Quite often a business plan is wrongly considered a series of more or less fictitious numbers, intended to reassure potential partners or investors. But the business plan allows entrepreneurs to verify that their idea holds the road and to develop assumptions for their project’s future. Based on the business plan, you can ask yourself a range of questions about every aspect of the creation and development of your business, and provide key answers. It thus becomes a management tool that helps you plan your success and, in the monthly following your startup, to determine whether your business is operating according to your expectations.

In the context of a business startup process (one to three years) and with a view to drafting your business plan, here is our experts’ advice.

Understand your readers

Following a ready-made formula presented in outlines offered on the Web or elsewhere doesn’t guarantee a good business plan. Your business plan must adapt to your target readers, whether a lender, an investor or a business partner. Ask yourself what factors to highlight to convince them of the credibility, interest and viability of your business project, and adapt your content accordingly. In most cases, your readers primarily want to understand the project and its development potential, and to validate its feasibility and the credibility of the entrepreneurs who will ensure its performance.

Demonstrate your knowledge of the market

You must demonstrate your understanding and knowledge of the target market, particularly through reliable and valid data. To support your credibility and your knowhow and to dictate the major directions of your positioning/development plan, you must be armed with a judicious market study. Many entrepreneurs do not consider the possible strategic and financial impact of a competitive market, or jump in without validating whether the target clienteles could be interested in their product or service. The market study then becomes the cornerstone to validate your business project’s viability. This data will also serve to establish your financial forecasts and your marketing strategy.

Remedy your weak points

Avoid being too optimistic and masking the project’s weak points. Certainly, the business plan must make the readers want to get involved and must be positive, but it must also be realistic and shed light on your project’s negative points and challenges. If you ignore the negatives, your readers could doubt reliability of the data and your transparency as an entrepreneur. Instead show how you will remedy the weak points.

Ensure the overall coherence of your data

Relying on overabundant figures and being too optimistic in your financial forecasts will not reassure your banker or your investors. A more realistic approach will allow the investor or the lender to understand your medium-term vision and will help you gain credibility. Don’t rely exclusively on forecasts to “sell” your idea, because the business plan is not only financial. Your qualities as an entrepreneur and the innovative aspects of your project will interest your readers. Beyond your financial forecasts, they will verify the coherence among sales, market share, costing (your production cost per product or service delivered), selling price and the necessary investment.

Know how to summarize your project

Many potential investors will have little time to read your plan. You must know how to summarize your project. A decision-making summary presenting your project as convincingly as possible and including the major factors that establish its credibility and relevance must necessarily be included in your document. It is a preferable to write this summary at the end, when you have mastered the subject perfectly. A good summary presented at the beginning of the document can convince the reader to be interested in the details of your business plan.

Finally, the business plan must establish convincing proof that the project is realistic. Although the projected timeline and the expected sales may vary in reality, a good business plan will acquire its full meaning by guiding the long-term operation of your business. It must be more than a report. It must be a management tool for the entrepreneur, taking the form of a solid argument stating where you want to go, how to get there and the best way to achieve it.

This article was co-written with Chantal Gravel, Senior Manager, Assurance (St-Georges).

In the 1990s, we sought to “satisfy” our customers, but today this is no longer enough. Our aim now is to provide them with positive and memorable “experiences”.

With over a decade of studies and established practises in customer experience, we are in an even better position to assess managerial progress and dispel the confusion that periodically arises regarding the difference between customer satisfaction and customer experience.

Over time, customer satisfaction was associated with the way customer contentment was targeted and measured in relation to customers’ expressed expectations, particularly concerning products, services and prices.

Emotional impact

This is still true, but we now know that customer satisfaction is only one analytical factor. The problem with most customer satisfaction measurements is that they only assess the organization’s response to the expectations expressed by its customers, but not the emotional impact of an experience, a relationship or a simple interaction.

Since emotional impact is an important vector, even the most important vector, of the decision to buy, we often are dealing with an incomplete picture, if we rely exclusively on the concept of customer satisfaction. Instead, customers must be provided with experiences that will not only meet their expectations and their needs, but generate positive emotions during different interactions between the customer and the organization.

While many customers may remain loyal to an organization due to their satisfaction, they may leave it if they find something better elsewhere. Recent studies have shown that 60% to 80% of customers claimed to be satisfied or very satisfied before leaving an organization for the competition! This means that, while customer satisfaction is an important step in the quest to generate value with outstanding service, it should not be the final objective.

Loyalty

In reality, an organization’s final objective with its customers is twofold: the customer’s intention to return (loyalty) and the customer’s propensity to recommend (recommendation). Walt Disney, who was in the avant-garde in many respects, especially concerning customer service, had already discerned these concepts in his day:

Do what you do so well that they will want to see it again and bring their friends. – Walt Disney

A well-considered and well-executed customer experience improves the organization’s chances of achieving its objectives, which have a strategic value beyond mere customer satisfaction.

Needless to say, building greater customer loyalty increases a customer’s short-term value (increase in the customer’s shopping cart of goods or services), as well as his or her long-term value (recurrence of purchases over the customer’s life cycle).

Become ambassador

In addition, the customers’ greater propensity to recommend the organization causes them to become ambassadors of this organization or its brand of their own free will, thus creating a powerful – and free – advertising tool!

During the past decade, a multitude of organizations have made the transition from a mentality of executing tasks to a mentality of providing experiences to their customers. We need only consider Apple, Amazon and Videotron, among others. These companies have left a positive imprint on their customers.

In a world where competition increasingly reduces the differences between products, prices and even services, dynamic organizations bet on the customer experience to stand out and stay competitive.

Did you know that the destruction of a building, as was the case for many properties in downtown Lac-Mégantic, is an actual disposition for tax purposes and can represent a heavy tax burden for the owner?

The destruction of a building represents an involuntary disposition for the purposes of the Income Tax Act. Very often, the proceeds of disposition come from the amount of insurance received as compensation. A capital gain or recaptured depreciation then could be realized and trigger a tax expense.

Fortunately, a tax election exists, commonly known as “replacement property election”, that allows a taxpayer to defer recognition of income or a capital gain when there has been an involuntary disposition of “former property” (destruction, expropriation or theft).

The main conditions required to exercise such a tax election are as follows:

• It is reasonable to conclude that the property was acquired by the taxpayer to replace the former property;
• The property was acquired by the taxpayer and is used by the taxpayer or a related person for a use that is the same or similar to the use to which the taxpayer or the related person put the former property.
• If the taxpayer or a related person used the former property to earn income from a business, the property must have been acquired for the purpose of earning income from the same or a similar business or for a person related to the taxpayer who uses it for this purpose.

A certain correlation or cause-and-effect relationship must exist between the involuntary disposition of the building and the acquisition of the new building. In particular, they must have the same physical features.

The tax authorities consider that the geographical location of the replacement property is not a determining factor. The replacement property thus could be constructed elsewhere than at the initial location of the subject property.

Finally, to be valid, such tax election must be made within 24 months of the end of the taxation year of the deemed disposition or destruction of the property.

Please do not hesitate to consult us if you have any questions about replacement property election or any other tax question.