Chris Kortschot
Gone are the days when a company could give a description of their product or service, provide a phone number or website, and pass it off as strategic marketing. It is becoming harder and harder for companies to find creative ways to stand out in the sea businesses begging for attention.
For a marketing communication to stand out from the crowd it has have something that marketers are only now getting their heads around. The best way to get a consumer to remember your product, brand, or whatever you are advertising is to make them want to remember.
Until now, marketing has been the act of coercing or tricking the audience into paying attention and then doing this as many times as it takes for them to remember you. It does not take the creators of Old Spice Guy to see why this model is a little bit flawed.
There are too many ways of giving users enough value to make them voluntarily remember your name for there to be any need for force. Value in this case is being defined as anything that makes the listeners life better regardless of how small.
Value can be delivered in an almost endless variety of ways which is because at the end of the day, people are easy to please. Give them something to chuckle at and they will do the same for you; give them something with no strings attached and they will attach the strings themselves.
Just as you feel the need to pay someone back you feel indebted to, the market respects companies that truly put their customers first and will in time pay it back.
The idea of paying it forward does not only apply to person to person interaction. Humans have a desire for respect and if they are shown that by a corporation, it carries the same feelings they would get from a person.
Thursday, September 16, 2010
Wednesday, September 15, 2010
Asset Sale vs. Share Sale -- Do you know the difference?
There is a lot of confusion when it comes to understanding the difference between an asset sale and a share sale in Canada so here is a brief explanation for those that do not know.
The overriding idea here is that sellers want to sell shares and buyers want to buy assets. There are a few reasons for this but most of them are tax related.
When the shares of a corporation are sold, everything from the company name to the liabilities are transferred including assets and the employees. Absolutely all parts of the organization are transferred between parties without exception.
Why is this better for the seller and worse for the buyer? One reason is because of unknown liabilities. It is possible for a corporation to be sold without the buyer’s knowledge of some future liabilities such as unfiled lawsuits or upcoming audits. Although the issue may be the fault of the previous shareholders, corporations are entities that are separate from owners and will be held accountable.
That being said, if the seller behaved fraudulently they may be held accountable however, there is no guarantee that you will be able to find them and settle accordingly.
Finally, one of the strongest reasons for a corporation’s owners to want to sell shares is because of the $750,000 per person Canadian Capital Gains Exemption on the sale of a qualifying small business shares.
If you have capital gains from the sale of shares, up to $750,000 of exemption is available for deduction against such gains. If you are unsure whether you qualify for this exemption check with your accountant and find out.
On the other hand, when the assets of a corporation are sold, all of the liabilities and tax filings remain with the corporation. In this case the buyer assumes no responsibility for the prior activities or filings of the corporation.
When assets are sold they are sold at current fair market value. This usually gives the new buyer a higher tax cost base for the assets to be written off over time compared to the depreciated value remaining on a corporation’s books after several years.
Finally, when you sell assets, the seller must swear under oath that all of the liabilities have been paid before the sale can go through.
These are only a few of the reasons that sellers want to sell shares and buyers want to buy assets but it should provide an understanding of some of the fundamental differences.
The overriding idea here is that sellers want to sell shares and buyers want to buy assets. There are a few reasons for this but most of them are tax related.
When the shares of a corporation are sold, everything from the company name to the liabilities are transferred including assets and the employees. Absolutely all parts of the organization are transferred between parties without exception.
Why is this better for the seller and worse for the buyer? One reason is because of unknown liabilities. It is possible for a corporation to be sold without the buyer’s knowledge of some future liabilities such as unfiled lawsuits or upcoming audits. Although the issue may be the fault of the previous shareholders, corporations are entities that are separate from owners and will be held accountable.
That being said, if the seller behaved fraudulently they may be held accountable however, there is no guarantee that you will be able to find them and settle accordingly.
Finally, one of the strongest reasons for a corporation’s owners to want to sell shares is because of the $750,000 per person Canadian Capital Gains Exemption on the sale of a qualifying small business shares.
If you have capital gains from the sale of shares, up to $750,000 of exemption is available for deduction against such gains. If you are unsure whether you qualify for this exemption check with your accountant and find out.
On the other hand, when the assets of a corporation are sold, all of the liabilities and tax filings remain with the corporation. In this case the buyer assumes no responsibility for the prior activities or filings of the corporation.
When assets are sold they are sold at current fair market value. This usually gives the new buyer a higher tax cost base for the assets to be written off over time compared to the depreciated value remaining on a corporation’s books after several years.
Finally, when you sell assets, the seller must swear under oath that all of the liabilities have been paid before the sale can go through.
These are only a few of the reasons that sellers want to sell shares and buyers want to buy assets but it should provide an understanding of some of the fundamental differences.
Tuesday, September 14, 2010
Why The Internet Will Fail
The following is a repost of a 1995 Newsweek article written by Clifford Stoll predicting the demise of the very same internet you are using right now. It is interesting to see how wrong someone could have been a mere fifteen years ago. Enjoy!
Clifford Stoll
After two decades online, I’m perplexed. It’s not that I haven’t had a gas of a good time on the Internet. I’ve met great people and even caught a hacker or two. But today, I’m uneasy about this most trendy and oversold community. Visionaries see a future of telecommuting workers, interactive libraries and multimedia classrooms. They speak of electronic town meetings and virtual communities. Commerce and business will shift from offices and malls to networks and modems. And the freedom of digital networks will make government more democratic.Baloney.
Do our computer pundits lack all common sense? The truth in no online database will replace your daily newspaper, no CD-ROM can take the place of a competent teacher and no computer network will change the way government works.
Consider today’s online world. The Usenet, a worldwide bulletin board, allows anyone to post messages across the nation. Your word gets out, leapfrogging editors and publishers. Every voice can be heard cheaply and instantly. The result? Every voice is heard. The cacophany more closely resembles citizens band radio, complete with handles, harrasment, and anonymous threats. When most everyone shouts, few listen. How about electronic publishing? Try reading a book on disc. At best, it’s an unpleasant chore: the myopic glow of a clunky computer replaces the friendly pages of a book. And you can’t tote that laptop to the beach. Yet Nicholas Negroponte, director of the MIT Media Lab, predicts that we’ll soon buy books and newspapers straight over the Intenet. Uh, sure.
What the Internet hucksters won’t tell you is tht the Internet is one big ocean of unedited data, without any pretense of completeness. Lacking editors, reviewers or critics, the Internet has become a wasteland of unfiltered data. You don’t know what to ignore and what’s worth reading. Logged onto the World Wide Web, I hunt for the date of the Battle of Trafalgar. Hundreds of files show up, and it takes 15 minutes to unravel them–one’s a biography written by an eighth grader, the second is a computer game that doesn’t work and the third is an image of a London monument. None answers my question, and my search is periodically interrupted by messages like, “Too many connectios, try again later.”
Won’t the Internet be useful in governing? Internet addicts clamor for government reports. But when Andy Spano ran for county executive in Westchester County, N.Y., he put every press release and position paper onto a bulletin board. In that affluent county, with plenty of computer companies, how many voters logged in? Fewer than 30. Not a good omen.
Point and click:Then there are those pushing computers into schools. We’re told that multimedia will make schoolwork easy and fun. Students will happily learn from animated characters while taught by expertly tailored software.Who needs teachers when you’ve got computer-aided education? Bah. These expensive toys are difficult to use in classrooms and require extensive teacher training. Sure, kids love videogames–but think of your own experience: can you recall even one educational filmstrip of decades past? I’ll bet you remember the two or three great teachers who made a difference in your life.
Then there’s cyberbusiness. We’re promised instant catalog shopping–just point and click for great deals. We’ll order airline tickets over the network, make restaurant reservations and negotiate sales contracts. Stores will become obselete. So how come my local mall does more business in an afternoon than the entire Internet handles in a month? Even if there were a trustworthy way to send money over the Internet–which there isn’t–the network is missing a most essential ingredient of capitalism: salespeople.
What’s missing from this electronic wonderland? Human contact. Discount the fawning techno-burble about virtual communities. Computers and networks isolate us from one another. A network chat line is a limp substitute for meeting friends over coffee. No interactive multimedia display comes close to the excitement of a live concert. And who’d prefer cybersex to the real thing? While the Internet beckons brightly, seductively flashing an icon of knowledge-as-power, this nonplace lures us to surrender our time on earth. A poor substitute it is, this virtual reality where frustration is legion and where–in the holy names of Education and Progress–important aspects of human interactions are relentlessly devalued.
The Internet? Bah!
Clifford Stoll
After two decades online, I’m perplexed. It’s not that I haven’t had a gas of a good time on the Internet. I’ve met great people and even caught a hacker or two. But today, I’m uneasy about this most trendy and oversold community. Visionaries see a future of telecommuting workers, interactive libraries and multimedia classrooms. They speak of electronic town meetings and virtual communities. Commerce and business will shift from offices and malls to networks and modems. And the freedom of digital networks will make government more democratic.Baloney.
Do our computer pundits lack all common sense? The truth in no online database will replace your daily newspaper, no CD-ROM can take the place of a competent teacher and no computer network will change the way government works.
Consider today’s online world. The Usenet, a worldwide bulletin board, allows anyone to post messages across the nation. Your word gets out, leapfrogging editors and publishers. Every voice can be heard cheaply and instantly. The result? Every voice is heard. The cacophany more closely resembles citizens band radio, complete with handles, harrasment, and anonymous threats. When most everyone shouts, few listen. How about electronic publishing? Try reading a book on disc. At best, it’s an unpleasant chore: the myopic glow of a clunky computer replaces the friendly pages of a book. And you can’t tote that laptop to the beach. Yet Nicholas Negroponte, director of the MIT Media Lab, predicts that we’ll soon buy books and newspapers straight over the Intenet. Uh, sure.
What the Internet hucksters won’t tell you is tht the Internet is one big ocean of unedited data, without any pretense of completeness. Lacking editors, reviewers or critics, the Internet has become a wasteland of unfiltered data. You don’t know what to ignore and what’s worth reading. Logged onto the World Wide Web, I hunt for the date of the Battle of Trafalgar. Hundreds of files show up, and it takes 15 minutes to unravel them–one’s a biography written by an eighth grader, the second is a computer game that doesn’t work and the third is an image of a London monument. None answers my question, and my search is periodically interrupted by messages like, “Too many connectios, try again later.”
Won’t the Internet be useful in governing? Internet addicts clamor for government reports. But when Andy Spano ran for county executive in Westchester County, N.Y., he put every press release and position paper onto a bulletin board. In that affluent county, with plenty of computer companies, how many voters logged in? Fewer than 30. Not a good omen.
Point and click:Then there are those pushing computers into schools. We’re told that multimedia will make schoolwork easy and fun. Students will happily learn from animated characters while taught by expertly tailored software.Who needs teachers when you’ve got computer-aided education? Bah. These expensive toys are difficult to use in classrooms and require extensive teacher training. Sure, kids love videogames–but think of your own experience: can you recall even one educational filmstrip of decades past? I’ll bet you remember the two or three great teachers who made a difference in your life.
Then there’s cyberbusiness. We’re promised instant catalog shopping–just point and click for great deals. We’ll order airline tickets over the network, make restaurant reservations and negotiate sales contracts. Stores will become obselete. So how come my local mall does more business in an afternoon than the entire Internet handles in a month? Even if there were a trustworthy way to send money over the Internet–which there isn’t–the network is missing a most essential ingredient of capitalism: salespeople.
What’s missing from this electronic wonderland? Human contact. Discount the fawning techno-burble about virtual communities. Computers and networks isolate us from one another. A network chat line is a limp substitute for meeting friends over coffee. No interactive multimedia display comes close to the excitement of a live concert. And who’d prefer cybersex to the real thing? While the Internet beckons brightly, seductively flashing an icon of knowledge-as-power, this nonplace lures us to surrender our time on earth. A poor substitute it is, this virtual reality where frustration is legion and where–in the holy names of Education and Progress–important aspects of human interactions are relentlessly devalued.
Monday, September 13, 2010
What Can Be learned from New Digg’s Failure?
Chris Kortschot
For those of you who don’t know Digg is (was) a social media site in which users or Diggers submit news articles, funny stories, new memes, and then vote or Digg the ones they like. The end result is that stories with the most Diggs rise to the top and are typically much more interesting than the stories with fewer Diggs.
It is a fantastic idea that has become the foundation of many other sites on the web. The main draw for users is the fact that they are being given news by other normal, typically unbiased citizens. It is something that you cannot truly get in conventional media.
Recently, Digg launched the much anticipated New Digg or Digg v4 and no one could have anticipated the result. For lack of a more descriptive phrase it crashed and it burned. As an avid Digger myself, I was devastated by the complete lack of functionality, design, and most importantly content that I had come to expect on my most frequented site.
But in addition to being devastated by the internet giant, I was completely shocked that they could make such enormous mistakes. Hadn’t they done their homework? Didn’t they realize how much the Digg community depended on an unbiased source of news and comedy?
What happened to Digg is not unique and is common in company or product overhauls. Digg hired the best people to make the best site. Sounds like a good idea doesn’t it?
Sure you always want the best people but it is important to remember that just because they are the best does not mean they know what is right. The end user is the only one who can tell you what is right or wrong and the day you come to believe that you are smarter than them is the day you lose them as a customer.
Digg did the homework. They knew what made Diggers come back five times a day. But their fatal flaw was that they disregarded those ideas and decided that they knew best.
Since the launch of New Digg a couple weeks ago, their traffic has plummeted, the total Diggs per day has dropped off considerably, and their competitors are soaring ahead. At this point the only way for the internet mogul to get back on its feet is the same way they got their in the first place; by listening to their customers!
For those of you who don’t know Digg is (was) a social media site in which users or Diggers submit news articles, funny stories, new memes, and then vote or Digg the ones they like. The end result is that stories with the most Diggs rise to the top and are typically much more interesting than the stories with fewer Diggs.
It is a fantastic idea that has become the foundation of many other sites on the web. The main draw for users is the fact that they are being given news by other normal, typically unbiased citizens. It is something that you cannot truly get in conventional media.
Recently, Digg launched the much anticipated New Digg or Digg v4 and no one could have anticipated the result. For lack of a more descriptive phrase it crashed and it burned. As an avid Digger myself, I was devastated by the complete lack of functionality, design, and most importantly content that I had come to expect on my most frequented site.
But in addition to being devastated by the internet giant, I was completely shocked that they could make such enormous mistakes. Hadn’t they done their homework? Didn’t they realize how much the Digg community depended on an unbiased source of news and comedy?
What happened to Digg is not unique and is common in company or product overhauls. Digg hired the best people to make the best site. Sounds like a good idea doesn’t it?
Sure you always want the best people but it is important to remember that just because they are the best does not mean they know what is right. The end user is the only one who can tell you what is right or wrong and the day you come to believe that you are smarter than them is the day you lose them as a customer.
Digg did the homework. They knew what made Diggers come back five times a day. But their fatal flaw was that they disregarded those ideas and decided that they knew best.
Since the launch of New Digg a couple weeks ago, their traffic has plummeted, the total Diggs per day has dropped off considerably, and their competitors are soaring ahead. At this point the only way for the internet mogul to get back on its feet is the same way they got their in the first place; by listening to their customers!
Wednesday, September 8, 2010
Why Now is the Best Time to Sell Your Business
Chris Kortschot
With the economy struggling to recover and economists predicting a 50% chance of a double dip recession you might be thinking, “I’ll weather the storm and sell my business when the market comes back.” This is not illogical thinking. It is a good idea and would be the thought of many business owners looking to maximize their wealth for retirement.
Unfortunately there are a few other factors that need to be weighed when making a decision such as this.
As we all know the Baby Boomers are reaching the age where they are thinking about settling down and thinking about their last career; retirement. Baby Boomers are defined as being born between the years 1946 and 1964 making the youngest of the group a youthful 46.
This population boom will have far reaching consequences on many aspects of life for many years to come but how does it affect the business sale market?
There is no doubt that Baby Boomers are the ones who own the majority of businesses. There is also no doubt that almost every one of these business owners have recognized the fact they won’t be in charge forever. They will either hand the business to their children or sell it. Those (and bankruptcy) are the only possibilities in a business’s future.
What this means is that there is going to be a surplus of sellers in the very near future. In less than five years sellers will not be able to receive the money they could get today simply because there will not be enough buyers.
This means the time to sell is now!
If this message is new to you and you would like to figure out an exit strategy with us give us a call at 905 944 9779 ex 5. If you are not a business owner, maybe you know one could use this information! Pass it on!
With the economy struggling to recover and economists predicting a 50% chance of a double dip recession you might be thinking, “I’ll weather the storm and sell my business when the market comes back.” This is not illogical thinking. It is a good idea and would be the thought of many business owners looking to maximize their wealth for retirement.
Unfortunately there are a few other factors that need to be weighed when making a decision such as this.
As we all know the Baby Boomers are reaching the age where they are thinking about settling down and thinking about their last career; retirement. Baby Boomers are defined as being born between the years 1946 and 1964 making the youngest of the group a youthful 46.
This population boom will have far reaching consequences on many aspects of life for many years to come but how does it affect the business sale market?
There is no doubt that Baby Boomers are the ones who own the majority of businesses. There is also no doubt that almost every one of these business owners have recognized the fact they won’t be in charge forever. They will either hand the business to their children or sell it. Those (and bankruptcy) are the only possibilities in a business’s future.
What this means is that there is going to be a surplus of sellers in the very near future. In less than five years sellers will not be able to receive the money they could get today simply because there will not be enough buyers.
This means the time to sell is now!
If this message is new to you and you would like to figure out an exit strategy with us give us a call at 905 944 9779 ex 5. If you are not a business owner, maybe you know one could use this information! Pass it on!
Tuesday, September 7, 2010
The Necessity of Planned Obsolescence
Chris Kortschot
Planned Obsolescence is the act of intentionally creating products that will require replacement in the short to midterm and it is a topic that continues to divide corporations from their end users. The end user argument is that products should be made in the best possible way because that is what stimulates competition most and competition drives progress.
The corporation looks at this argument in a slightly more realistic way however. At the heart of technological progress there are invariably corporations with long term and short term needs. If these needs are not met then there ceases to be a corporation and the amount that they contribute to the total progress disappears.
The only way these needs can be met and the technological advancements continue is to get people buying the product. The companies that try to sell the perfect product will forget that people still have needs now and that a half solution is better than a perfect solution in the future.
If Microsoft waited until they created the perfect operating system we would not be working on the advanced machines we know today.
If consumers want corporations to drive technological progress then they must realize that what they are buying is not a single product; it is part of a series of products all with ever increasing technological achievements that would not have been possible if consumers did not originally buy version 1.
This is also true for every other part of the series as well. There would not be a version 3 if people didn’t buy version 2 and the only reason that people bought version 2 is because version 1 became obsolete.
The basic premise of this post is that if consumers want better products, then the current ones have to become obsolete at some point.
Planned Obsolescence is the act of intentionally creating products that will require replacement in the short to midterm and it is a topic that continues to divide corporations from their end users. The end user argument is that products should be made in the best possible way because that is what stimulates competition most and competition drives progress.
The corporation looks at this argument in a slightly more realistic way however. At the heart of technological progress there are invariably corporations with long term and short term needs. If these needs are not met then there ceases to be a corporation and the amount that they contribute to the total progress disappears.
The only way these needs can be met and the technological advancements continue is to get people buying the product. The companies that try to sell the perfect product will forget that people still have needs now and that a half solution is better than a perfect solution in the future.
If Microsoft waited until they created the perfect operating system we would not be working on the advanced machines we know today.
If consumers want corporations to drive technological progress then they must realize that what they are buying is not a single product; it is part of a series of products all with ever increasing technological achievements that would not have been possible if consumers did not originally buy version 1.
This is also true for every other part of the series as well. There would not be a version 3 if people didn’t buy version 2 and the only reason that people bought version 2 is because version 1 became obsolete.
The basic premise of this post is that if consumers want better products, then the current ones have to become obsolete at some point.
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