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What Type of Holding Company Should I...

Tag: Starting a business

I would like to create a holding company that I can use to purchase existing small businesses. My plan is to purchase an existing "Beverage Drive-Thru" business that has been established for approximately 15 years and is currently making a profit. My ultimate goal will be to continue in purchasing small existing businesses under the holding company that I create. Which would be the best option to minimize my personal tax impact, as my wife and I will continue to work our day jobs? What other factors should we consider?

In creating any business for any purpose, you have both tax as well as legal factors. Deciding on the form of entity for your holding company depends on a number of issues.
For example, what's your personal tax situation? Do you envision bringing in other owners -- especially passive investors -- into the holding company? And once you buy these businesses, what plans do you have to continue to operate them, especially if you and your wife will continue in your day jobs?
Will you be hiring other managerial staff? Might they want stock options as part of their compensation? All of these factors, and more, go into weighing which form of entity will be right for your situation.
Another important factor to consider and you buy these businesses is your expertise in the industry. Have you had any experience in the beverage drive-through business? If not, how will you evaluate whether the current business is really on solid ground? It may be making a profit, but there could be large outstanding debts. Or erratic cash flow. Or major employee or business systems issues.
Make sure you team up with an advisor who can help you evaluate each of the business opportunities carefully so that you're not buying something without knowing what it's really worth.

Social media: Is your business part o...

Tag: Social media

The vast majority of Canadians are now using some form of social media to create and consume content. The more time Canadians spend on the Internet, the more opportunity there is for your business to reach them there.
Have you thought how you could be using social media in your business?


Marketing: Advertising through traditional media can be expensive. Advertising through social media doesn't cost anything more than your time. Let your customers know that they can subscribe to your social media feeds to learn about new products, discounts, sales and more.


Customer service: If a customer calls your business, you would answer the phone. If someone walks into your store, you would ask “How can I help you?” If you are using social media to put messages out to your customers, make sure you also respond when they talk to you.


Listening to feedback: A lot of people use social media to talk about the good and bad experiences they have with companies. Be sure that you are listening for mentions of your company in social media. The feedback can help you improve your business and reach out to customers to address their concerns. Satisfied customers can become your champions online. Let them know that you appreciate them.


Hiring employees: Social media can be a great way to get the word out about job openings at your company. A few social media searches can also be a good screener when you are trying to learn more about applicants.


Following key trends: By following key influencers and relevant keywords, you can stay on top of trends and developments in your industry sector.


Social media is a way to network with your customers, chat with other business owners, and keep abreast of what is happening in their industry.
Check out our section on Online marketing to find more tips on getting the word out for your business.