How would you best describe what you do?
Most of the clients that I service here are primarily owner-managed businesses, generating anywhere from $100,000 in gross revenue up to $50 million. My role is to ensure their income tax needs, and business planning needs, are fulfilled.
For the owners, we look at how much revenue the business is generating, how much profit is being made, how much the employees are costing, what their living requirements are, and help them plan in a way that helps them to build their wealth and pay lower taxes.
What is your top business advice for entrepreneurs?
For all the people I’ve helped over the years, I think it’s important to stress a good business plan. But even the best laid plan has to be adaptable. I do see a number of business owners that do not have a clear plan, or a reasonable time frame within which to accomplish their goals. Many often simply hope for the best year after year because they get too caught up in their idea or their product to step back and evaluate how well theor plan is working and realign their goals.
What are a couple of things that can quickly tank a business?
One, is growing too quickly, and not managing growth in a way that is sustainable. A big mistake is not knowing the difference between cash flow and profit. Businesses go bankrupt all the time, even though they have been profitable, because they weren’t generating enough cash to pay their debts. The main reason why this happens is that they tie up too much cash flow in their assets; both short-term assets like inventory and accounts receivable, and long-term assets like machines and equipment. Businesses that extend too much credit become dependent on the payment habits of their customers to generate enough cash to pay their debts as they come due.
Where does someone go if they want to create a business plan?
The accountant is one of the best resources for preparing a solid business plan. I think most people unfortunately don’t see their accountants as someone who should be involved in helping them prepare their business plan. The accountant can help you structure your thinking by asking the kinds of questions that lenders are likely to ask when evaluating your plan, as well as providing insights about how realistic your projections are, based on the experience they have with their other clients. Naturally, you can create your own business plan, but you should have an accountant review it. They’ll tell you whether or not your business idea is a viable one.
How do you parlay that advice with your own entrepreneurial experience?
I have an eBay store, buying and selling Canadian stamps. I’ve been a philatelist (stamp collector) for almost forty years. It’s a sideline business that is my alternative to an RRSP. It’s great because it doesn’t involve a large commitment of time.
But, in order for that business to be successful, you need to understand the market. When I started the business, I did a fair amount of research on eBay to figure out the niche, and which markets I could potentially serve with the knowledge I have. I noticed there weren’t a lot of established people doing what I was doing.
We were discussing cross-cultural understanding, and here many immigrants are setting up businesses. What can we learn from each other?
What I have noticed is that in some countries there is a much more expedient attitude to getting things done. In Nigeria, for example, it is commonly accepted that if you want something done quickly, you have to pay somebody off to do it. That’s not viewed as wrong or bad. It just is. Here in Canada, there’s an established process for obtaining administrative approvals and licenses. There is no opportunity to just jump the queue because you can pay for it. Newcomers to Canada can definitely experience some frustration at the degree to which business practices here are regulated and the amount of work that is required to comply with the laws.
We hear you will be representing the Sloan Group at the upcoming KSI conference in India. What are your expectations of the trip?
I’ll get to learn how accountants practice in India and what issues are faced by pratitioners there. I understand their approach to public practice is a little different. So that cultural exchange will better equip me to relate to clients in the Indo-Canadian business community. (Read More about on Sloan Partners and KSI here).
With over 19 years experience practicing accounting in places as diverse as Australia and Nigeria, as well as both the east and west coast of Canada, Chris McFetridge brings a truly international perspective to his role as a Sloan Partner. Having earned both his CPA and CA designations, Chris most enjoys the aspects of his job that allow him to interact with clients and the satisfaction that comes from watching them succeed.