Seven finance moves that grow a small business

If the only time you see a profit and loss statement is at tax time, you are driving by looking in the mirror. A monthly close, done within two weeks of month end, gives you five numbers that run the business: sales, gross margin, overheads, profit and cash.

It does not need to be complicated. Our bookkeeping workbook produces it from two lists. When that stops being enough, we do it for a fixed monthly price.

Take a business with CAD 1,000,000 of sales and CAD 900,000 of costs. Profit is CAD 100,000. Raise prices by 3 percent and keep the same customers: sales are CAD 1,030,000, costs have not moved, and profit is CAD 130,000. A 3 percent change produced a 30 percent result.

Discounts work the same way in reverse. At a 40 percent margin, a 10 percent discount needs a third more sales just to earn the same profit.

Three practical steps: know the true cost of each product or service, including the labour; set prices from the margin you need, not from what a competitor charges; and review them every year. The pricing and margin calculator does the arithmetic.

Count the days between paying for something and being paid for it. That gap is financed by you. A business growing at 40 percent with customers paying in 60 days needs more cash every month, even while it is profitable.

• Invoice the day the work is done. Our invoice generator takes two minutes.
• Take deposits and stage payments on larger jobs.
• State terms clearly and chase on day one of being late, not day thirty.
• Offer card and e-transfer so paying is easy.
• Negotiate longer terms with suppliers, and hold less stock.

Then forecast it. A 13-week cash flow, updated weekly, shows a shortfall two months before it happens.

A budget is a decision made in advance about where the money goes. Without one, every expense is approved on its own merits and the total surprises you. Set it once a year, then look at actual against budget every month and ask one question of each large variance: is this a one-off, or the new normal? Our budget against actual dashboard is built for that meeting.

A salary is not the cost of an employee. In 2026 an employer also pays CPP at 5.95 percent on earnings between CAD 3,500 and CAD 74,600, a second CPP contribution on earnings above that, and EI at 1.4 times the employee's premium.

Add vacation pay, benefits, equipment and the time it takes to train them. Then ask what the hire must bring in or free up to pay for itself, and by which month. If you cannot answer, wait, or start with a contractor. If you can, hire and measure it.

• The small business rate. A Canadian-controlled private corporation pays 9 percent federal tax on its first CAD 500,000 of active business income, plus Ontario's small business rate, which fell to 2.2 percent on 1 July 2026. Profit left in the company to fund growth has been taxed far less than profit taken home.
• How you pay yourself. Salary, dividends or a mix changes your tax, your CPP and your RRSP room. Our calculator shows all three.
• Timing. Buying equipment before year end, paying bonuses, and when you invoice all move tax between years.
• Credits. Research, hiring and training programmes exist. Ask before the year ends, not after.
• GST/HST. Claim every input tax credit. Receipts not kept are money left behind.

Growth needs money before it produces money. Decide where it comes from: retained profit, a line of credit sized for the cash cycle, a term loan for equipment, or an investor. Our guide to business debt and leverage covers the tests to run first. And from the first day, keep the books as if you were going to sell. Clean records raise the price, and the Lifetime Capital Gains Exemption of CAD 1,250,000 on qualifying shares rewards owners who planned for it.