PROFIT BusinessCast

People running small and mid-sized businesses aren't always the best at adhering to employment law, according to Hermie Abraham. And that needs to change.

"Often, entrepreneurs think they're small shops, they don't have to worry about employment law so much," says Abraham, an employment lawyer at Samfiru Tumarkin LLP, which serves both employees and employers. "But from the moment you hire your first employee, even if it's a contractor or someone part-time, you've already created employment-law liability."

In this week's BusinessCast, Abraham describes the four most common employment-law mistakes small and mid-sized businesses tend to face, and explains what to do to avoid them.

1. Hiring without a contract

"The employment contract in employment law is what a prenuptial agreement is to family law," Abraham says. "Employers and employees without a contract will assume many things about the relationship." A good contract will set the terms of the relationship, define what each party is responsible for and makes it a lot easier when the term ends.

There's nothing wrong for companies (in a non-union environment, at least) to offer different contracts to different people—even in the same job. "It's important to have a contract tailored to each employee," she says. "Things like compensation, maybe even vacation will be different for each employee."

2. Hiring contractors who aren't actually contractors

You should be careful about categorizing employees as independent contractors just because to avoid paying benefits, says Abraham. "There's nothing wrong with hiring independent contractors if they are, in fact, independent contractors," she explains. "The problem is when employers characterize someone as an independent contractor to avoid some obligations they might have." If you've miscategorized an employee in this way, you might be liable when the employment relationship comes to an end (if not before) for unpaid liabilities like taxes, deductions and unpaid vacation time.

3. Relying on non-enforceable restrictive covenants

"There's a misconception among employers that after employment relationship ends, there are obligations that survive that the employee is bound to abide by," says Abraham. "The fact is, that's not true. Unless you have a non-competition or non-solicitation provision that's written and enforceable, it's not going to hold." Such clauses must be established, written and agreed upon by both parties to hold water.

4. Ignoring overtime

Overtime has become a hot-button issue in Canada, Abraham says, and that's because so many companies ignore it. "Employers are required to pay overtime once an employee has worked in excess of 44 hours in week," she reports. While there are some exemptions to that, in most cases an employee does have the right to extra pay if her hours exceed this threshold—even in skilled professions in which workers aren't paid an hourly rate.

Joe is planning to open a shoe store. He negotiates a lease in a plaza anchored by a grocery store, thinking it's a good bet because a grocery store brings in a lot of traffic. But nine months after Joe occupies the space, the grocery store closes. He's stuck paying high rent and has very little traffic coming to the plaza.

Mary is told she's getting 4,400 square feet of office space for her HR consultancy. When she measures the space, she discovers it's only 3,600 square feet; she's being charged for what's known as "phantom space," and doesn't know what to do to rectify the situation.

Rajiv is building a restaurant in a leased space, and runs into permitting issues and construction delays. He ends up opening up three months late, and has to pay for three months of rent (at $15,000 per month), just because there was no clause in his lease stating no rent would be due until the business opened.

These are scenarios Dave Willerton sees "far more often than I should." The founder of The Lease Coach has been helping commercial tenants negotiate better deals with landlords for more than 20 years. And he's emphatic that situations like those explained above can be avoided with some diligent bargaining at the outset.

Contrary to what you might expect from a man whose career is built on helping people sign leases, Willerton feels it's always better for business owners to buy the property they occupy. "I really believe that paying a mortgage is better than paying rent, because eventually you'll pay off your mortgage," he says. "The problem is, 98% of the good locations for a typical retailer or restauranteur are not for sale. You can't buy them if you want to; that's just the lay of the land. So, most business owners will be tenants."

But being a tenant doesn't have to mean you'll get burned. Here are a few of his tips for negotiating better leases:

1. Look to older buildings

Across Canada, there's a flurry of new commercial plazas and complexes being built. As a result, Willerton says, a space that was a prime property 10 years ago is almost yesterday's news, as a developer has new park a few blocks away. "In my opinion, it is extremely overdeveloped," he explains. "Developers are building commercial space faster than they can lease it, and when they do lease it, all it's doing is leaving vacant space behind in properties that were perfectly fine."

It's those older properties that are a goldmine for entrepreneurs looking to save some serious money, he says. "If you can get in to one of the older properties and run a successful business, your rent might be two-thirds of what it would be in a new plaza."

2. Don't get emotional

Many entrepreneurs have strong emotions about their businesses, and are accustomed to dealing with suppliers who feel the same way. That rarely applies to commercial landlords. "You have to remember a landlord owns the building; that is their purpose for living," he says. "Whereas a business owner is leasing as a means to an end, what they really want to do is run a hair salon or a restaurant or a chiropractic office. There are different motivations for working together.

"It's not like a marriage between a husband and wife," Willerton continues. "A tenant typically has one landlord, but a landlord might have hundreds of tenants. So, for the landlord it's much more of a business decision. Whereas to the tenant it's much more emotional." If you do what you can to leave your emotions off the bargaining table, you'll get a better deal, he says.

3. Never be afraid to walk away

Anyone opening a business is already taking on a lot of risk. Lease terms that add to that list are usually ones that should be avoided, says Willerton—even if it means giving up a great space. "Walking away from a situation where the landlord is asking for a large personal guarantee from you and, possibly, your spouse, is probably a good idea," he advises.

"Once I got the travel-industry bug, I never left," says Brian Robertson. The co-founder and COO of Vision Travel Solutions (and this week's BusinessCast Guest) is talking about his 30-plus year career in the travel industry—the past 14 of which have been at the helm of his own company.

Vision Travel is Canada's largest independently-owned business travel company, with 16 locations across Canada and 600 people. The company has three major lines of business—corporate solutions, meetings and incentives and leisure travel—with corporate work representing 70% of its work.

The company has grown strongly since its inception, which may seem an anomaly in the digital age. After all, shouldn't Skype and GoToMeeting have replaced the old-fashioned business trip by now?

Not quite, says Robertson. "Technology has improved the way we communicate, but the reality is there's nothing like a face-to-face business meeting," he explains. "As we like to say, being there is everything."

Aside from the enduring appeal of face-to-face contact, there's another trend keeping the business travel sector thriving: the increasingly global nature of companies. "Business travel is a growth industry because corporations are growing regionally and globally," he says. "We're seeing a lot of Canadian companies spread their wings into emerging markets."

This, plus a series of acquisitions, means that Vision Travel is busier than ever. And as exhilarating as it is to run a growing business, it's not without its challenges. Having been managing growing pains for nearly a decade and a half now, Robertson has the following advice for his fellow entrepreneurs in the same position:

1. Always manage your cash flow

"It's crucial for smooth business operations and it's allowed us as a company to acquire other organizations, for the most part using our own money," Robertson explains. "Managing cash flow is key."

2. Network with your industry peers

Too many busy entrepreneurs don't make the time to meet with their industry peers. That's short-sighted, says Robertson: "We're active in all the major trade associations. For sharing ideas, it's really priceless." Vision Travel is a member of the Global Business Travel Association, the Association of Corporate Travel Executives and a global network for corporate travel management called Radius. "These are organizations that are global in scope," he says. "They've helped us to deliver client satisfaction around the world."

3. Hire the best people and create a culture of service excellence

The two go hand in hand, Robertson says. "Our core values state that our first responsibility is to our client, and that our team members are the key to our success," he explains. And that's not just a mission statement on a wall: "We have a 97% customer retention rate, and the tenure of our team members is unmatched in the industry," he reports. "So, we must be doing something right."

There's a lot to be said for opening up about the way you do things. When you decide to show the world your firm's processes, culture and other behind-the-scenes developments, it can greatly change the way others look at you—often, for the better.

That's Dara Gold's philosophy. Dara is the co-founder of Toronto-based independent video-game developer What's This Games and the guest of this week's BusinessCast podcast.

Like many operations in Toronto's white-hot game and app development scene, What's This runs small and nimble. For now, it's just Gold and her two co-founders. She handles art direction and graphics, and her partners manage programming and design, respectively. Since launching in 2012, the company has developed a few games, including one called Autocorrect Text Adventure, which Gold explains thusly: "You input your answers to puzzles and explorations through an iPhone interface on the computer screen. It autocorrects you, and you have to work with that to solve problems."

According to Gold, it's an incredible time to be part of the gaming and app development community in Toronto. "We went to Jacksonville to be part of a juried festival called Games Art and Music—we were invited to show a game, which was very cool," she says. And people in the U.S. know all about Toronto as a hub for innovation in this industry. "If you go somewhere else and you say ‘I'm from Toronto, I work in games' even if you have nothing released, you get instantaneous street cred. The reputation we have is kind of ridiculous," she explains. "What we have here is a huge community of support. No matter what happens, you'll have an opportunity to show your game, opportunity to speak about your game and to speak with others."

What's This has been able to build a lot of buzz about its offerings to date. Gold believes that's largely to do with its candid and detailed development blog, which gives visitors to the company's site an all-access view into how its games are made. "The idea is that it will help grow an audience and grow interest," she says. "As we slowly look for investors or press, you'll have it to show."

A good blog will satisfy the needs of those who want to know more than just your company's mission statement, she says: "People will say, ‘We want to know more than what your product is. We want to know who you are and what you went through.'" Because the What's This blog is written by all three co-founders (who take turns posting), it offers a comprehensive view into how the operation really works.

Aside from the blog's value as a way to woo media and investors, Gold says it serves another purpose, too: as a time capsule. "It's great to have it to look back on," she says. "This is a big deal for us, and by documenting everything we do we're able to learn from what we've done."

There's not a lot of stagnation in the world of higher education these days. In fact, here's an industry that has experienced dozens of seismic changes in just the past few years ago. It demands innovation.

Thankfully, people like Shaul Kuper are here to provide it. Kuper is the founder, president and CEO of Destiny Solutions and our guest on this week's BusinessCast.

Destiny Solutions creates software for universities and colleges—think: the University of Toronto, Cornell and Stanford—that helps them successfully attract, manage and maintain non-traditional students.

And what, exactly, is a non-traditional student? In short, anyone who falls outside the norm of the stereotype of an 18- to 22-year-old working on an undergrad degree for four years straight. The latter is a cohort that's no longer the norm, Kuper says: "75% of students today are non-traditional, meaning they work while they go to school, they take longer than four years, they may not be taking an undergrad degree. The profile of the main student on campus has changed quite a bit."

Students of any type—traditional or not—were hardly on Kuper's radar when he started a web company in 1995. But two years later, it received an RFP from the U of T's school of continuing study requiring a website, he figured it was worth a shot. "We thought, ‘we could do some pretty cool stuff here,'" recalls Kuper. He was right; his team built a site that was the first to allow a higher-education institution to enroll students online.

Since then, the company has grown and evolved dramatically to become an industry leader, and is not slowing any time soon. Higher education is changing at a blistering pace, and the only way for a company like Kuper's to survive is to change with it. And that means knowing how and when to innovate. So, we asked him what he does to make his firm as nimble, dynamic and ahead of the curve as possible.

1. Make sure your people know what they're doing

"It's all about people," stresses Kuper. He's a huge advocate of Jim Collins's blockbuster book Good to Great—in particular, its insistence on getting the "right people on the bus" to move your company forward. "That's a talent in itself," he says.

2. Clue in to customers

"We're very in tune with our customers—what they're about, what they need, what's going on in the marketplace," says Kuper. "It's really important to understand the marketplace. We speak to our customers every day to find out how it's affecting them."

Sound impossible? Not with the right tools. Destiny Solutions developed a website called EvoLLLution.com (the three Ls stand for Life Long Learning) to connect people in the non-traditional education community—everyone from professors to deans to students. "We have 1,000 contributors who write articles for us on a daily basis. And we have 30,000 readers," he explains. "The site is a way for us to understand what's happening at every level. We end up getting a very interesting view of every topic. It helps us innovate to solve their issues."

3. Take the macro view

Kuper knows that he's only as healthy as his clients, which means he spends a lot of time assessing how they are positioned in relation to their rivals. "If we're doing our job," he says, "our customers are growing faster and better than their competitors"

For more of Kuper's thoughts, listen to this week's BusinessCast.

Randy Litchfield has grown accustomed to change. The CEO of digital messaging firm (and PROFIT 500 veteran) Inbox Marketer Corp. has seen his business grow and evolve tremendously. "We began as an email service provider 12 years ago when email was the only digital channel, he explains on this week's BusinessCast. "Since then we've added mobile and social media."

And the changes haven't just been to keep up with changing technology. Recently, the 50-employee firm introduced Umpire, a messaging platform that's shifting Inbox Marketer's focus away from being quite so service-heavy.

"With Umpire, we're productizing what we'd sold as a service," explains Litchfield (who also happens to be the former editor of PROFIT). It's a big shift, but it's the right way to go to keep the firm's growth sustainable, he says. "With a service company, you're not as scalable as you'd like to be. You get a new client, you hire some people, so on and so forth. By productizing yourself you're able to serve many many more clients with the same number of people. We don't have to grow the premises or staff as much as we'd have to with a full service offering." For a company that's had to move four times in 12 years, that's a relief.

The core of Inbox Marketer remains unchanged: getting the right messages to the right people in the most effective manner possible. Litchfield acknowledges that's something a lot of companies—particularly small- and mid-sized enterprises—struggle to achieve.

But some simple tweaks can change all that—at least, when it comes to email marketing, the preferred method of many entrepreneurs. Litchfield says it's not difficult to get more people to click through, open and read your content. You just need to integrate the following two steps before you hit "send":

1. Test your content

"Testing is the single most important thing anyone can do," says Litchfield—and most people don't do it. "By testing, I mean testing different subject line or different content. Have a controlled test. Segment your audience. One gets Message A, one gets Message B. You'll almost always be surprised by the results."

2. Tailor your messages

In many cases, you'll have a reader base that's wildly varied; it may be made up of readers in different industries, in different regions or in companies of different sizes. "My advice would be to segment into a few basic segments," says Litchfield. "Target the content accordingly to those segments. That will almost always make opens and clicks improve, along with readership and retention."

For more of Litchfield's advice, listen to this week's BusinessCast.

"The No. 1 impact of the world going mobile will be on business models. If your company is not geared to understanding how mobile will affect your revenue generation, then you will be in serious trouble."

This is the assessment of Mickey Khan, editor in chief of Mobile Marketer and our guest on this week's BusinessCast.

Mobile—that is, communicating to customers via smartphones and tablet devices—has, in Khan's view, "become part of the fabric of marketing and communications in retailing."

Khan has some pretty big thoughts on this explosively popular means of communication. Here are some highlights:

On where mobile is going:

"Mobile is not just limited to advertising and marketing. More and more, it's focused on commerce, on enabling transactions," he says. And that refers to sales inside of and outside of the store.

And the trend isn't letting up, he says: "This year, you'll see the vast majority of people accessing the internet through mobile devices, such a tablets and smartphones. And in five years, there won't be a discussions of mobile or online. It'll almost entirely be mobile.

"If you don't get it right over the next five years, you'll be out of the transaction loop."

On location-based marketing:

"With iBeacon, geolocation, geofencing and Bluetooth, it's very easy for marketers to target you when you're in a store or when you have their app on. And many consumers like that convenience," explains Khan.

"But it's still early days. There are a lot of issues about privacy. Also, marketers and retailers have to set aside investment and spend to facilitate this."

On the value of presumed-dead technology:

"QR codes were highly promising. And I think they still have a role to play, but you can't use them like mass media," says Khan. "QR codes are great for real estate, for example, or packaging. You just can't just use them everywhere."

For more on Khan's thoughts about the future of mobile marketing, listen to this week's BusinessCast.

"I'm 35 years old, a new father, a loving husband. I'm a dreamer. I want to go out there and make something of my life, and I want others to do the same."

Meet Kenneth Sum, co-executive director of the Toronto-based SIPO Foundation and the guest on this week's BusinessCast. His purpose at SIPO—which stands for Spreading Ideas, Providing Opportunities—is to help anyone young (or young at heart) achieve their highest purpose.

Like so many ventures, SIPO started out with four guys in a coffee shop—Sum among them. They got talking about how they could make their lives the way they wanted them to be. They realized they were craving guidance on everything from their careers to their family lives.

"We didn't have those answers, so we started calling experts in those fields," says Sum. "We found there was such great information out there, but it wasn't being shared."

With that, SIPO was born, with a mandate to gather people together to share their experiences becoming happier with their lives—be it through landing a business, starting a company or simply chasing a dream.

It's Sum's belief that the most effective way for people to share experiences is by building in-person relationships, wherein people can be inspired by the stories of others, get equipped to act on expert advice and foster connections by "sitting kneecap to kneecap with someone who has insight you might not about getting to the next level." (It's holding an event on May 17 in Toronto with just that goal in mind.)

"We want to make sure connecting doesn't mean just building a Rolodex," says Sum. "It's about having that personal relationship between a mentor and a mentee."

In Sum's view, SIPO's work is vital—especially in a large city like Toronto, where he says it can be very hard to simply meet people. What would he say to those who might dismiss his work as trivial, or that happiness is overrated?

"What's the alternative?" he says. "There are a lot of definitions for happiness, and we let people figure it out for themselves. Whatever makes you happy, we try to help your figure out how to get there.

Listen in to this week's BusinessCast for more of Sum's thoughts.

"We know change is painful, whether it be in business or in life." So says Phil Soper, CEO of Brookfield Real Estate Services, Royal LePage and our guest on this week's BusinessCast.

Soper is a seasoned business executive, with experience in everything from energy to IT to, now, real estate, where he's responsible for thousands of employees and independent agents. A self-proclaimed professional manager, it's his belief that the tenets of leadership are the same, regardless of whatever industry you're in. And a big part of the job of any leader is to shepherd stakeholders through big transitions.

Whenever a big change comes in—be it structural, strategic or technological—Soper believes it's the job of the chief executive to get everyone in the organization on board with it.

"We have to sell our solutions to our networks," he explains. "We have to show them very explicitly how their investment in effort and, sometimes, in capital will produce a return for them and their people."

And you can't do that squirreled away in an office. During times of transition, Soper says his work becomes "very much a political" job. "You have to go on the road when there's big changes," he says. "You have to rally to get the support of the troops, build momentum and point to past success as a reason they should trust the company and me in adopting painful change."

It's crucial to roll these things out slowly, Soper says. He cites the recent migration of his company's tech backbone to one based on Google technology. The firm started using the new platform on its consumer-facing web properties, because it was the least disruptive to its agents and staff. Once some solid metrics had come in, he began his pitch. "I like to start with proof points," says Soper. "I was able to show that through implementing these process, structural and technology changes we were able to double the number of consumers visiting our websites, and even more importantly, triple our leads, which is filling the funnel that was pushed back from these visits."

Such highly favourable results make other changes significantly more palatable, Soper argues. "I can say 'here are the tangible business results that came from the first phase.' It makes it easier to tell staff something like 'we're migrating our email systems."

Listen on to this week's BusinessCast for more of Soper's tips on managing change, leadership and handling growing pains.

"When conversations, communications, presentations are really important, we tend to get anxious. All of us. Even communicators who've been doing it for a long time."

So says Mark Bowden, president of Toronto-based communication training company TRUTHPLANE and the guest of this week's BusinessCast.

Bowden—who wrote the bestseller Winning Body Language—believes that a bit of nerves are totally normal, whether you're speaking to an audience of thousands of stakeholders or one crucial investor. He also believes these nerves are completely surmountable. In fact, that belief is what he bases his work on. "I help people communicate in a way that helps them be seen, stand out, win trust, be respected, be seen as confident immediately and to get more out of that communication than they put in," he explains.

The problem with anxiety about public speaking is that it tends to manifest at times that are really important, says Bowden. And that results in the presenter appearing nervous, indecisive and unconfident—not exactly a great way to win over a room. A calm and assertive presence is much more effective, he adds. And that can be achieved with some simple changes to your body language.

"This is a new discovery in psychology," Bowden explains. "When you adopt the body language of someone who is calm and assertive, you actually start to feel like that. It's called ‘embodied cognition.' In other words, the brain follows the body." So, instead of trying to rationalize away your nerves with your brain (the often-futile "Oh, I shouldn't feel nervous, aren't I silly?" approach) you project confidence through your body. That way, he says, you come across as confident—and feel confident as well.

One way to do this is to put your hands in what Bowden calls the "truth plane"—a position he says is so effective he named his company after it. Imagine there's a table in front of you that comes up to your naval. Place your hands as if they're sitting on that plane, palms upright, as if you're holding a few glasses of water. This is the standard truth plane gesture, says Bowden. "If you practice doing that you feel more stable, confident and balanced. And you look more stable, confident and balanced to those you're speaking to."

Why does it work? When your hands are up high, around the chest area—Bowden calls this the "passion plane"—you come across as too excited and agitated. And if they're by their sides—the standard stance of most presenters—you'll come across more tired and sleepy. The reasons have to do with breathing patterns, blood pressure, heart rate and a whole host of chemical reactions within the body, explains Bowden. According to his research, the truth plane is quite simply the ideal way to communicate is more vibrant, assertive and engaging way.

Listen on for more of Bowden's tips on using body language to communicate more effectively.