Let’s face it – U2 has been pretty much shit in terms of major release albums since the early 1990s. I think their main problem is that they take themselves too seriously these days. That aside, they actually caught my attention today when I heard on the news that they were getting shit from the Barcelona government for making too much noise and pissing off the neighbours while they rehearsed for the start of their world tour. [READ]

Big deal – rock band makes noise and pisses off locals. The real story here is that a band whose music is rapidly becoming too uncool for Apple TV commercials actually got some press coverage. This is a good thing! It’s going to build some buzz about what they’re doing and might actually drive up record sales. I’m still not going to buy their album because I’m a stubborn SOB. THEY’RE DEAD TO ME! DEAD! YOU HEAR? However, I wouldn’t change the station if the song came on the radio. I’m curious to hear if they’re rocking harder now.

I think there’s a lesson to be learned here from a marketing perspective – if you can’t do it right, do it loud. There’s a local jewellery chain here that has made shtick out of having the worst radio spokesperson in the business. This guy’s voice makes me want to drive my car into the first school bus or old lady I see. I pay attention though. I know more about this guys’ jewellery shop than I do any of his competitors.

I’m trying to think how to leverage the power of being loud in my own business. Suggestions?

This was the year that I started getting extra serious about my business and have been trying to grow it into something spectacular. Part of that exercise has involved me formalizing my business by incorporating and by getting a bookkeeper to help me make the most of my financial situation. Both exercises have worked well and I couldn’t have done it without the help of my amazing bookkeeper, Sandi McGill. Before I jump into the interview, I want to talk a bit about why I decided to stop doing my own books and why I decided to hire Sandi.

Before meeting Sandi socially, I wasn’t convinced that I needed a bookkeeper or that I needed to incorporate my business. After telling her how much income tax I paid last year (yikes!) it became clear that the time had come for me to incorporate. Incorporated companies, under the tutelage of an experienced bookkeeper, can reduce their taxes by a huge margin. Sandi had helped several other companies with their incorporation paperwork and I asked her to help me with mine.

Now that Sandi’s got me more off to a good start, she’s taking over the bookkeeping and is going to do my tax preparation for me this year. Part of growing as a business owner is knowing when to delegate to specialists and I have a lot of confidence in Sandi’s abilities. That and to be frank, it’s cheaper for her to do the books than for me to do it instead of generating billable hours. I’ve already referred her to several colleagues of mine and she’s still got room for more clients so if you’re in the Lower Mainland and need a good bookkeeper, check her out. [LINK] McGill Bookkeeping and Tax Services – bookkeeping and income tax preparation for businesses of all sizes.

Without further ado, here’s my interview with Sandi McGill:

Aaron: There are some tax advantages to incorporating over sole proprietorship, right? What are they?

Sandi: Yes there are definitely advantages to incorporating. Incorporating your company creates a separate legal entity. It keeps your personal finances and your business finances completely separate which is good when you are looking to borrow money.

There are also tax advantages to incorporating. A sole proprietor must declare all business income from January 1st to December 31st, on that year’s personal tax return. With incorporating even a one person small business can stagger the year end to allow for better tax planning. For example, if the corporation’s year end is January 31st but the personal tax return covers from January 1st to December 31st. By not declaring management/director salaries or shareholder dividends until sometime in January, the shareholder/tax payer can defer the business income to the next tax year or split the payment of income from the corporation to the shareholder/director in order to lower personal taxes payable.

Another tax advantage to incorporating is that the business owner (shareholder) can pay themselves in Director’s salary, dividends or a combination of both to lower personal income taxes payable but still show personal income. By paying dividends to the owner/shareholder the corporation also shows income. This helps both the individual and the corporation when looking to borrow money. Lastly, corporations pay a lower rate of tax on income, especially corporations with annual income under the small business reduction amount. For 2008, the small business reduction amount was $400,000.

Aaron: How much extra paperwork is involved? Can a bookkeeper help manage that extra paperwork?

Sandi: There is definitely some extra paperwork. First there is the actual incorporating. This involves an incorporation application and the adoption of a set of Articles of Incorporation. A standard set which is fine for most small businesses can be found on the BC OneStop Business Registry site [LINK]. There is a cost to incorporation of about $350 that is paid to the Government of BC when you file your Incorporation Application. Secondly, there is the Corporate Tax Return (T2). This can be found on the CRA website [LINK] or you can have a professional bookkeeper or an accountant prepare it for you. I recommend having it prepared by a professional as this is a rather lengthy return with many schedules and it can be a bit confusing. Although you can pay an accountant to do all this, a knowledgeable bookkeeper can help you at a much lower cost.

Aaron: What is the advantage of having a bookkeeper over doing your own books?

Sandi: The first advantage is that if you have a good bookkeeper they will better understand what you can and cannot deduct as a business expense. The Income Tax Act in Canada is a very large and confusing publication which is open to interpretation. There are many grey areas and a bookkeeper can help with that. Secondly, having a bookkeeper do your books leaves you free to build your business and earn money. This holds true whether you are a sole proprietor, a partnership or a corporation. A good bookkeeper can probably do your books in less time than you can because this is their field of expertise.

Keep in mind that if you take your books to an accountant, they actually have a bookkeeper do the books and they just review it. You may at some point have to have your books audited by an accountant but why pay the accountant’s rate to have your books prepared? It makes more sense financially to have a good bookkeeper and use the services of an accountant only when necessary.

Aaron: What should someone look for in a good bookkeeper?

Sandi: Well for starters you definitely want one that is knowledgeable but also not afraid to tell you they don’t know the answer to your question (remember Tax Act is HUGE and confusing) but will research it and get back to you. It is impossible for any bookkeeper or accountant to know it all!

Secondly, you want a bookkeeper that is accessible. Not 24/7 but at least returns your calls in a timely manner.

Lastly, I think it’s important that you find a bookkeeper that communicates well with you. Your bookkeeper should explain things you don’t understand but nicely. You definitely don’t want one that talks down to you. Ultimately, you need to understand what is going on in your company and on your tax returns. A good bookkeeper will provide you with monthly income statements and balance sheets once your paperwork is entered into the bookkeeping software.

Aaron: How many hours per month does a good bookkeeper need to spend on a company’s books? What does it cost?

Sandi: Well honestly that depends on the size of the business, how much paperwork and the state of the paperwork when it is given to the bookkeeper. Handing your bookkeeper a bunch of balled up receipts is going to cost more than if you have your paperwork a bit organized. Remember you are paying your bookkeeper the same rate to sort and file as you are to have them do your books. On average you are looking at between $50 to $150 per month plus about $25 per quarter per government sales tax and payroll filings. Annual tax returns can run from $100 to $150 for a sole proprietor and $400 for most small corporations.

Aaron: What’s the biggest mistake people make when they try to do their own books and taxes?

Sandi: They pay too much in income tax! Most people don’t take all the deductions that they are entitled to or they claim expenses that are not valid business expenses. Either of these mistakes cost you money, either by paying too much tax or by having to pay penalties and interest if you are caught making false deductions by CRA.

Update: I just left City Hall. The space isn’t zoned for what we want to use it for. Go figure! It’s been rennovated to be an office space and it’s zoned for “storage”. I’m leaving this with the landlord. If he can get it re-zoned by September 1, we might take the space but in the meantime, the search for space resumes! Who spends all the money rennovating a space without checking to see if it’s zoned for that use? WTF?

Effective August 1, 2009 – Friuch Consulting Ltd. will be re-locating its offices to South Vancouver near the scenic Oak St. Bridge! Working from home and on the road has been fine for us for the past six and a bit years but there comes a time when you need to get more serious and this is our year. We’re very excited about moving into our new space and once we’re settled in, we plan on throwing a friends & family open house so you can check it out and meet the whole team. Here’s the view from the office:

We’ll put our new mailing address up on the website once we’re moved in but if you want to check out where we’ll be on the map…

View Larger Map

June has been a very busy month for Friuch Consulting as we grow our practice. The blog, as a result, has suffered. I’ve only managed four posts this month (as opposed to my target – 12). I also experienced a very demoralizing drop in traffic the past four days that I need to investigate. My blog normally gets 100-200 unique visitors per day. Since Tuesday, less than 15 per day. I can’t think of a good reason why traffic would have dropped off so precipitously unless there’s something wrong with my tracking urchin. Update: I upgraded Wordpress on Tuesday and it stripped my urchin code out of my Google Analytics plugin. Doh! I’ve fixed it so we’ll see if that helps the numbers.

In the meantime, I’m going to put the blog into dormancy low gear until the rest of the team gets up to speed and can start writing more. The tone and flavour of the blog is likely to change as a result. My colleagues all have their axes to grind and favourite topics and we’re going to have a more organized editorial schedule to reflect that. This will start right around when we update the website content in early August to tell you more about our team, what we’re doing and where we’re going.

In the meantime, enjoy some sporatic postsings from me in July and look for a re-launch of the blog in August.

Forgive me father, for I have sinned. It has been 12 days since my last post. It’s been a busy 12 days indeed. I’ve been trying to get more organized as we grow Friuch Consulting into the number one management consulting firm in BC by 2020. We’ve got a long road ahead of us but we’re looking forward to the journey. Here’s what we’ve done in the past 21 days:

1. New Associates – Found
   

   Back in early May, we started the search for new associates [READ]. We had informal meetings with quite a few people and we’ve landed on someone who is going to be an integral part of the firm going forward. We’ll make a formal announcement in the next month as this talented individual ramps up full-time with us. We’ve also identified at least three other individuals who will be working with us on projects going forward. Again, we’ll make a formal announcement next month about these individuals and what skills they will bring to the firm in the coming month.

2. Incorporation – Mostly Complete
   

   Our incorporation paperwork was finally completed on June 18 and our Chart of Accounts has been set up with our talented bookkeeper – Sandi McGill. Sandi was a big help in walking us through the process of incorporation – I recommend working with your bookkeeper or accountant when you’re setting up your incorporation paperwork. There are considerations that a good bookkeeper can advise you through. We still need to get our new bank account set up but as of June 18, we are operating as an incorporated firm – six and a half years after Friuch was founded as a sole proprietorship. This has been an interesting transition for us and while it doesn’t really impact our approach to the work, it changes how we see ourselves. I guess we feel more “grown up” now.

3. New Office – Just Starting
   

   We have determined that for the next 18 months, we need an office space that can accommodate our growing operation. We’ve retained the services of Baljit Siekham from Alchemy Organizing to help us find and move into our new space. She’s got a lot of experience helping organizations of all sizes move into new space, furnish it and make the most of the space. We’re looking for space in South Vancouver, North Richmond and South Burnaby.

4. Project Management Software – Found
   

   As we grow, we need to kick our project management up a notch – more systematic and more organized. To accomplish that, we’re bolstering our Google Apps back end with Basecamp HQ. We’ve only been using the system for a few weeks but it’s great. Allows us to assign discreet project tasks to the team more clearly and lets us open up the project to our clients. Our clients and the team seem to be picking up on Basecamp really quickly. We’re looking forward to exploring this tool in more depth and will write a full review of the service soon.

5. Mission and Values – Work in Progress
   

   When we set out to build this firm, I set out a goal to build the #1 management consulting firm in BC by 2020. I got challenged on this simple statement by a friend. He posed some questions and I have some answers:

   Why do you want to be the #1 management consulting firm in BC?
   

   It’s all about people and helping people to be extraordinary. Together, we’re smarter and more innovative than we are as individuals. As we grow into the #1 management consulting firm in BC, we’ll be a powerful force for good in this community. The better our market position is, the more flexibility we will have to give back to the community and to be agents of goodwill and great work.

   What makes you different?
   

   We want to help people build. We don’t just advise. We get our hands dirty. We’ll work alongside our clients to explore opportunities and build something extraordinary. We’ll work as hard as they do and take ownership of implementation.

   What are your values?
   

   We do not align ourselves to any political parties, religious organizations or “schools” of thought. We approach every opportunity with an open mind and no pre-conceived notions. Every project and client is important – no matter what the scope and scale of the work. Every client gets our best work.

   We believe that there’s no such thing as problems – just opportunities we can help our clients exploit. There is always room to innovate and come up with something extraordinary. Our goal is to exceed the expectations of every client.

As if life isn’t crazy enough these days, I’ve recently decided to start looking for my birth parents with my Mom’s blessing. My Mom and Dad have always been great and I’ve never felt very compelled to look for my birth parents in the past. I was adopted by my parents in 1978 at 10 days old. I don’t know what it’s like to not be adopted (I get that question all the time – “what’s it like to be adopted?”). My parents couldn’t have kids of their own and I was available so it worked out for all parties involved. I was, of course, the perfect child.

In recent years, I’ve had some questions about my birth parents. I don’t feel like there’s anything missing from my life but they’d be 49 this year and I’m curious to see what they’re like. In a way, I wish I could meet them without them knowing who I am because I feel there’s a lot that could go wrong but…. after my Mom encouraging me to look them up, I think I’m ready.

As with the rest of my life, I like to share everything with the people I know so in the spirit of full disclosure – here’s everything I have in terms of paperwork on myself:

If you click on the link, you can download the paperwork I came with after my adoption was finalized. It’s got some interesting stuff in there. Apparently my birth parents were hobbits. I’m 6′2″ so I’m not sure how that happened. I’m also getting the paperwork rolling with the government to access my original birth record. If my birth mother hasn’t locked down her records, her name will be on that form! Crazy!

I’ll post more on this when I find out some information. Just thought some of you might be curious to learn about this aspect of my life.

According to When Did You Join Twitter, I started messing around with the service 419 days ago. In these 419 days, I’ve seen a few trends and have been a little taken aback from the recent jump in popularity. Its membership has been growing exponentially since the start of 2009. I lump most of the people I follow into a few categories:

1. Twitter Shitters
   

   These are folks who tweet about everything that they’re doing every moment of the day. I just stopped following three such people because they were driving me up the wall with the inane shit that they were posting. These people say that they’re the “real” users of the service. I think they just have too much time on their hands and an over-inflated sense of their own importance. I liken them to LinkedIn “LIONS”. [READ] They don’t really get what the tool is for.

   

2. Lurkers
   

   There have been a lot of studies coming out this week analyzing Twitter’s users. [READ] One interesting stat is that 40% of Tweeters never tweet again after their first day. Some studies are chalking this up to people who have forgotten their login information but I think they’re actually lurkers – people who like to read the tweets but never respond and never tweet. They’re like eStalkers.

3. Marketing Guys
   

   Someone in the last year put the bug in the ear of marketers that Twitter is a great platform for pushing your wares. Pho Citi Noodles (@phociti) in LA is a prime example. This Vietnamese restaurant tweets many times a day trying to get people to come in and eat at their restaurant. I don’t know how effective this kind of strategy is. It actually seems kind of dumb to me.

4. SEO Junkies
   

   I think I fall into this category. SEO Junkies are typically bloggers that are looking to increase the exposure of their blog to the masses by using whatever means possible. I have a plugin for my Wordpress blog that automatically tweets for me when I publish a new blog post. I see Twitter as a platform to increase my exposure and I follow a number of people who use Twitter in the same way. I find their tweets useful and informative and to be frank – I’m glad these people don’t post about what they had for lunch.

5. Facebook Lite Users
   

   The last category I would put people in are Facebook lite users who see the Twitter platform as a social networking tool. I’ve certainly responded to people who reach out to me via Twitter. I’ve had people in the last week as me for recommendations on moving companies, research methodologies, baby strollers and the like. I don’t mind answering these questions with a short reply or direct message. I think this is what Twitter’s founders were probably envisioning when they created the tool back in 2006.

Don’t get me wrong – I’m still not convinced that Twitter is a mature communications tool – especially when compared to other social networking platforms like LinkedIn or Facebook. It’s an interesting tool though and I’ll continue to play around with it. If I end up roaming into category 1 or 3, someone kick me.