Smart finance solutions for your business!

Nov 22 , 2018 by Deb Sands

Every business owner needs equipment and technology for their day-to-day operations. However, you do not necessarily need to own the equipment.

For instance, owning a photocopier can be a financial burden for many small businesses. Aside from supply costs and maintenance fees, coming up with the initial capital to purchase the copier can stretch operational budgets beyond profitable limits. Copier leasing helps ease the up-front monetary investment and may also provide a number of other attractive benefits.

Copiers depreciate over time, losing their value due to use and to the constant introduction of newer, better technology. If your business purchases a copier, you can only upgrade in technology by investing in another new machine. You would also need to get rid of the previous model, adding to your time expenditure.

Rather than pay cash up front, a finance facility can give you much more control and flexibility. Whether you need a piece of computer software, a pizza oven, a tractor or even a snow plow, it is available for lease.

Calculating your costs when starting a business
As you may know, one of the most common causes of a new business failure is not having enough cash to meet expenses, especially in the first six to twelve months after start-up. But if you identify and plan for these costs, this is less likely to happen.

Calculate ongoing and one-time costs
Ensure you identify which costs will be one-time costs and which will be on-going. Some costs you may never have to cover again, while others may recur annually or every couple of years. It’s important to identify and budget for this early so you don’t get caught out in the future.

Set realistic expectations
As well as thinking about your start-up costs, also consider how long it will take until your business will open its doors and you will be generating revenue. Don’t set unrealistic expectations. If you get this wrong, costs can escalate quickly and you can find yourself under pressure to meet new costs without an income stream.

Overestimate costs
It’s better to over-estimate than to under-estimate. Many experts recommend adding 10% on top of your total costs to cover any miscellaneous expenses and unforeseen blow outs.

As I wrote earlier, every business owner needs equipment and technology for their day-to-day operations. However, a business does not necessarily need to own the equipment. Rather than pay cash up front, a finance facility gives you much more control and flexibility. Whether you need a piece of computer software, a pizza oven, telephone systems or even a snow plow, it is available for lease.

Leasing offers several advantages. Short-term leases allow businesses to explore new avenues without having to purchase expensive equipment for pilot programs. Leasing allows you to trade in your equipment periodically, staying current with the latest technology and trends.

The advantages keep on growing:

  • you don’t have to pay the full cost of the asset up front, so you don’t use up your cash or have to borrow money;
  • you have access to a higher standard of equipment, which might be too expensive for you to buy outright;
  • you pay for the asset over the fixed period of time that you use it, which helps you budget for the future;
  • as interest rates on monthly rental costs are usually fixed, it is easier to forecast cash-flow;
  • the leasing company can usually get better deals on price than a small business could and will have superior product knowledge

Keeping business equipment up-to-date with rapid advances in technology can quickly drain your capital. The right facility can give you the flexibility to upgrade your equipment.

Understanding the tax and accounting consequences and treatment of a lease is of primary importance.

This information is designed to provide a basic overview; applicability to specific situations would need to be determined through consultation with your professional accounting advisers. For more information.

This paper, which was written by the CFLA, will introduce some fundamental Canadian taxation and accounting concepts specific to the leasing industry. How leases are classified for tax purposes as either a capital or an operating lease will be discussed in addition to how a financial statement would record a capital lease from the perspective of both the lessee and the lessor. As well, the capital cost allowance system of tax depreciation will be reviewed.

For some commonly asked questions, I’ve written a Guide to help you decide what is best for your business.

Cash flow friendly payments

Clever finance solutions will help you manage your cash flow. With regular fixed payments, it’s easier to predict cash flow, and business capital is protected as you can access the equipment you need without large cash or capital outlays.

Tailor made finance

Flexible financing is our greatest strength. No two businesses have the same needs, so we can tailor a finance solution to meet your cash flow, timing and capital budget requirements.

Needless to say, efficiency translates to increased profit and a greater return on your lease investment.

For more information, please feel to contact me.

Keeping your Eye on the Bottom Line.

Jan 27 , 2017 by Deb Sands

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Whether you are in your last year of optometry school, or already practicing, opening your own optometry practice may be on your mind.

Fast facts*

  • The average Canadian optometrist in practice earns $70,000 to $80,000 per year, excluding benefits;
  • How long does an optometrist stay in the career? Typically life-long, until retirement;
  • There are approximately 3,000 practising optometrists in Canada.
  • Building an Optometric practice from the ground up can be the challenge of a lifetime. You’ll most likely have to borrow capital in order to start your new practice. This includes funding for build-out construction, equipment, inventory and working capital. The true cost of opening an optometry practice varies tremendously, usually equipment costs will be higher, depends on new vs used, purchase vs lease. Some costs to consider are:
  • size of your venture
  • number of exam lanes
  • equipment needed
  • inventory
  • number of employees and much more!

Starting your own practice can seem like a daunting feat. While there is no handbook that guarantees you success, there’s no shame in starting with less than what you may imagine for your ideal practice. Diagnostic technology can and should be added over time, based on your patient volume.

Many pitfalls can take a new business owner by surprise. Regardless of how long you’ve been in practice, recognizing and avoiding potentially costly errors is essential to laying a strong foundation for financial success.

Buying Too Much Too Soon 

When setting up shop, it can be tough to resist going on a shopping spree for the latest equipment, especially with the number of advances in eye care technology over the past decade. You’ve just finished studying about what equipment is out there, including:

·        Autorefractors

·        Fundus cameras

·        Tonometers

·        OCT Imaging systems

·        Digital test charts

·        Topographer

·        Keratometer

·        Lasers

·        Combi units

·        and Blocking / Edging equipment.

As a start-up business, which (if any) of these expensive pieces of equipment is needed in your new practice? Overspending on equipment is probably the biggest draw on start-up capital.

Start-Up and Overhead Costs:  When starting up a new practice, usually start-up costs include: capital costs for equipment and leasehold improvements. The majority of overhead costs arise from the inventory of lenses, frames, contact lenses and lens solutions.

Revenue Sources: Optometrists are paid at the time services are provided. An optometrist’s earnings are determined by several factors including: coverage under provincial medical programs, fee schedules, hours worked, practice location, services provided and patient population.

Based on initial patient volume, what is the cost vs. return and will it justify the expense? Will delaying the purchase of such equipment impact the long-term success of your practice?

Overspending on equipment is probably the biggest draw on start-up capital.

In fact, adding more equipment as the practice progresses may provide a great opportunity to reconnect with your returning patients.  However, it’s also important that you don’t go to the other extreme by investing as little as possible in frame inventory. It may lower your start-up costs, but it could also affect how patients perceive your practice and stunt your revenue growth.

As a growing company I’m sure you are constantly investing in new technology and equipment, but do you have an ongoing refurbishment program?

As a practice owner, you are essentially an entrepreneur. You need to take care of managing and marketing your business in addition to practicing optometry and maintaining good relationships with your patients.

The best businesses are usually run by people who are innovative, entrepreneurial and also have a keen understanding of how to look after their money and how to make it work for them with as little risk to them and their businesses as possible.

Buying vs. Leasing – What’s right for your Practice? 

It is as crucial to understand both when to invest and when to save, as how to invest and how to save. Study your options. Purchase vs. Leasing?

Obtaining state-of-the-art retinal imaging devices to incorporate into your practice sounds like a no-brainer. Right? Wrong. While it’s true most eye care professionals (ECPs) want to keep up with the latest technology and offer their patients the very best in diagnostics, it’s also true that these machines can be expensive. All of which begs the question: Is it worth buying or leasing?

If you are in the market for new retinal imaging devices you need to be careful with your selection. Does your purchase have trade-in value if newer technology arrives? Are there maintenance costs? Will you obtain enough return on investment and improve efficiency with this new technology?  These are important questions to ask yourself before you invest your capital.

Devices that are likely to become outdated or that have poor software upgrades are not ones you want to purchase.   Ranging from the acquisition or relocation of a practice, a shop fitting revamp, new technological equipment, or simply a loan to meet your tax demand we have a solution to help. Contact us today to discuss how you can keep your “Eye” on the bottom line by learning which option is the best for you!

*Source: http://uwaterloo.ca/optometry