions in life, when in doubt choose the path that is more difficult in the short-term vs the path of least resistance.

  • Hire employees in your main revenue generating activity that you know best. 
  • Hire contractors for supporting activities that require a specialized targeted skill set and economies of scale (robo-accounting, cleaning, plumbing etc).

After analyzing the CRA’s definition of employee vs. contractor, it is clear that contractors are independent tools you use to do a specific task, but in order to run a scalable business, you will need employees as gears in your machine, not just free-standing tools.

Life is about discipline or regret. You need the discipline to hire employees, discipline to manage your workflow as you have to pay employees even if you don’t have work for them.  This means you may need to sacrifice your short-term income/cash flow if there is not enough work for you plus your employees.   You will need to make the required payroll source deductions every time you pay them and remit these deductions in addition to your company portion contributions to the CRA in a timely manner.

50% of your costs (money/time) should be incurred in taking your product from conception to your customer.  Simplify your business into a process (see our 3-step robo-accounting system).  Be clear what your customers can expect and say no to anything that falls outside your process.

No one has ever gotten rich doing everything for everyone:

  • In 2016, we cancelled our #1 most popular category because the customers in that category (half of our total customers) was responsible for only 10% of our revenue.
  • In 2017, we went further to give up another category because we can save 37% of our costs (time/money) by giving up 14.67% of our revenue.  When you are dealing with high-value multi-year accounts of recurring revenue you must account for Dunbar’s #.
  • Today, 95% of our revenue comes from companies that are in the sweet spot of revenue: $300,000 to $6 million per year. Anything less does not scale and can not compete with the “working at Weatherford”, or the like. Anything more, as we have learned the hard way during our oil crash, is less anti-fragile.

Train disciplined people to handle the process. Hire 2, work them like 4 and pay them like 3.  The best employees have families (read: responsibilities including mortgage and SUV payments).  The 8 hour day was a product of the 18 century, so construction trades which remain fundamentally the same can continue with the 8 hour day, but knowledge workers should use the focused 5 hour day.  We had the focused 5 hour work day from 2010-2013 and started it again with one employee in March 2017. We have seen first hand that our focused 5 hour work day reduces absences, stress and increases efficiency.

Shifts under 5 hours, employees are not entitled to any breaks.  Lunch and breaks during the typical workday are not used to re-energize or restore attention.  In our office’s case, they are spent eating lunch late at our desks in front of the computer, while other workplaces time is lost strolling in late after getting caught in line at Tim Hortons. Back in 2010-2013, as owners, we worked 10+ hour days and we were much more efficient running two employees on separate 5-hour shifts (8am-1pm and the second person from 1pm-6pm).

Calculating the wage. If you pay someone $20 per hour, the employee should also “pay you” at least $40 per hour ($20/hour to pay for themselves and $20/hour for your).  You have to account for the payouts you are responsible for when you have staff: statutory holidays, 4% vacation and eventually termination pay.  Profit-per-employee is an important metric to keep your business on the right path.

Retention. A bonus, x should be paid to a performing employee at the end of the year and an amount equal to x is put into a reserve which you invest risk-free.  After y-years of building the reserve, the employee is allowed to withdraw 1/yth of the reserve.  If they leave they could be walking away from y-years worth of bonuses sitting in the reserve.

Industry examples. 

  1. Online businesses can be scaled completely with contractors, but employees can help reduce the time spent by the owner.
  2. Casual dining, (dozen+ of our customers were awarded Golden Fork awards)- should hire employees and contract out hood fan/duct cleaning (every 6-months), accounting.
  3. High-End Service companies should hire employees for everything except the specialized trade work (plumbers, electricians etc.)
  4. High-End Salons- hire employees and if they pay exclusively commission they can contract out the cleaning to ensure the tools, equipment and furniture and cleaned and sanitized properly.

Các Bước để Thanh Toán PD7A Online

Bạn phải thanh toán báo cáo PD7A của mình vào ngày 15 của tháng tiếp theo. Ví dụ: báo cáo PD7A cho tháng 2 phải được thanh toán trước ngày 15 tháng 3.

Chúng tôi khuyên bạn nên thanh toán PD7A ngay sau khi bạn nhận được nó từ văn phòng của chúng tôi, do đó bạn không cần nhớ phải trả tiền sau.

Bạn cũng có thể đăng ký để nhận được một email nhắc nhở để thanh toán PD7A của bạn đúng giờ. Bấm vào đây.


 

Đây là một lời giải thích về lý do tại sao bạn phải trả PD7A mỗi tháng cho nhân viên của bạn.  Ví dụ công ty lớncông ty nhỏ

 


To pay your Payroll Source Deductions (PD7A) Các hướng dẫn để thanh toán PD7A Online

  1. Click the link CRA My Payment System
  2. Click “PAY NOW” button
  3. Click “PAYROLL SOURCE DEDUCTIONS” under the “Businesses” heading
  4. Click “REGULAR REMITTANCE”
  5. Enter account number EXAMPLE: 123456789RP0001 (Không có dấu cách hoặc dấu gạch ngang)
  6. Enter all of the required information from your PD7A report you received from our office (Nhập tất cả thông tin bắt buộc từ báo cáo PD7A bạn nhận được từ văn phòng của chúng tôi)
  7. Click “NEXT”
  8. Confirm the account numbers and amounts are correct
  9. Click “CONFIRM AND PROCEED TO PAY” or select the radio button to modify payment.
  10. Click “PAY NOW”
  11. Choose your bank and enter in your banking login information and proceed to pay/confirm