I’m Tracy Au and I have graduated from the Professional Writing program from university. I am an aspiring screenwriter, so this blog is used to promote my writing and attract people who will hire me to write for your TV show or movie.
I write a lot about writing, TV, movies, jokes, and my daily life and opinions. I have another blog promoting my TV project at www.thevertexfighter.blogspot.com.
Thursday, June 21, 2018
"Start STEM training"/ exiting business
Jan. 5, 2017 "Start STEM training early to overcome tech- talent shortage": Today I found this article by Rohan Mahimkar in the Globe and Mail:
Co-founder and co-CEO, Prodigy Game.
Is everything okay in Canada's tech scene? Many think so. Many global tech giants are building capacity in our major cities, and our startup ecosystem is proving increasingly lively and promising. Look no further than the Toronto-Waterloo corridor (aptly coined Silicon Valley North), where more than 5,000 Canadian startups have taken root, all led by talented entrepreneurs with ambitious ideas.
And while Canada boasts world-class universities with leading science, tech, engineering and math (STEM) programs and a growing funnel of VC and government-funding options for small businesses, most stories of Canadian tech are about funding or the "brain drain."
The deeper problem is that we have a serious shortage of tech talent to meet the booming job demand. It's a looming crisis: Startups like ours simply can't fill the jobs we have fast enough to meet our sales projections.
Almost every startup is actively looking for skilled and educated talent. Prodigy Game, the Burlington-based company I co-founded, would hire an additional 100 well-remunerated people to join our team today if only we could find them. We have the opportunity to sustain our rapid expansion, but we can't without the right manpower – and the sector is set to face a shortage of 220,000 tech workers by 2020.
Where's the tech talent?
It's easy to blame this shortage on the "brain drain" of Canadian talent moving down south – and it certainly exacerbates our situation – but the root of the issue is Canada's relatively low proportion of graduates emerging from STEM disciplines. In the recent Statistics Canada census, only 24.8 per cent of Canada's postsecondary graduates were from STEM fields. And that's despite STEM having the fastest rate of job growth in Canada (4.6 per cent yearly growth versus 1.8 per cent for the job market as a whole).
Our universities rank among the best in in the world (the University of Waterloo is dubbed Canada's MIT), but we're not doing enough to encourage and enable students to pursue the disciplines that are going to shape the future work force.
Why aren't enough Canadians graduating from STEM?
Last year, Canadian students ranked among the top performers in science – a stark contrast from math. In Ontario, half of Grade 6 students failed to meet provincial mathematics standards in 2017, compared with 81 per cent and 79 per cent meeting standards in reading and writing, respectively. The proof is in the numbers – students are increasingly struggling in a subject that has the power to open – and close – a lot of future doors.
The root of this is not an ability problem, but an attitudinal one. Math anxiety is very real in Canada, and it's passed down from generation to generation. If parents have a stigma or fear of the subject, it's likely that their children will, too. It becomes a vicious circle. And approaching math with this internalized fear at a young age means that kids are not going to enjoy the subject and ultimately will not learn to their full ability.
Math is also cumulative, more so than science. So, if students are struggling from a young age and have gaps in their foundational math skills, they're unlikely to succeed with more complex concepts in higher grades. We need to think more about early learning intervention.
While the federal and provincial governments have been putting policies in place to improve math scores across the country, I have two qualms with this. First, these conventional methods don't resolve math anxiety. Second, we're not going to see immediate results. We need to alleviate math anxiety through innovative methods, such as gamifying learning so kids can actually enjoy it. We need to make it easy for teachers to encourage problem-solving approaches. We need to make sure that kids advance from early grades without large gaps in their math knowledge.
Moreover, we need an elegant workaround to the conventional solution of simply increasing funds, resources and "math time" in classrooms.
What's at stake?
We are in a rapidly changing, increasingly interconnected and tech-rich world. Yes, the jobs of the future are going to require STEM-educated workers, but the jobs of today need them, too. To build the pool of talent required to fill thousands and thousands of jobs, we need to participate in innovative early learning intervention, so kids can build the skills and confidence they need to pursue STEM disciplines.
"Before exiting, take time to transition your business properly": Today I found this article by Mahyar Hansotia in the Globe and Mail:
President of Sobel and Company, Professional Corporation
There's an aging population of owners looking to exit the family business and, between 2018 and 2025, they are expected to represent a transfer of up to $4-trillion in assets, according to PricewaterhouseCoopers. Yet less than half of family-owned businesses have a formal succession plan in place.
Many entrepreneurs hold off on an exit strategy until they retire or are too old or ill to continue, but there are potentially unexpected reasons that may require a departure from the business much sooner, including family obligations, financial necessity or other life changes. Not having a well-defined strategy in place can force hasty decisions that put the business at risk – and could leave money on the table.
Disposing of a private business is a lengthy, complicated process that usually requires careful planning to get the desired financial results, which can take as long as three to five years.
Establish the business's worth
The first step is to make every effort to maximize the attractiveness of your business to potential buyers and increase its net profit. This can be achieved by reviewing revenue recognition policies, diversification of revenue concentration, dropping low-margin customers, negotiating with or switching suppliers on cost, reducing or eliminating discretionary expenses, and divesting any assets that don't add value or are not required in the business operations. For valuation purposes, a buyer wants to see a two-to-three-year history of good profit, but it takes time to show the effects of all these changes.
There are different ways of valuating a business and various factors that can affect its worth, so engage a qualified adviser to establish a fair market value. Don't forget intangible assets such as patents, goodwill, copyrights, customer lists and trade names. And even if transferring or selling the company to family, avoid the mistake of claiming a low valuation of the business for tax purposes, as this can backfire if the Canada Revenue Agency disagrees. As with any transaction, don't forget to factor in GST/HST implications.
If you're a sole proprietor or corporation looking for an exit strategy, there are basically four ways to transfer out of your business.
1. Transfer to the next generation
Most entrepreneurs continue their legacy by transferring ownership of the business to their children, family members or a trusted non-family member through an estate freeze.
With an estate freeze, you'll receive preference shares while the new owners purchase new common shares for a modest amount. As cash flow becomes available, the preference shares are usually repurchased by the corporation, which provides you with income over several years. This strategy is beneficial due to the low upfront costs to the new owner, while reducing your personal taxes and funding your retirement.
2. Selling assets
Sole proprietorships can only sell assets, while corporations can sell assets or shares. A corporation also has many more tax planning opportunities.
During negotiations, you should involve your accountant to help determine the tax consequences of the purchase price allocation among assets. When a corporation sells the assets, the cash can be distributed to the shareholder(s) over several years, thereby minimizing their personal taxes. However, this type of income deferral strategy is on the CRA's radar, so be careful of any tax changes.
3. Selling shares
In the case of a corporation, ownership can be transferred to other individuals by selling shares. As the owner selling the shares, you may be able to take advantage of the lifetime capital gains exemptions, saving thousands of dollars in taxes, but in order to claim this exemption (which for 2017 is approximately $835,000), there are a number of conditions of eligibility. You'll need to speak with your accountant about these, as well as any changes needed to meet them.
Usually, you'll want to sell the shares while the buyer will want to purchase the assets due to differing tax treatments. Your accountant can help you understand the numbers and the negotiation process, and even provide creative solutions to satisfy everyone.
4. Winding down the operations
In some situations, selling an operating business – or shares in it – is not possible due to the nature of the business. This could be a one-person operation, such as an artist, musician, or hairstylist – any professional or specialist in a field who is their entire business and therefore cannot be replaced. Or, it could be a business that has become obsolete.
In this case, you'll need to take steps to sell whatever assets can be sold in order to maximize proceeds. Creditors will need to be paid or settlements made where available funds are insufficient to cover debts.
Once all receivables have been collected, any licences and registrations and government accounts such as payroll, sales tax, etc. should be cancelled to prevent further unauthorized use. Closing government accounts is mandatory, along with filing the appropriate reports.
Thinking about and creating a formal exit strategy well in advance of your actual departure from a business may seem odd. But given the complexities involved, it's actually a best practice that not only helps define your company's operation today, but it will help maximize your ROI in the future.