financial Archives - Canadian Small Business Women

Apr 22 2019

Financing for Female Led Startups

Being a woman is difficult enough, pressure coming from internal and external sources. Being a woman in business brings about a completely diverse set of struggles to tackle head on.

One of the most common struggles that women face within their startup journey and also once deep in the trenches and ready for their first level of growth is obtaining financing.

You can have the greatest idea, product or service but what happens when you max out on your business and/or personal capital and ability to maintain or grow your business? You have little choice but to seek external capital sources. This may seem simple enough, but if your business is under 2 years old it will difficult to obtain lending from your typical financial institutions. Unfortunately, new businesses are risky for most financial lenders and their willingness to extend credit is either far too low and or non-existent without a solid proof of income that extends at minimum to the 2 year period.

This causes many entrepreneurs to seek partnerships with Venture Capital firms or find other private lenders, they can essentially become investors in your company. This is a great form of access to capital for many organizations and also a scary step to take as you now have to answer not only to yourself and protect your interests but also theirs.

How easy is it to obtain private equity funding?

Many will tell you it can be a greater challenge for women versus men. While many new funds are being created to create access to investment it is true that Venture Capital Funds are predominately held by men and statistically investments are made to men versus women, making this financing option difficult to obtain. Why is this the case?

Evidence suggests that there is a tendency for women is often pitching realistic numbers. Men so often overstate and exaggerate that investors often discount the numbers off the bat. Investors, who are often men, will assume that the women entrepreneurs are operating just like the men and inflating their numbers. Therefore, they will provide funding at lower levels than requested. Women need to understand this dynamic and approach their pitches accordingly. Meaning, if your business needs $25,000 ask for $30,000 to ensure that through potential negotiations if your offer is reduced you will end up closer to the point that you need to be.

What should you do if you are unable to obtain funding through a male dominated venture capital partnership is?

Research. Look to Women peer to peer network for venture capital funding. For example: Bumble Fund, Female Founder Fund & Government Grants!

The Government of Canada has developed a great amount of business grants that are specifically being provided for women – look into these options on the Canada.ca website under Business Grants & Financing. You must be prepared to offer a detailed application including details about your product, service, market needs in your region and potential a justification for the amount required and its intended use.

In addition to these grants, there are a number of funds directly solely for women that you can consider, here are a few:

Bumble – Yes, that Bumble. They announced the Bumble Fund to Invest in Women Founders are began accepting applications. They created this fund to combat the reality that women led startups receive 2% of venture capital funding.

BDC – The Woman Entrepreneur initiative has an estimated $200 million to invest in women led technology startups, why not join and submit your application? Their program not only provides the potential access to capital but also mentorship and entrepreneurial resources.

The Billion Dollar Fund for Women was announced in February of 2019 and has set it sights on becoming the largest venture capital fund directed solely towards supporting women led businesses in technology.

These are just a few of the resources that are available, to determine which one you should apply to requires due diligence on your part as a business owner, not only in informing yourselves as to what types of applicants are being selected but more importantly how to create a successful application that will be reviewed.

What is critical when asking someone to invest in your company financially? Transparency in your business and clearly defined answers. You must be willing to show your business income and expenses as part of this process and be able to substantiate your claims for expected revenue in the future. It may happen every so often where someone will invest in the hunch of a business owner but not often. Hard facts are what most investors rely on before they are willing to sign a cheque. Additionally, you want to offer as much information as possible to support your position, holding back only what is necessary and that may be proprietary. Being vague and unclear when asking for financing is not an effective strategy and not yield results.

Lastly, you must be willing to let an outsider into your business and ensure you obtain the appropriate counselling outside of the investor to understand exactly what that means for you and your business. You must understand clearly if you are giving up a controlling interest in your company and the expectations that investors may have in the decision-making process of your business as well.

Much of the above may sound daunting and alarming, but if you have reached this point of consideration it means you have surpassed the initial hurdles of starting a business and ready for the next level of growth. Take your time to research your options, their impact and align them with your business needs and that of yourself.

Good luck to all the incredible entrepreneurs out there!

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Aug 14 2018

Blockchain And CryptoCurrency Careers

In recent months, Bitcoin, other cryptocurrencies, and the blockchain have become very popular topics of conversation. Usually, these discussions revolve around the value of Bitcoin and other digital currencies. As a Career Coach and HR Consultant, I’m more focused on the career opportunities and the HR implications that are related to the blockchain – the technology behind Bitcoin and other cryptocurrencies. In a future post, I’ll address some of the HR issues. In this article, I’ll describe employment opportunities that relate to blockchain technology that are aligned with seven fields of employment.

What is the blockchain?

Just to be sure that we’re all on the same page, let me share a simple definition of the blockchain. If you’re interested in more information about Bitcoin and other cryptocurrencies, here are a couple of links where you can drill down deeper than I can in this article: a 3-minute, non-technical explainer video, and general news and information about cryptocurrencies.

A recent Globe and Mail article offers this definition:

“Blockchain technology is a way of storing and sharing information across a network of users in an open virtual space. Blockchain technology allows for users to look at all transactions simultaneously and in real time. Additionally, since transactions are not stored in any single location, the information is almost impossible to hack.”

Since there’s been so much talk about potential job losses due to the growing use of automation and other forms of technology, it’s a pleasure to talk about the upside — some of the emerging job opportunities linked to blockchain technology and/or cryptocurrencies that we can anticipate.

Seven Employment Opportunities Related to Blockchain Technology and CryptoCurrencies

1) Programmers / Software Developers / Engineers

Since the blockchain and cryptocurrencies are technical, it makes sense to start with the most obvious employment opportunities – the technical ones. There’s a great need for developers and programmers who understand blockchain technology. Part of the problem is that the supply of these subject matter experts (SMEs) is less than their availability. Professors are not teaching it because it’s a field that’s changing constantly. These rapid changes mean that the professors’ lecture notes can become obsolete too quickly. From a practical perspective, it’s not smart to teach courses where you’re constantly updating your lecture materials. Many university professors and college instructors prefer to teach content that’s more “evergreen” and can be reused for a while. Plus, the people who have a solid grip on this content are probably too busy using their knowledge in industries that are more lucrative than college and university campuses.

2) Financial Services (including Accounting/Audit)

Since cryptocurrencies are linked to financial transactions it’s no surprise that there are job and career opportunities that are linked to blockchain technology. Some of these opportunities are in Fintech, which involves computer programs and other technology used to support or enable banking and financial services.

By design, blockchain transactions are linked to every single transaction record that came before them, so no blockchain record can be changed after it has been entered. This is where the term ‘chain’ comes from. More importantly, this implies irreversibility. The concept of irreversibility is extremely important in the field of accounting. For example,

“Within the context of an audit, all relevant transactions would be irrefutable if they were on a blockchain—multi-party involvement would guarantee that they would not have been changed in any way. That will not leave much left for accountants to audit … blockchain will enable more connected and more reliable transactions, requiring less manual intervention.” (Read more about blockchain and the implications for accounting here.)

The Fintech and traditional financial services sector have been exploring the use of cryptocurrencies and the blockchain as a way to improve and modernize existing business models and transfer assets securely and in a traceable manner (read this article to see how Citibank, UBS, and other global banks are using blockchain technology).

3) Food and Agriculture

There are ways that the food and agricultural industries may improve due to these technologies. The blockchain has features that enable a supply chain to deal with food-safety problems much more efficiently. For example, “Wal-Mart, which sells 20% of all food in the U.S., has [just] completed two blockchain pilot projects. Before using the technology, Wal-Mart conducted a traceback test on mangoes in one of its stores. It took six days, 18 hours, and 26 minutes to trace the fruit back to its original farm. … By using blockchain, Wal-Mart can provide all the information the consumer wants in 2.2 seconds.” (click here for more details). When problems can be identified quickly, resources can be deployed to solve the problems in a timely manner. Another benefit is that these technologies have the potential to Uberize the industry by eliminating middlemen and lowering the fees associated with transactions.

Blockchain technology can also be useful for consumers. By scanning a QR code with a smartphone, information including an animal’s date of birth, their use of antibiotics, vaccinations, and where the livestock was harvested can easily be displayed for the consumer.

4) Shipping and Logistics

Often, people who argue against the use of cryptocurrencies like bitcoin talk about the ease with which identities can be masked online and encourage criminal behaviour. My understanding is that this is less true of bitcoin but potentially more likely with other cryptocurrencies. Interestingly, the use of blockchain technology has the potential to eliminate systemic inefficiencies and fraud. The fact that all the transactions contained in the blockchain, a linked system of information that’s secure and transparent, throughout the entire lifecycle of a transaction makes it an extremely practical solution for the shipping and freight industry. Once a shipment is documented on a blockchain, nobody can dispute the validity of the transaction or manipulate the records. Practically speaking, this means that once transactions are noted, ‘smart’ contracts can release any payments that are in escrow which will reduce the time and expense associated with intermediary processing.

For example, in 2015, the FBI estimated that cargo theft is responsible for annual losses of about $30 billion (USD). Cargo includes any commercial shipment that is transported from point A to point B via trucks, planes, trains, ships, etc. These losses/thefts mean that fraudulent middle-men/middle entities are driving up the costs associated with shipping by at least 20%. Just as with insider threats, these cargo-related thefts are under-reported so that the companies involved can avoid reputational damage, embarrassment, higher insurance rates, bad press, etc.

UPS is heavily invested in blockchain technology which should enable a more efficient and cheaper system of managing logistics. Other startups and incumbent parties are also working toward implementing this technology. Organizations and individuals involved in insurance, audits, payments, and customs brokerage may also find advantages associated with blockchain technology.

5) Voting Management

The integrity of voting systems and voting management is another area that can benefit from the tamper-proof quality of blockchain technology. In addition to elections, voting by directors and shareholders is important companies’ decision-making processes, mergers and acquisitions, and other verdicts. Voting by proxy is practical and convenient but it can be vulnerable to manipulation.

6) Currency Exchange

Anyone who has immigrated from certain countries or who has conducted business across international borders has probably experienced the inconvenience and costs associated withcurrency exchange and moving money across borders.

Easier cross-border payments and financial transactions is a real advantage of cryptocurrency technology. The current processes and systems used for moving money across international borders are often burdensome and multi-layered. Using a blockchain can make it a simpler and cheaper process, with built-in accountability, verification, and assurance.

7) Various (non-technical) professional services

It’s anticipated that there will be a need for tax and accounting specialists, consultants who have expertise in strategy and technology, and business analysts in companies and organizations who are using blockchain technology (to read a little more about this click here and here). Some of this may be a shift from similar roles in more traditional lines of business but some of these opportunities may result from new opportunities.

For anyone who’s determined to keep up with new opportunities to offset changes in the workplace that may lead totechnology/automation driven job loss, I hope this article is a good starting point. If you’re interested in the HR-related implications of these emerging technologies and hiring staff to fill some of these roles, please read thisarticle.

If you’re an employee who wants to pivot into one of these emerging areas to stay relevant, or, if you’re an employer/hiring manager who wants to choose future staff wisely I invite you to connect with me privately. I offer a free 15 to 20-minute initial consultation by phone. Or, if you prefer, you can contact me by email, or via direct message on Twitter, Facebook, or LinkedIn.

More than career coaching, it’s career psychology®.

I/O Advisory Services – Building Resilient Careers and Organizations.

Feb 09 2018

Do I Need RRSP’s?

To have RRSPs, or not to have, that is the question.

We’re in RRSP “season”, as 2017 contribution deadlines approach and many of us know we can use RRSPs for tax credits. But do we know exactly how RRSPs work?

When I ask small business owners why they have RRSPs, the most common responses are either “Someone told me I should” or “I want the tax break”. While it’s great to have the credits up front, we should also consider what happens in the long term when we take the money out.

Let’s start with RRSP basics.

WHAT IS AN RRSP?

An RRSP (Registered Retirement Savings Plan) is an account we can use to save and invest money for retirement. Since it’s a registered plan, all contributions and growth are monitored by the federal government based on our Social Insurance Number.

It’s important to note that the RRSP itself is not an investment, it’s simply a “container” that holds investments and these investments must adhere to the rules of the program.

HOW DOES IT WORK?

The idea behind the RRSP is that we invest our money in a tax deferred environment, so we have the advantage of higher compounding growth while the money is in the plan. When we are ready to use the money, we pay income tax on the withdrawals.

Can I open an RRSP?

To be eligible for an RRSP, you must be a Canadian resident for tax purposes, be under the age of 71 and must have contribution room.

What is my contribution room?

You can contribute 18% of your previous year’s income, up to a maximum dollar limit, plus any unused room from previous years.

Your 2017 contribution room will be calculated as 18% of income earned in 2016, up to a maximum of $26,010. You can get your total contribution room from your last CRA Notice of Assessment. All 2017 RRSP contributions must be made before March 1st, 2018.

What can I invest in?

GICs (Guaranteed Investment Certificates) and Mutual Funds are used by many Canadians. Stocks and real estate can also be used.

It’s important to note that your investments should be based on your personal risk tolerance and investment objectives and speaking to an advisor is a great way to make sure you are using a strategy that works for you.

How long can I contribute for?

You can continue contributing to an RRSP until December 31st of the year you turn 71. After that, you can

withdraw all the money and pay withholding taxes on the full amount.
purchase an annuity. There are no withholding taxes on purchasing the annuity, but you pay taxes on the income you receive from it.
convert the RRSP into a RRIF (Registered Retirement Income Fund). There are no withholding taxes on conversion, but you will pay taxes on the income you receive. Once your RRSP has been converted into a RRIF, the government will give you a schedule of the minimum amount you must withdraw per year.

What are some other features of the RRSP?

Spousal RRSP: if you have a spouse in a lower tax bracket and you are in a higher tax bracket, you can contribute to your spouse’s RRSP and have the tax credit go to you
Home Buyer’s Plan (HBP): You can borrow up to $25,000 tax-free from your RRSP to buy your first home. This must be paid back into the RRSP over 15 years, otherwise you’ll end up paying the taxes as if it were a regular withdrawal.
Lifelong Learning Plan (LLP): You can also borrow up to $20,000 to pay for your education but this must be paid back into the RRSP over 10 years.

WHO IS IT RIGHT FOR?

RRSP features can provide many benefits, but these may not necessarily benefit business owners in the long-term.

If your income during your working years will higher than your retirement income, contributing to an RRSP may be a good idea so that when you withdraw the money during retirement, you will be in a lower tax bracket and will likely pay less taxes (e.g. doctors, lawyers and other high-salaried employees).

If you are in a lower tax bracket in your younger years and expect to be earning a higher income during retirement, an RRSP may not be the best thing. As a business owner, this is usually the case – you are in a lower tax bracket in your younger years while you are building your business. As your business expands and becomes more successful, you are likely to have higher income in your retirement years and any withdrawals from an RRSP will be added on as extra income, therefore putting you in a much higher tax bracket.

Of course, there is no quick rule in determining whether to use RRSPs or not. The structure of your business (sole proprietorship, partnership or corporation) plays a major role in how you receive income, and as such it may take some detailed business planning with your lawyer, accountant and financial advisor to figure out the best route for you. It really boils down to the question “Do I want to pay the taxes now, or later?”.

Another option to consider investing your money is a TFSA (Tax Free Savings Account), which I will cover in another article.

To learn more about RRSPs: https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/rrsps-related-plans.html

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Kim Lowrie is an insurance agent and mutual fund representative with World Financial Group.

She and her husband have made it their lifelong mission to help families, individuals and business owners succeed financially.

To find a solution that best fits your needs and goals, connect with Kim:

647.231.9052

klowrie02unjc@wfgmail.ca

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Oct 01 2015

Ottawa Panel of Experts: Canadian Small Business Woman of the Month of September 2015

Rima Aristocrat, Kelly Farrell, Catherine McGillivray, Praveeni Perera, Arti Sharma and Elcho Stewart are six dynamic women who will round up our Panel of Experts this year at our Ottawa Expo. These women are experts in their own right and have made themselves available to support aspiring entrepreneurs. The topic of this year’s panel is Women in Business, Technology and Healthcare. The Panel of Experts discussion will take place at The Westin Ottawa on October 4th, 2015 from noon until 2pm. Admission is absolutely free. Find out about our ladies below and for how you can meet them and ask your questions, go to www.immigrantsmallbizexpo.ca

Jun 18 2015

PLANTING ONE SEED (INVESTMENT) AT A TIME!

This past weekend the weather was finally amazing to get out in the garden, dig through the earth with my fingers and pull out all the weeds before planting my vegetable garden. It got me thinking that it takes one seed at a time to harvest your garden.

What if we took the same view on our investments?

When we first start we are so keen to learn and invest in anything that comes our way – but that can be foolhardy – especially when it comes to investing! WHY?

Ask any successful real estate investor and he or she she will tell you that the secret to their success was knowledge. They learned everything they could before investing in their first property. They planted one seed at a time! Did they stop there? No they keep learning and applying that knowledge to build on their portfolio.

As an investor you must take your time to learn, which strategy suits you best. Is it student rentals, multi-family, rent to own, buy & hold, flipping, just to name a few? Or is it lending your money for a great return or investing in syndicated mortgages or even 2^nd mortgages?

Lending your money or investing in 2^nd mortgages, may not provide as big returns as a bricks and mortar property, but you also don’t have the hassle of being a landlord and dealing with tenant issues.

I was recently approached by a financial advisor, who only believed that the road to wealth was paved on people investing in the stock market. I have nothing against financial advisors, but being a person who lost a lot in the 2009 crash, I did not want to repeat past mistakes, which included investing in the stock market. Does that mean I don’t invest in the stock market at all? NO – I do but I self-direct my investmetns and don’t leave it to somebody else to do it for me – thus I don’t incur huge MER (management expense ratio) fees, which can cut into the growth of my investments. He could not understand why I would not recommend him to my clients.

Taking charge of your financial future should not be left up to somebody else – burrying your head in the sand and hoping your money will be taken care of is also foolhardy! Does it take work to look after your finances? YES, but isn’t it more rewarding to see your garden grow when you have planted those initial seeds yourself?

Planting those seeds takes time but when that garden (investment portfolio) starts to grow, you will reap the rewards!

To your Wealth!

Amina

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Nov 15 2014

CSR for Small Business?

It may seem odd to think of Corporate Social Responsibility as a small business owner, but I think that there’s no better time that now to start thinking about more than just your financial bottom line. If you give thought to how your business is impacting the world environmentally and socially when you’re small, you will have systems in place that will grow as the business grows.

Whether it’s choosing a cause that your business supports because there’s an alignment in each organizations core values or ensuring that you operate your business in an environmentally friendly way that reduces your carbon footprint, you don’t have to have a big operating budget to make a meaningful contribution. It can be easy to think that practicing social responsibility is something only large companies need to worry about because they have the resources to do “big things”, but small business has a role to play as well. While big business can do things on a national or global scale, small business owners can contribute on a local scale, supporting the communities that support them.

Success in business is all about relationships. It’s about building trust with not only your customers, but the community within which you operate your business. I’ve heard it said that a relationship without reciprocity will die and I believe that to be true for us as entrepreneurs and small business owners. We can’t become so consumed by the desire to turn a profit that we forget to give back to the community that supports us by buying our products or services.

When our local communities are thriving, as citizens and business owners we can’t help but benefit. It is in our best interest to build into our businesses a strategy for how we will give back. What can you do to make your community better? Maybe you can do a fundraiser for a local cause, or do a review of your operational practices to see where you can make “green” changes. You don’t have to figure it all out at once, but it’s something that you want to consider.

You don’t have to be a corporation to practice corporate social responsibility. I believe it may actually be easier to practice CSR as a small business owner because we have massive manufacturing plants to reconfigure and retool. We make small, but meaningful changes that will be sustainable as we grow and expand our businesses. What are you going to do to give back to the community that’s supporting you and your business?

Sandra Dawes is a certified life coach specializing in helping women who feel unfulfilled with their 9-5 follow their dreams and pursue their passions. She holds an Honours BA, an MBA as well as a certificate in Dispute Resolution.She has completed her first book,Embrace Your Destiny: 12 Steps to Living the Life You Deserve!
Connect:
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