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CSR for SMEs: Small businesses making a big difference

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CSR for SMEs: Small businesses making a big difference

Corporate social responsibility (CSR) is often seen as the preserve of large enterprises. From the outside, the CSR practices of large business often appear to be thinly veiled attempts to bolster brand image and resonate with their key demographics. However, CSR doesn’t have to be a cynical affair – or exclusive to enterprises.

Those who view CSR negatively should consider whether it’s better for companies to give with personal gain in mind, or not give at all. While businesses’ images absolutely benefit from effective CSR, this is rarely immediately reflected in their bottom lines. Jaded consumers are typically unswayed by one-off demonstrations of “altruism”. Over time, however, companies which prove themselves to be ethical, environmentally friendly or socially supportive, enjoy greater longevity and brand loyalty. Businesses which do not take causes seriously, or which hope to gain from “flash in the pan” shows of charity, rarely see meaningful gains from their CSR campaigns.

The benefits of ongoing, committed CSR practices are increasingly apparent to smaller businesses, too. The beauty of charitable or socially-minded programmes is that they are incredibly scalable and versatile. Businesses of all sizes can offset the more negative effects of their daily operations in a manner which is meaningful to them – and manageable for them. Just as long term CSR projects can earn large enterprises a positive reputation (while achieving positive outcomes for charities and communities), smaller businesses can also benefit from this “win-win” situation.

CSR Case Study: Fruitful Office

To illustrate the positive impacts of CSR in a SME (Small-to-Medium sized Enterprise), we’ve stepped into the world of Fruitful Office; an office fruit delivery company, currently running a successful programme Planting Fruit Trees in Africa.

For every fruit basket sold, the company has planted one fruit tree in Malawi. This location and this project were chosen for their productivity and potential benefits. Fruit trees grow quickly in this region, maturing in 3-5 years and producing reliably abundant harvests of fruit such as guava and papaya.

Working in association with RIPPLE Africa (a UK charity focussed on projects which engage local communities in Malawi), Fruitful Office provided seedlings, instructions and training for householders, schools, community groups and farmers. In some cases, equipment was provided, empowering Malawians to grow productive trees which would help generate sustenance and potential income.

Extending the project

In 2016, Fruitful Office took its CSR project further, working to combat deforestation in Muzuzu by planting fast-growing guava, papaya and senna siamea trees (the latter is an excellent source of firewood). The project was shaped by local government forestry staff – and through consultation with the local community. By working with communities directly, the fruit delivery business has been able to develop initiatives which generate real benefits, matching the needs of local people and dovetailing neatly with the company’s offering.

With customers in Europe and the UK becoming ever more environmentally responsible (especially in the wake of global movements such as the Extinction Rebellion), companies which use natural produce stand to win custom if they can negate their use of natural resources – and evidence this. Planting fruit trees to both support Malawian communities and reduce the effects of deforestation neatly demonstrates this SME’s understanding of shrewd CSR which simultaneously benefits society and supports business growth.

Surrey604 is an online magazine and media outlet based in Surrey, BC. Through writing, video, photography, and social media, we secure an intimate reach to the public. We promote local events and causes.

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Essential Agreements for Your Business

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Athiviraham-Anand

By Anand Athiviraham, Senior Associate
Watson Goepel LLP

What agreements do I need for my business?

A significant part of my practice involves advising clients on which agreements best suit their business needs and goals. Whether it’s two partners looking to start a new venture, a growing business looking to fundraise, or a more established entity negotiating an acquisition, they all need agreements that will protect them from risk and allow their businesses to flourish.

A bootstrapping business may not be in a financial position to put all necessary agreements in place before they launch their business, but it is still important that they understand that investing at least some money now can protect them from potentially incurring thousands in litigation costs later.

Following is an overview of some common agreements, why they are important, and how having the right agreements in place at the right time will benefit your business regardless of the stage of growth you’re at.

Shareholders’ Agreement

Any business involving two or more owners should get legal advice on drafting a shareholders’ agreement as early in the process as possible, ideally at the time of incorporation. Starting a new venture often involves a ‘honeymoon’ period during which the owners are getting along very well and are fully engaged and bringing new ideas to the table. It is not uncommon during this stage for owners to take their good relationship for granted, not anticipating the challenges that may follow.

Business partners, especially friends and family, can sometimes get into disagreements over seemingly trivial issues which, if left to fester, can cause anxiety and further confrontations as the business grows and becomes profitable. Therefore, the key consideration for any business involving multiple owners is to ensure that the expectations, responsibilities, rights and restrictions of each owner are clearly defined in a properly drafted shareholders’ agreement.

Critical discussion points may include:

  • what happens when one partner wants out of the business
  • whether each shareholder will need to provide a proportional amount of investment funds when the company needs cash
  • what happens to the shares on death or disability of one of the owners
  • non-competition/non-solicitation clauses to protect employees and customers
  • key-man insurance, which protects an owner’s family in the event of disability or death

The agreement can be designed to be as simple or as complex as necessary to minimize disputes, ensure clarity, and avoid misunderstandings between the parties, even if all parties are not in full agreement on all points at the outset. The agreement can always be tweaked in future, as the business evolves.

The absence of a shareholders’ agreement covering the most essential aspects of the relationship between the parties can allow a business to ultimately suffer from deadlock due to unresolved disagreements, and lead to costly litigation.

Non-Disclosure Agreement

Also known as an NDA or a confidentiality agreement, this type of agreement is important to have in place before you communicate with any suppliers or investors who may be privy to the core secrets and data that underlie your business. Without an NDA in place, third parties are under no inherent obligation to protect or maintain confidentiality around the information received, leaving little recourse for your business in the case of a privacy breach.

This agreement should be drafted prior to engaging in any substantive discussions with such third parties. Another option to a standalone NDA may include inserting tailored confidentiality clauses into other existing agreements. Your lawyer can help you decide which approach is best for your business.

Terms of Service/Privacy Policy

Terms of service and privacy policies have grown in importance as many businesses have incorporated an online presence where they may sell their products or services, and/or collect personal information about visitors to their website. These agreements are often paired together as the terms of service identifies any key sales terms and general use of the business’ website, while the privacy policy informs the visitor on how their information, whether through the use of forms or cookies placed on the end-user’s browser, is collected, maintained, and handled.

Strong terms of service and privacy policy agreements are especially important for a business engaging in online commerce, as privacy and use of data is subject to a variety of jurisdictional laws, such as ensuring international compliance with GDPR.

Employment / Independent Contractor Agreement

Any business hiring an employee or engaging the services of an independent contractor (also known as a freelancer) should require that the party being hired sign an appropriate employment agreement document. This protects the business not only from potentially incurring thousands in unforeseen severance obligations should the employee be terminated in future, but also protects any intellectual property developed through the course of the employee’s duties to the business.

Businesses will also want to ensure that independent contractors are responsible for self-reporting any tax liabilities to the Canada Revenue Agency, are adequately protecting confidential information from falling into the wrong hands, and that any out-of-pocket expenses are pre-approved by the business.

These agreements should be drafted and adopted prior to the hiring of the third-party, as it is very difficult to implement once the relationship has commenced.

Subscription Agreement

If a business in the growth phase is looking to fundraise, either from third-party investors, friends, or family, a subscription agreement is essential to ensure appropriate compliance with securities laws.

Many private businesses are unaware of the strict securities laws governing how non-founders can invest in the business. The broad eligibility categories for any person looking to invest in your company include:

  • accredited investors
  • friends/family/business associates
  • minimum investment threshold by an individual

If a business decides to raise money from third parties without carefully obtaining legal advice, they risk severe penalties and potentially even jail time. Before considering or accepting any external funds, ensure your lawyer is qualified to advise you of the necessary requirements under securities law that govern your business.

Tips for Good Agreements

A poorly drafted agreement can cause more headaches than it’s worth, not to mention potential litigation should interpretation of the agreement come into question. Non-lawyers should avoid drafting their own agreements, even if it may seem convenient or expedient to do so, as a variety of laws and case precedents may be applicable to the agreement and can undermine its enforceability and legality.

Having an agreement drafted by a lawyer does not automatically ensure that it is a “good” agreement. A lawyer who is not fluent in business law may provide a document that is substandard. A good agreement should demonstrate a deep and nuanced understanding of the relevant laws, be formatted clearly, and use concise language when possible without the need for extraneous legalese. It should contain a section that defines terms, which should then be used consistently throughout the agreement. For example, we often encounter capitalized terms used in agreements that lack any proper definition and for which the context remains ambiguous.

Where applicable, commercial agreements should include:

  • details on the length of the term of the agreement
  • renewal provisions
  • clear pricing and payment provisions
  • termination clauses (and identify the effect of any termination)
  • data ownership/intellectual property aspects relating to the business
  • appropriate indemnities to help prevent the need to go to court for enforcement

Alternative dispute resolution and jurisdiction are also important considerations that should be discussed, since they also have the potential to avoid costly litigation.

Conclusion

Businesses may be hesitant to incur legal fees, especially at the outset, for obvious reasons. While certain agreements can be appropriately postponed until they are truly necessary for the business, some of the essential agreements covered here are important to discuss and implement sooner rather than later to ensure your business avoids potentially costly litigation and is well-protected for the future.

Anand Athiviraham is a Senior Associate in the Business Group at Watson Goepel LLP and focuses on advising entrepreneurs at all stages of their business. He works from both the firm’s downtown Vancouver office and its Surrey location.

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Three Compelling Reasons to Outsource Your Bookkeeping Work

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If you’re a small business owner, you would have very likely contemplated the idea of outsourcing your bookkeeping work.

Hiring your own bookkeeping and administrative team to handle year-round bookkeeping takes A LOT of work. And this can be incredibly costly.

For example, the average hourly wage in BC to hire a bookkeeper is roughly $21 an hour. according to Payscale. As a full-time employee at 40 hours per week, you’re looking at $3,300 per month, or $40,000 a year.

On the most conservative level, this is at least 50% more expensive than outsourcing it to a bookkeeping firm – and that’s only from a cost perspective.

Below, we lay out three compelling reasons for you should outsource your bookkeeping to a bookkeeping firm:

1. Outsourcing your bookkeeping does the job at a cheaper price

As we mentioned above, outsourcing your bookkeeping can still help you accomplish what needs to be accomplished, albeit at a lower cost.

Hiring one in-house bookkeeper would cost a business roughly $40,000 per year, and that’s before any employee benefits and payroll costs like CPP & EI.

If we compare this cost to outsourcing it to an online bookkeeping firm like Rooks, you’ll see the huge difference in cost savings:

Looking at Rook’s tiered pricing model, we can see that the ‘Essential’s’ tier goes for $199 USD/month, while the highest pricing tier costs only $899 USD/month, making out to be $2,400 USD and $10,800 per annum respectively.

That means the average small business owner saves between $19,000 – $30,000 per year by outsourcing their bookkeeping!

The reason as to why bookkeeping firms are so much cheaper is simple.

As bookkeeping firms are doing the same work for hundreds of clients, they are able to build a streamlined work-flow and process that allows the bookkeeping firm to work at a much more efficient rate, an advantage called the economies of scale.

Furthermore, an in-house bookkeeper’s work is often redundant: their job often entails reconciling the books once per day, while most bookkeeping firms do it once a month (although it can be shorter depending on what the scope of work is).

This drastically increases the inefficiency rate for an in-house bookkeeper, as they have to go through the same reconciliation process thirty times more often than a bookkeeping firm that would otherwise do it once per month.

Obviously, the benefit for the small business owner here for hiring an in-house bookkeeper is that it’d then be possible to get financial data that is updated daily – but the argument is whether the additional $19K-$30K cost is worth having the daily financial data. The answer, generally, is that it’s not worth the cost for a small business owner because daily financial data is a LOT less actionable for a small business than it’d be for an enterprise.

As a small business, your opportunity cost with money is too high. The $19K-$30K cost savings could instead go into other aspects of expanding your business operations, which is probably a much better use of your money!

2. Advisory and Peace of Mind

One of the biggest advantages of outsourcing your bookkeeping work is that you’ve essentially hired a whole firm of financial experts who oftentimes know more about the numbers than you do!

Personally, at our own firm, we offer a free half-hour meeting each month, where we sit down with our clients to go over their financial statements and KPIs, as well as areas for improvement.

Our clients often bring their own financial questions which we would provide advice for, such as, “What can I do to improve my net income”, or “Why does the income statement say I have a net income for June, but my bank account has less money this month?”.

If you had to hire a financial consultant to answer these questions for you at $50-$100/hour, you would’ve already got your $200/mo money’s worth by having us answer those questions instead!

I probably don’t have to tell you why it’s important to have an advisory board for your business, but if you don’t already have one, reaching out to a bookkeeping firm for advice is already a good start. They’ll have the experience and financial expertise in different business matters that your in-house bookkeeper often wouldn’t have.

3. Scaleability

As your business grows, your bookkeeping team will need to grow along with it.

Having one in-house bookkeeper may be sufficient for now when you’re handling $10,000 in monthly revenues, but what about at $100,000 monthly revenues or $1,000,000?

Imagine the work it’d take to manage a team of in-house bookkeepers, and the risk you entail by doing so.

And not only that – but what if your bookkeeper suddenly decides to quit one day?

As you can see, there are a lot of risks and headaches involved with having an in-house bookkeeper, especially as your business scales.

By hiring a bookkeeping firm, you’re essentially letting them handle all that hassle and responsibility.

Conclusion

More often than not, it just doesn’t make sense for a small business owner to hire their own bookkeeper.

There’s too much work involved, too much responsibility, and too expensive.

While there are some benefits to hiring your own bookkeeper, such as daily financials, the costs and efforts of doing so are simply too high.

At Rooks, we have a team of expert bookkeepers who are able to handle your books in Quickbooks Online. We’ll take away the headache of managing your books, at a lower cost! Try Rooks now.

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Top 5 Fintech Companies in Canada

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After years of slow growth, the Canadian fintech sector is getting bigger and livelier. It defied expectations as half of the nation’s population is now digitally active, according to Ernst & Young’s Global Fintech Adoption Index 2019.

Furthermore, our friends at Fortunly attest that Canada is among the first nations to embrace Bitcoin. The legalization of the pioneering digital coin in the country has emboldened homegrown innovators to explore the potential of blockchain and cryptocurrency in order to achieve strategic business goals.

The best example is Kik, Canada’s only unicorn. In 2017, the chat platform launched an initial coin offering and successfully raised about $100 million from the token sale.

Dozens of startups currently populate the growing fintech ecosystem of Canada. Although most of them position themselves as alternatives to traditional financial institutions, there are some that provide innovative solutions directly to bankers.

Below are the top 5 fintech companies that actively collaborate with banks.

1:  Mobi724

Mobi724 facilitates credit card payments on all devices or point of sale systems. It empowers banks to deploy traditional and mobile payment terminals anywhere.

The company also specializes in Payment Card Industry Data Security Standard compliance, customer engagement and retention, and data monetization.

Mobi724’s turnkey business intelligence solutions help financial institutions understand their customers by analyzing purchase patterns and online behaviours.

Moreover, the Montréal-based company assists credit card issuers in launching measurable marketing campaigns and implementing painless online-to-offline loyalty point redemption programs to delight shoppers.

2:  Salt Edge

Salt Edge is one of country’s leaders in open banking. The company’s financial API (application programming interface) platform builds bridges between banks both in and outside of Canada.

Using Salt Edge’s products, traditional bankers can be on par with the world’s most innovative financial institutions, expand their international footprints, and stay competitive in the ever-evolving digital landscape.

Apart from granting customers access to their accounts, no matter where they are, Salt Edge–affiliated banks can also extend financial management tools to induce loyalty among their customers.

The company’s white label retail banking solution makes it easier for ordinary consumers to consolidate all bank accounts, set budgeting and saving goals, seek expert advice, and receive auto-debit warnings and other useful notifications through one app.

3:  NamSys

NamSys strives to keep cash alive and relevant in the digital age. Its software solutions render cash processing super-efficient to help physical currencies remain competitive despite the growing pervasiveness of electronic payments.

Hailed as one of the promising Canadian fintech stocks in 2019, this publicly traded company offers fintech-driven cash vault management and deposit tracking solutions to give traditional banks a 360-degree view of their cash flow 24/7.

Connected to the cloud, its cutting-edge monitoring solution creates a frictionless process to manage extensive networks of smart safes more easily.

The company’s platform rationalizes interfaces and reports while giving banks the convenience of real-time activity tracking. It also provides remote configuration of software and firmware, and scheduling of safe updates.

4:  Sensibill

Headquartered in Toronto, Sensibill simplifies receipt management to help banks serve their commercial customers better. Through the company’s app, small business owners as well as freelancers can track expenses and comply with tax regulations, with little stress.

The company uses optical character recognition to distinguish printed and handwritten characters in photographed paper receipts. It utilizes deep learning artificial intelligence to structure more than 150 unique pieces of data found on receipts virtually in an instant.

Sensibill also helps self-employed professionals separate personal and business financial matters in one account more easily to save a ton of time on administrative work.

5:  Quandl

Another pride of Toronto, Quandl serves as a one-stop shop for financial data from conventional and alternative sources.

It shortens the path toward information monetization for businesses. The company utilizes advanced analytics and brings the datasets closer to interested parties through an API and custom libraries.

Its platform is being used by more than 400,000 professionals, including asset managers and investment bankers, worldwide.

After fueling historic auto sales, tech companies are poised to help financial institutions in the country to innovate and increase their revenues. Considering how quickly average Canadians have been adopting mobile and online banking solutions, it is only a matter of time before all traditional bankers join the fintech revolution on this side of the world.

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Top 5 Best Startups in British Columbia

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Startups in British Columbia

British Columbia is a top-notch location for startup businesses.

With its stable government that streamlined regulations, Vancouver alone is one of the best choices for investors from North America and beyond. In fact, this West-coast city is predicted to become a northern Silicon Valley.

While there are many challenges along the way, from capital to human resources, the startup scene is still thriving. And many of these startups are enjoying a steady rise.

Here are a few to keep your eye on:

Hootsuite

Hootsuite was founded by Ryan Holmes in 2008 with the aim to revolutionize the way humans communicate. It is a social media management platform based in Vancouver and it boasts more than 16 million users from all over the world.

Leveraging the popularity of social networking sites like Facebook and Twitter, Hootsuite is a valuable tool for many marketers who want an easier way to monitor their social media channels and send out messages across different platforms from one convenient place. The last few years saw Hootsuite’s tremendous growth with its strategic partnerships and various acquisitions.

In 2018 alone, the startup company raised $50 million in growth capital.

Corvus Energy

A leading supplier of safe and reliable energy storage solutions, Corvus Energy primarily serves all segments in the maritime industry, from cruise and ferry to tugs and workboats. Founded in 2009, this lithium-ion battery company based in British Columbia was ranked as third in Deloitte’s Technology Fast 500.

Its astonishing growth was apparent when it managed to increase its revenue by nearly 17,000 over a period of three years. The scramble for a cleaner energy source greatly contributed to this development, and Corvus has exploited the needs of the maritime sector.

Their target market alone depicts the difference between their success and the failure of other battery startup companies.

A Thinking Ape

Headquartered in Vancouver, British, Colombia, A Thinking Ape was the brainchild of two Amazon engineers, Kenshi Arasaki and Wilkins Chung. Their love for gaming led to the brilliant idea of binding the online community to gameplay. Their first creation was Kingdoms at War, which was famously described as a “thinly veiled RPG around a chatroom.”  It has then amassed a large following, becoming an instant success.

As a startup company, A Thinking Ape is a visionary. They build addictive mobile apps, with several of them featuring as bestsellers on both the Apple App Store and Google Play Store.  But their most rewarding accomplishment lies in engineering highly social experiences that have helped build communities. Groups of people who met in the gaming community actually went on to meet in real life, visiting Disneyland together and collecting more than $250k for disaster relief funds.

Founded in 2008, A Thinking Ape has become one of the top grossing developers in several app stores. It currently hosts 65 employees in its minimalist, but playful, office space in Vancouver.

LifeBooster

LifeBooster is one of the most interesting startups hailing from British Columbia. It was founded by Stacey Wallin and Brian Statham. This company is an open-innovation worker platform that promotes enterprise health and safety through integrating wearable technologies and industrial Internet of Things.

The innovative devices aim to prevent and mitigate workplace injury and health risks like heat-stroke, and MSD (musculoskeletal disorders) injuries. Through data gathered by the real-time monitoring system, employers can create personal disability management programs and health and safety training exercises. This can then minimize occupational hazards and bring down the cost of healthcare.

LifeBooster is one of the startups that many are closely paying attention to, mainly because of its potential to grow not just in Canada but also across the globe.

Finger Food

In 2009, Trent Shumay and Ryan Peterson led the foundation of Finger Food in the Tri-Cities area of British Columbia. Adapting to changing technologies, the company has delved into augmented and virtual reality to wearable technologies, blockchain, games, and even robotics. It is their mission to provide innovative solutions across different platforms for global companies.

One of their most impressive feats is delivering the world’s first production-holographic application with the use of Microsoft HoloLens. They have also ventured into retail by providing VR and AR experiences.

In Conclusion

These are only some of the promising startups in British Columbia. Their flourishing run is a testament to the business-friendly environment that British Columbia offers to startups–especially considering the fact that the majority of startup companies around the world typically fail to witness their 10th birthday.

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What does a Loan Shark Look Like?

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Loan Shark

Would you know how to spot a loan shark?

With a new study by Wonga reporting that there could be at least 40 000 mashonisas operating in South Africa, it is important that we know how to spot a ‘loan shark’ or mashonisa before we do business with them.

The stereotypical view is that loan sharks are ‘monsters’ – big, hefty and intimidating men who knock down doors to collect their debts. And in truth, there could be some like this out there operating in the country. However, it seems that many loan sharks are simply are like you or me, doing business in their community but simply being unregistered to do so. It appears that there are many thousands of ‘ordinary’ people operating as mashonisas and doing business somewhat fairly.

Brett van Aswegen, CEO of Wonga in South Africa, said: “There is no clear demographic that identifies a mashonisa – they aren’t all big scary men. They are ordinary people from the community who have some cash available and see this as a viable form of employment.”

It is important that you know the risks of using a loan shark should you decide to use one over a regulated and formal body. Wonga reports, “Mashonisas are illegal and unregulated which means their operating models are not impacted on by regulations and they incur no compliance costs in terms of the National Credit Act.” Their interest rates may also be higher than a formal lender.

The study conducted by Wonga does not seek to shame loan sharks or even scare people into not using them. In fact, it even suggests a complimentary business world where formal lenders operate alongside these unregulated companies. It says, “Mashonisas offer quick and easy access to small, short-term (less than one month) cash loans that are utilised by borrowers to manage their monthly cash flows.

They are typically used to finance immediate needs such as food, transport, cell phone airtime and pre-paid electricity, and less commonly used to finance unexpected once-off expenses such as funerals. The research suggests that informal credit is not always a substitute for formal credit and indeed that consumers access both at the same time, for different purposes.” One anonymous loan shark said he simply helps out a few people in his local area with money for necessities, because their salaries are so poor, according to EWN.co.za. He is not the ‘monster’ which loan sharks are often made out to be.

It is therefore important when seeking credit that you know exactly who you are dealing with before you sign any contract. Mashonisas may indeed have their place in our society; in fact, it appears they aren’t going anywhere any time soon, but it is still vital that you do your homework, check the company or person out, and if in any doubt, avoid using them completely. It is important to be ‘money savvy’ – i.e. know how much you need to borrow, for how long, and whether you can afford the repayments.

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