Have you filed your taxes yet?
Yesterday marked the official end of tax season here in Canada. Unless of course you are a business owner (or married to one), in which case you have until June 15th to file your 2013 return. The tricky part is that if you have a balance owing your payment was due on or before May 5th. What an exciting year as well! Heartbleed literally shut down the CRA’s website for days while they worked to patch the security breach. It is reported that roughly 900 Canadians were directly affected by the breach. In order to protect Canadians from further fraud the government will be notifying those affected by registered letter. Those would be pretty nice odds if it were a lottery.
Calculating your operating profit margin is like taking the temperature of your business. You want to make sure your business is healthy and growing well. It’s better to be a little hot than too cold.
With the closing of another fiscal year at hand this is a great time to check in with your business and begin planning for next year’s taxes and set realistic and attainable goals. Before you do this you need at least 1 benchmark (a point of comparison). I am going to challenge you to identify your operating profit margin. Calculating your operating profit margin is like taking the temperature of your business. You want to make sure your business is healthy and growing well. It’s better to be a little hot than too cold In order to do this you need two numbers from your business.
How to calculate your operating profit margin:
- Your operating income (sales less expenses)
- Your revenue. The total amount of all of your sales.
- Next divide your profit by your revenue.
- The resulting ratio is your operating profit margin.
A higher margin is generally better because it indicates lower financial risk. Are still in your start-up years? Don’t worry; it is perfectly normal to have lower profit margins for these first few years. Another important note is that what may be considered low for one industry may be quite high in another. If the result of your calculation was a less than ideal ratio I would recommend your next step to be a review of your largest business expenses. You will then be able to see if there is any opportunity for savings in 2014. This is a great start on your realistic and attainable goals for your current fiscal year.
Seriously; Have you changed your passwords?
Lastly, if you haven’t already done so, I strongly recommend changing your passwords to your e-mail and social media accounts at the very least. Fighting with p-word overwhelm? Here is a helpful video from CNET on creating and managing secure passwords.
I would love to hear from you. What strategies are you implementing this year to decrease your operating expenses or increase your operating profit margin?