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The Best Part of My Job

I met recently with a local businessman at The Riverbend Inn in Niagara-on-the-Lake.  It was our first meeting and it was a great one – spectacular food, great service and excellent conversation.  This gentleman has an amazing entrepreneurial success story.  He arrived to Canada from Europe as a young man with very little money and began working for a company in an industry he was passionate about.   He quickly impressed the owners with his work ethic and dedication and was fortunate to find a way to purchase the business.   He worked hard over the next decades to grow the company.  He lived modestly and invested heavily back into the company.  He was in a growing sector and worked hard to establish himself.  He made a couple of interesting statements that I took from the meeting:  (a) You can’t run a business and expect to outsource everything – you’re going to have to do the dirty work early and often  (b) There’s no value in paying yourself a high wage.  It’s better to keep your wage as low as possible and bonus yourself at the end of the year, when you have a sense for where things have ended up (c) having a winning attitude and being highly optimistic and passionate are critically important.   This stuff sounds so cliché but each time I sit down with someone who has started and grown a successful business I’m reminded of these basic steps. I am not sure if we’re going to be able to work with this individual (I hope so!) but regardless of what happens, it is always refreshing and inspiring to break bread with entrepreneurs and hear their stories  - it is truly one of the most amazing parts of my job!

CK

Asset Protection

In today's National Post, on page FP9, there was a comment piece on asset
protection written by Vern Krishna. Asset protection is simply organizing assets and transactions in such a way that assets are shielded on protected from future liabilities - be it from tax, creditor, shareholder or spouse. Mr. Krishna is Counsel at a large Bay Street law firm and also executive director of the CGA Tax Research Centre at the University of Ottawa. Krishna makes some very important points for consideration when determining what asset protection strategies should be explored to ones' unique
circumstances. He makes reference to a number of options for asset protection including incorporation, limited liability partnerships, limited partnerships, trusts and offshore structures. What really surprised me about this article is what Krishna did NOT mention!

Some of the most simple and cost effective asset protection strategies are provided onshore by Canadian insurance companies. Segregated funds and insurance contracts are creditor protected and simple strategies to implement into your overall financial planning strategy. Additionally,
Individual Pension Plans are a great alternative to RRSPs for business owners and incorporated professionals - and they too are creditor protected. Asset protections is only one element of the financial planning process. Whether you have $100,000 or $100 million, you need to have a
solid financial plan to guide you from where you are presently and where you want to be in the future. Perhaps most importantly, a dynamic financial plan will make sure you can navigate bumps along the way - like a potential creditor taking a run at your hard-earned money!

CK

When discussing Life Insurance Products, ScotiaMcLeod Investment Executives are acting as Life Underwriters representing ScotiaMcLeod Financial Services (Ontario) Inc.

Smarter Niagara Summit

The Region's Smart Growth/Economic Development arm (NEDCORP) under Mark Brickell's good work, have put together another Smart Growth Summit taking place this December 13th. Looks like a great program at a reasonable price ($106). Of interest to many will undoubtedly be the discussion on the downtown revitalization project in Niagara Falls. It will be interesting to see where that leads in the coming months with significant change on Niagara Falls city council. In light of municipal campaign issues around major development projects in Niagara - in downtown Niagara Falls and Port Dalhousie in St. Catharines, I think its important that we all work to encourage smart growth, consultation and cooperation between developers and the community to find balance in development. For info or to register online for the summit, please visit www.smarterniagara.com

CK

No Shelter From The Storm

I introduced Jamie Golombek, VP Tax & Estate Planning from AIM Trimark at a session the Niagara Community Foundation put together for financial and investment advisors. Jamie provided a fairly basic overview of personal giving and provided some concrete examples of how even a modest amount per week can amount to a significant donation with a minimal impact on net income thanks to tax deductibility. Some of Jamie’s most interesting comments however, were at the end of his presentation when he discussed charitable “tax shelters”. Jamie presented several cases where organizations had created receipts for amounts greater than the amount of the donation (or in his example, the purchase of art). “In every case, that these have gone before the courts, the CRA has won” Golombek told us. “If it looks to good to be true – it is, run from it.” he added. Golombek went on to explain that those who participate in such programs should expect to be audited. He mentioned an article in the Toronto Star exposing such a tax shelter scheme. While Golombek didn’t want to name the focus of the article (David Singh) it’s an interesting read and clearly illustrates the mechanics of just such a scheme.

Niagara Entrepreneur of the Year Award Nominees

I've had a few people ask me about the nominees for the Niagara Entreprenuer of The Year Award nominees and thought I might take an opportunity to list them. Some very dynamic individuals and interesting businesses. We wish them all the best of luck in the awards and in business.

CK

Carrie Aiello, "Know it All" Niagara
St. Anns

Bonnie Beres, Harmony on West
Port Colborne

Treesje Bjorgan, Creekside Monogram Shop
St. Davids

Paul Brodeur, Niagara Tools Limited
St. Catharines

Jeff Chesebrough, Innivity Marketing Group
St. Catharines

Reni de Verteuil, Henley Honda
St. Catharines

Douglas Frazer, Kwik Mix Materials Limited
Port Colborne

Ruedi Hafen, Niagara Helicopters Limited
Niagara Falls

Pam Huson, Professional Placements
Beamsville

Brigitte Kiecken, Biolyse Pharma Corp.
St. Catharines

Nancy Nigh, Gone to Pieces Quilt Shop
St. Catharines

Marty Petrullo, Great Escapes…A Candle and Flower Market
Niagara Falls

Charles Pillitteri, Pillitteri Estates Winery
Niagara on the Lake

Derek Rymarchuk, The Wedding Company of Niagara
Niagara Falls

Adam Shields & Jim Shields, The Business Link Niagara Ltd
St. Catharines

Frank Szewczyk, Horizon Architectural Systems
Grimsby

Ray & Trevor Thomas, Thomas TV Sales & Service Ltd.
Welland

Mike Thorne, Just Junk Inc.
St. Catharines

Peter Vieveen, R. C. Flagman Inc.
Welland

Shane Weaver, Red Griffin Martial Arts Studio
Grimsby

Taylor Wilson, J.J. Barnicke Niagara Ltd.
Niagara Falls

Carmelle Winslow, Greater Niagara Information Centre
Port Robinson

Antje Wirth, The Peanut Mill
St. Catharines

Slowing Time and Exploding Capital

We’re sponsoring the Niagara Entrepreneur of the Year Awards again this year. It is an event and a segment of the community that we’re pleased to support and recognize. The dictionary defines an entrepreneur as an innovator who organizes resources to realize opportunities. However, when I think through our clients, I have to tell you that they don’t organize resources – they harness, they maneuver and control them. The entrepreneurs I know are masters of their elements- slowing time, exploding capital and creating opportunity where none existed before. There is a history and a culture of resourcefulness, persistence and tenacity amongst Niagara’s entrepreneurs and I am confident that as we get to know our nominees over the next few months we will see that they exemplify these same traits. Jean and I are fortunate to come to work each day with Niagara’s most successful and affluent entrepreneurs. When I listen to my top clients share the secrets of their success, their stories always reach the same conclusion – that the rewards aren’t nearly as exciting as the journey.

Recession-Proofing: How Niagara Businesses Can Prosper from the Coming Slowdown

I wrote an article for Business Niagara's September issue on recession proofing. Here's an excerpt:

For the past decade we’ve enjoyed a booming economy in Niagara. Our manufacturing, tourism, wine, agricultural and commercial sectors enjoyed solid growth through the golden days of the late 1990s. At the same time our low-trading dollar made Canadian exports and travel here inexpensive and therefore attractive. The rapid expansion of Niagara’s tourism, wine and gaming sectors made Niagara one of the province’s hottest economies. Niagara was so seemingly untouchable that even as the nation started exhibiting the signs of recession Niagara managed to survive.
Unfortunately, the ride has ended. Recent interest rate hikes, increased competition from Asian economies, a strong Canadian dollar, high-energy costs and a coming requirement for passports for American visitors all point to an economic slowdown that could be especially challenging for Niagara.
Now I’m not an economist, but having worked with entrepreneurs and senior executives in planning and managing their personal and business finances, I have learned some important lessons.
While the extent of the slowdown remains to be seen, one thing that’s certain is that a tightening is in the offing. I believe there are key steps that would benefit almost any business during periods of reduced or negative growth.
The fact is that most businesses don’t experience critical financial challenges (e.g. bankruptcy) during recessionary periods. Tight times call for drastic measures so these businesses extend their payables and push their receivables; they deplete their inventories and overextend their credit facilities. Too often businesses survive the slowdown but face the real challenges on the upswing and often can’t fulfill new orders when things have improved. Too many businesses go bankrupt with work and contracts on the books.
The lesson I’ve learned from my smartest clients is that planning and proactivity on the front side of a slowdown are critical factors in riding out a downturn. These individuals have learned to anticipate and to prepare their businesses to weather the storm before they’re forced to react. The result? Businesses emerge leaner and stronger on an upswing.
These are the business owners who treat the recessions, downturns and slowdowns as opportunities to improve efficiency.
Obviously slowdowns have differing effects on Niagara’s industries. Manufacturers are going to feel the impact of a slowing US economy more than our service sector. Domestic travelers or even visitors from emerging markets like China could offset potential waning US demand for Niagara’s tourism sector from passport requirements.
It is important not to generalize about the specific impact of a slowdown on any Niagara sector or individual businesses, however, in the face of ‘macro’ trends, I believe there are steps that would benefit most businesses confronted with a slowing economy.

I continue on to offers steps to prepare and protect from a recession. I think it was a decent article and certainly generated some great disucssion and comments from clients and friends. I encourage you all to pick up a copy of Business Niagara it's a great magazine and always has decent info and profiles on Niagara Businesses.

CK

Welcome

Hi, I'm Chris Kruczynski, Investment Executive and Principal of The Marchand-Kruczynski Group and this is my blog site, Canada's first financial advisor blog. This site offers regular comment, perspective and special guest interviews into all things financial and more. Check back early and often,I'll be updating weekly and look forward to your feedback.

CK