Starting a small business is a leap of faith. It’s a puzzle with many pieces: products, services, customers, employees, investors, creditors, suppliers, competitors, capital, prices, cash flows, markets. Each puzzle, like each small business, is different. And the box doesn’t come with instructions.
We took our own leap of faith in 2011 when we started Origami Accounting (now origami.ca). We includes Darren, Kris, Ashley, and me, Sridhar. The idea was to provide an all-in-one bookkeeping, accounting, and tax service for Canadian small businesses. Each month, small business owners would send their paperwork to our office in priority Canada Post envelopes. (Everything is online now.) Our staff would record the transactions, produce monthly financial statements, and prepare and file corporate sales and income tax returns with the Canada Revenue Agency. All for a flat monthly fee. That was the idea.
Over time, we found ourselves focusing on one part of that idea, what we called the compliance side: the things an owner has to do to keep the CRA and provincial tax agencies from calling. Staying on top of taxes is important — ignoring responsibilities on this front is always the worst option — and it took a lot of work and organized effort on our end to get it right. We still produced monthly financial statements but most of our clients didn’t understand or use these reports. Some did. They would promptly answer our questions about their transactions. They would ask us questions of their own about profits and cash flow. We noticed their businesses tended to make money and grow. We noticed, but our course seemed set. Most of our clients relied on us to prepare and file their taxes, and that’s what we settled in and did.
You can Google the failure rate of small businesses. Statistics Canada, for example, has nearly 70% of small businesses surviving to their 5th year. That’s not bad — if the goal is to survive. But there’s a kind of surviving that eats away at the survivors, where the business makes enough money to keep going, but not enough for the owners to draw a decent income; another where owners pour money in, hoping weak results will somehow turn around (any day now); still another where every day seems like day one, same nagging problems, no sense of progress. Surviving takes several forms. Success is a matter of degree.
Coming out of Covid-19, we questioned many of our assumptions about success in small business. Was our business working? Or was it surviving? We went back to basics. We reviewed our financials. We ran and planned the numbers. We talked to our clients. What did they value in our service? What could we do more of or better?
It turned out that our clients were going through it too. They wanted to better understand, plan, and manage their own businesses. They wanted to know what their financial statements were telling them. They wanted better results now, next month, not in some fantasy future. They wanted to know if their businesses were working, that is, making money and generating cash. If not, could they get them to work? How? From a financial perspective, what did they need to be focusing on right now? How could they stop chasing and reacting? How could they set goals for this year, a year from now? How could they track their progress? How could they know they were on the right track?
This Substack is a journal of my efforts to understand success and failure in the small business space, and of Origami’s efforts to pivot from being a supplier of bookkeeping and accounting services to being a partner in our clients’ success. It’s also a collection of business stories, some researched, some personal, some about our clients.
