Small Business Insights Newsletter |
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What We Have Been Up To Teaching This semester I am teaching Intro to Business and Small Business Marketing online through OntarioLearn at Mohawk College. Most of the students are in a Small Business or Entrepreneur Program. It is great to see the curriculum that many of the Ontario colleges are offering for Entrepreneurship. In the programs, they are learning the skills for the "business" side" of entrepreneurship. They learn to write business plans, marketing plans, understand strategic planning, financial management, basic business valuation, management employees, and many of the skills needed to run a successful business. In addition, Rudy is teaching a Business Leadership class in the International Business Program through Fanshawe College which has students analyzing Case Studies from Harvard Business School and the Ivy School of Business. Business Needs in 2020-2021 Many business owners we have been working with during the pandemic have been looking to improve areas in their business for their reopening while others are looking to sell their business in the next few years and are looking to improve their valuation. There are also many young entrepreneurs who have abandoned what they were doing prior and have started businesses. Startup Needs for Grants and Financing Our focus for business plans is typically businesses looking for investment or financing for over 250K+. We find many start-ups struggle as they need a business plan for financing or a grant, but can't afford to pay for a plan. To meet this need I have worked during any downtime on a detailed guide for those businesses which include live business examples, a glossary, and charts to insert into the plan. I hope to have this ready for the June time frame and it will be available on our website. This guide is geared toward businesses who need the plan for financing/investment or a grant. We will provide online coaching as an option to help supplement the guide. Consulting Firm Award In February, we were surprised and thrilled to receive notice from an organization out of California that reviews consulting firms across industries, that they awarded us the honour of Top 9 Toronto Consulting Boutiques, Business, & Strategy Firms. Though we are not located in Toronto, that is where the majority of our clients reside. To find out more click on the emblem below. |
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RISK WITH A BUSINESS LIES SOLELY WITH THE OWNER |
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This is a cautionary tale for start-up businesses who have not performed their own due diligence on their new "idea", determined if there is a market and thought through how they plan to implement their "idea". It is best to understand before investing time what is required and who a lender or investor expects to carry the risk. A few years back, we were approached by a company looking to come to Canada who needed help to set up their business in the Canadian market. The owners were manufacturers of an offshore product that has done well in Europe but had no real presence in Canada. They wanted help with all of their marketing for the Canadian market, and they were looking for us to set up a distribution channel and manage it. When it got to contract negotiations, it became abundantly clear that they wanted us to do this for "free" and for us to take a risk in their business in the hopes that the product will sell here in Canada. The idea was for us to give four days (8 days for both) each of our time a week for their business to help it get set-up and running. They said once we met all their obligations, they would pay us when the distributors were in place and had sold the forecast the owners had set for year one. All of this in a country, they had not performed any market research themselves. If you think it is uncommon, it is not, and a big mistake new business owners sometimes make. They believe they created the next most incredible idea and that everyone should believe in it as they do and would want to jump on board. In turn, they wanted "free" help without putting any skin in the game themselves. This example is extreme, but this business situation did happen. Usually, they want to provide equity in a business that has 0 revenue. In most circumstances, we find this situation happens with start-up businesses who are looking for 100% financing or investment, as they plan to not contribute any of their own funds. You can have the best idea, but if you cannot implement the actual business or put in any of your own money in and believe in the business, it is only an idea. In extreme cases, you might find an investor who will pay you for the idea only, but that would be a one-time payment, and you would most likely not be involved in the business. Many times when we are contacted to develop a business plan for a start-up, we find that they have not ironed-out the business model and think this is the role of the one writing their business plan. They may for example want to open a restaurant because they like food or cooking but do not know the first thing about what it takes to run the restaurant's business side. We have also worked with software engineers who have created a product that they think will take off to find out there is not a real market for the product. They could find no one to sign up for the "free" beta. You can have the best idea, but if there isn't a market or can generate revenue, this is not really a business. An idea or a product is not worth anything if there is not a market, or the owner cannot execute or implement and generate revenue. Whether you are looking for others with skills that you do not possess or an investor for your business, you cannot expect others to risk their business in your idea, when you are not taking any risk yourself. If I had a nickel for every start-up who wanted to provide us equity for work that they could not perform on their own, or wanted us to find investors for them when they had not invested any of their own money in the business; I would be a millionaire today. The funniest part of this is they usually want to maintain 90% of the company, and they only have the "idea," and everyone has the skill and the money. One of the key ingredients to a successful business is the team you put together, but it is essential that if you ask others to invest their time or funds in your business, you can genuinely look yourself in the mirror and say you have done the same. If someone came to you and said I have this idea worth millions, but to make it a reality, I need your money and skills to pay for a business plan, a patent lawyer, people to go out and market and sell the product, and a supply chain, what would you think? Would you think this is a reasonable request if they wanted sweat equity and you find they had not invested any money in the business idea. The answer is no, so before you want others to believe in you and your idea, you need to be realistic about what your idea or product is worth without help or funding from others. Before you ask other people with skills and money to work for "free" or take all of your business risks, ask yourself if the shoe was on the other foot what you would do. There is also the old saying - you pay nothing - you get nothing. The manufacturer in the example above told us that they were doing this because they had been burned in the past by salespeople. They now wanted others to take the risk. What this says is they did not know how to hire the right salespeople or vet them. They hired untrained professionals at a low rate and then wondered why they did not get the sales they needed. They then determined they needed help with setting up everything in another country, approaching people with years' experience and then want them to take the risk for their prior mistakes again without any risk to themselves. If you start a business and lack all of the skills or funding to get it going, look for people who can act as business advisors or choose them to sit on your board or directors. There are also non-profit organizations funded by local or provincial governments that provide free or discounted services that can help provide you with help and a reality check. These include the Small Business Enterprise Centres, Innovation Centres, and even Incubators within Colleges and Universities in Ontario. Similar organizations exist in other provinces and within other countries as well. These organizations will not have you present to investors until you have what is needed in place and can provide free and discounted services and guidance. Before investors or lenders usually talk to you, the idea must be real and depending on the business type, this could include: - Business Plan and a Pitch Deck
- If a product, a prototype / proof of concept
- If there are patents, they should be filed and underway
- Sales or signed contracts
- Proof of your own investment
- Skills in place that are needed to execute
To get to this point, you will not get there by getting inexperienced people to work for free, as you will not find experienced people who will. If you do not have the skills to execute, you need to be ready to either pay for the service or give up a larger piece of your business. Having a 100% of nothing is nothing - having 10% of $1M is $100,000. According to Investopedia, "An entrepreneur is an individual who creates a new business, bearing most of the risks and enjoying most of the rewards. The process of setting up a business is known as entrepreneurship. The entrepreneur is commonly seen as an innovator, a source of new ideas, goods, services, and business/or procedures." There is no better reward than starting a business and seeing it succeed, but with the reward are the risks that the owners, not others, need to assume. |
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We are regularly asked by many of our clients to recommend tools for their business, and many times we find as we are working with them, we find tools they are using are better than the ones we are using and switch. Here are a few of the tools that we use in our business that will hopefully help some of you looking for one of the types listed. ACCOUNTING TOOLS Small businesses that do not have to manage and account for a lot of inventory, like a manufacturing or construction business, recommend QuickBooks Online. When it first came out, I will admit that as the one doing the bookkeeping in the business, I was not a fan. It lacked a lot of the features of the desktop products, but over time, it has improved significantly and is continually upgrading functionality. If you are a business, that inventory is a large part of your business, and you are not using a third-party system that integrates to QuickBooks Online, we recommend the desktop version. There are several versions to choose from to meet your business needs. QuickBooks and other vendors offer a client-server offering of the desktop version so that you can access it wherever you are. A second option is Sage 50, which offers both online and desktop versions and is well suited for small businesses. Having used both Quickbooks and Sage products, I find Quickbooks a more straightforward product to use, but Sage is an excellent product as well. We highly suggest that you consult your accountant and determine which product they would recommend for your business before purchasing. PROPOSAL SOFTWARE We have tried several proposal software packages and prefer Proposify. Proposify is provided as software as a service from a company out of Nova Scotia. You can store templates online as well as individual components of your proposal and contracts. We keep all of the write-up for our services online, agreements, policies, and upfront write-ups on the business in the product. We just need to complete the client overview and the problem they are looking to solve for each proposal. We then provide a link to the client where they sign digitally, and we are informed. The client can view the document online, or they can download and read it in PDF format. It integrates into several packages to create customer information for accounting packages and deals to track within your CRM software. CRM SOFTWARE Over the years, we have used Zoho and Insightly, which were good products, but one of our clients recommended using Hubspot CRM. When one hears Hubspot, one typically thinks of a high-priced marketing package that starts around $200.00 US a month. This is true, but the company invested in developing a CRM package that they offer to small businesses for free. Over time, their hope is that as you grow your business, you will want and need to upgrade. They offer an upgrade to the CRM for $50.00 US a month, which is what we were paying on the other platforms, but we have not had to upgrade as the product is very robust as it is. It integrates with our Outlook and tracks when an email is opened and read. It integrates with our website and tracks visitors as well. We also have it integrated with our forms. Suppose someone enters their email in the forms on our website and revisits the site. In that case, we actually know who has visited versus someone from Toronto, Ontario and what pages they visited. SOCIAL MEDIA POSTING AND ANALYTICS SOFTWARE As with CRM software, we have tried packages over the years but settled on Buffer. Buffer not only provides the ability to post and schedule on the most popular platforms, including Instagram, Facebook, Twitter, LinkedIn, and Pinterest, it also includes analytics and the ability to post directly from your browser. Several products provide similar functionality, but I find that their support is superior. We started using the product years ago, and though they upgraded the product and have a new pricing model, we were grandfathered and pay very little more per year than we did eight years ago. This tells me they appreciate their customers. BOOKING SOFTWARE We use the product vcita for booking free consultations and online coaching and advisory sessions. We have used the product for years and they are continually upgrading the product. You can store any services you provide where clients can set up appointments along with parameters surrounding the appointment. If a payment is needed, vcita offers the ability to process payments which is very convenient. The product will send reminders several times to you and the client as to the appointment time. The client, as well as the user, can choose to cancel or reschedule the appointment online. The product offers a the option to embed booking in your website or link to a customized booking page, which we choose to do. Keep in mind the more product embedding you do, can slow down your website. |
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Blog Articles Since the Last Newsletter |
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COVID-19 Policies We are still providing payment terms for consulting engagements for up to 6 months through December 2021, for those businesses that have been affected by Covid-19. At the time of the contract signing, we will set up a payment amount and schedule to meet your needs. Coaching is paid for monthly, so this program does not apply. For new clients, without a credit history with us, we will require a credit card for auto-bill for recurring payments, otherwise, we offer payment options through e-transfer as well as Visa and Mastercard. |
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