Arlene Dickinson
A recent article in the Toronto Star noted that “The economy created 36,000 net positions [in April 2009], leaving the unemployment rate unchanged at 8 per cent, a seven-year high. The positive job number shocked economists, who had anticipated, on average, a loss of about 50,000 jobs.”
Keeping up with the times, then, what better expert to speak to than Arlene Dickinson? The renowned head of Venture Communications, one of Canada’s most successful marketing agencies (clients include Unilever, Toyota and Encana), Dickinson is also the sole female adviser, or “Dragon”, on CBC’s Dragons’ Den, the reality-TV show pitting budding entrepreneurs against each other giving budding Canadian entrepreneurs some much-needed advice from veteran business-types.
Q: Can you tell me and our readers a bit about your career trajectory? How did you make it to the top as a self-made woman?
A: Worked my butt off [laughs]. It’s been 20 odd years of working in a variety of different fields. A lot of it has been hard work and effort and perseverance through a variety of different recessions.
I joined Venture 21 years ago this August, and took it over about 9 years ago. We had had partners in the business, and I had been through the pain of trying to get everyone together and working in the same direction, and someone needed to be in charge and the vision that I had was uniquely different than what my partner had at the time — I was more risk-friendly. And I thought that if I wanted to take the risk, I needed to be 100 percent accountable and not risk someone else’s future. We had different paths that we wanted to take; it was the right time, and it was a combination of all those things happening at the same point in time.
Q: What attracted you to marketing?
A: I was one of those junkie people who love to look at marketing and advertising and always feel that I could do better. While I was attracted to the creativity of the industry – I love art – I also had a really practical thought that marketing should be more about how it helps business as opposed to just being highly creative without being accountable to the business.
Q: Right now, you’re right in the middle of taping the fourth season of Dragons’ Den, which starts airing again on September 30. Can you tell me anything about the batch of hopefuls this year?
A: We’ve had a lot of businesses that are much further along in their business life, because capital is so difficult to get this year, so we’re seeing some really advanced ideas in the Den. It’s been fascinating. I’m really excited, actually.
Q: A recent Toronto Star article noted that while many people have been laid off, unemployment rates are not as high as they could be because a lot of people have gone into business for themselves. Is there any basic advice you can give people who are hoping to launch a business right now?
A: Recessions are business cycles where innovation really comes to the forefront, people start to be inventive and think about what they could do differently with their time because they are forced to, so it’s a great time to start a business. But you do have to start with a business model that’s going to make money, and you also have to have a good idea – don’t just become a consultant because you think the world needs more consultants, you have to be able to consult on something that’s unique.
Q: A lot of new businesses tend to fail. What’s your advice to people to keep their spirits up when their businesses are just crawling along?
A: Make sure you are practical and ask someone who’s been in business for a while if your projections are really reasonable. You want to take risks, but you don’t want to take so much risk that you put your family and your livelihood in danger. It’s a very fine line, and most entrepreneurs start businesses under-funded and under-resourced.
The number one thing to remember is that your job as an entrepreneur is not to run out of money. It sounds so simple, but it’s fundamental, and money is a hard commodity to come by right now. If you’re not well-funded, you need to understand the realities of what it’s really going to take to build the business, and make sure you have the financial wherewithal and ability to weather some tough months. Frankly, I worked the first few years taking hardly any money out of the firm. I was able to manage through that, but not everybody can.
Q: Do you have any advice for people who want to set up a home-based office?
A: If you’re creating a home-based business, your affiliations and your associations aside of your home base are going to become even more incredibly important. You need to be in the world as well as be in the office, and they’ll let you get outside the home office so you’re not sitting at home going stir crazy. When you find yourself talking to your cat and your baby, you know it’s time to go out.
Q: Is there a business idea you wished you’d had?
A: Yes, I wish I’d created the BlackBerry! I hate to say that I’m an addict, but because I travel so much, I can’t imagine being able to function the way I do without the access that it gives me. It’s a tool that’s become incredibly important to allow me to be on the road as much as I am and still be accessible to my clients and my team. I wouldn’t ever want to give it up.
Today’s expert is Judith Cane, an Ottawa-based financial adviser and board member of Advocis, a national association of financial advisers.
The Question: Yesterday was Family Day in a few Canadian provinces. One reader, J. Song from Ontario, asks, “What kind of tax breaks can parents claim from their children?”
The Answer: There are lots of tax credits for people who pay attention to what’s going on. Probably the two least-used credits are the physical education credit and the transit pass credit.
The physical education credit is available if your child is enrolled in some kind of physical activity through an organization that issues a receipt, be it skating or skiing or soccer. You can get up to a $500 credit for that.
There’s also a transit pass credit for children under 19 who take public transit to school. You need a pass for at least four consecutive weeks to claim it.
Of course, there’s also the universal child care benefit, a taxable benefit of $100 a month per child up to the age of six. And parents can claim a maximum of $7,000 for child care — for nursery school, day care and camps — for their child up to the age of 7, and they can claim $4,000 between the ages of 7 and 16.
And let’s not forget RESPs [registered education savings plans]. That’s a way for parents to accumulate money for their children’s education. It’s taxable to the beneficiary, which is the child, but the assumption is that the child isn’t making much money when they take the money out to go to the school, so there will be little tax to pay. It’s a great way for parents to save and a great investment because the government matches 20 percent of what your contribution was.
Q: How would the average person find out about these and other benefits?
A: It would help if people had their taxes done by a qualified tax professional, but a lot of this information is available on the Canada Revenue Agency site, which is really user-friendly. Each province has their own tax credits, too, and it’s important to check those out, as well. The CRA site also has links and information on the provincial credits.
Today’s expert is Rhonda Sherwood, a certified financial planner and financial management advisor with ScotiaMcLeod in Vancouver. Bonus: she specializes in financial management for women.
The Question: It’s a timely one, from reader D. Clark in Toronto: “Once and for all: If you have any extra money, should you pay down the mortgage or max our your RRSP?”
The Answer: I get asked this question all the time! I know the rule of thumb traditionally is that to build your wealth, you need to pay off your mortgage and be debt-free on your home. It’s always the number one thing the investment gurus say, and I do believe in that principle. But, in my experience, when I sit down with clients who are in their, say, 50s, when they are really starting to think about retirement, I’ve noticed that the people who were really set on paying off their mortgages have nothing put aside for retirement.
What often ends up happening when I do their financial plans is I tell them, okay, when you’re 60 or 65, you’re now going to have to sell the house that you worked so hard to pay off because that’s the only way you’re going to be able to afford to do anything in your retirement.
Q: Is it because they’ve lost time, and the ability of compound interest to do its work?
A: Exactly. It’s really hard when you’re 50 or 55 to start saving enough money to provide the type of lifestyle you want in your retirement. If you’re at that age with nothing or little saved and want to live off $48,000 a year after tax when you retire, you’ve got to start saving $15,000 a month. It’s just not doable.
As much as I agree that paying off your mortgage is something you want to do by your retirement, I usually tell people to make sure their amortization date is their retirement date, and to make sure they’re investing in their RSSPs.
So, if you have any extra money, put it into your RRSP, and when you get your tax break back, put that money down against your mortgage.
