Canadian Small Business Women

Connection, Synergy, Community

6 mistakes entrepreneurs make when seeking out funding

Praveeni

Entrepreneurs often have many  “great” ideas and rely on funding in the form of a business loan or investors to bring their dreams to light.  Pitching your business and asking for funding can be an intimidating and grueling process. However if successful the payoffs can be huge. Unfortunately many entrepreneurs aren’t successful in securing the funding they require. Here’s a look at 6 mistakes entrepreneurs make when seeking out funding:

  1. Over-valuing their firm or product
    Ok you’ve got an idea- that’s great, but how much is it worth? If it’s your idea it’s probably priceless to you but how much is your business really worth? People tend to over-value their business in hopes of securing a greater investment but that very often fails. Take an objective stance when valuing your business – look at how much you’ve done in sales, your costs and how much revenue you’re really brining in. Remember sales do not denote firm value. Don’t forget to factor in your production, operational and carrying costs.
  1. Presentation & pitch is too long
    Your elevator pitch and investor presentation should be short and informative. Keep your presentation under 10 slides and make your slides concise with 3-5 points per slide. Your elevator pitch should be about a minute long at most. If you can’t summarize your business in under a minute you may need to spend more time understanding your business. No one wants to be stuck listening to a 20 slide presentation.
  1. No concept of market size
    Whenever you offer a product or service you must be aware of how large or small its market is. Whether it’s a nice or mass market item, every product/service has a market. It’s up to you as an entrepreneur to research your market and determine who your target audience is and how much of a market share you would like to capture. Remember 100% market share isn’t always a viable or profitable goal. Be realistic in your market share goals and understand the size of your market.
  1. No professional business plan

A well written, factually correct business plan can garner you the funding you               require. It’s important not to skimp on your business plan. Don’t rush it, take time     to understand the risks, opportunities and profitability of your idea. Make sure you     comprehend your product and what it will take to bring your idea to market.  Many     people overlook the financial aspect of a business plan. Projections can be                     intimidating so seek out professional help if you require it, never assume always ask.

  1. Inability to explain what problem their product solves
    Ok so you’ve got an idea – great! How can it help me? What problem will it solve? Many times entrepreneurs are unable to explain exactly how their product is useful to consumers. This can be off-putting to investors as they think – if a person can’t even explain their own product then how can they sell it? You must fully understand your product or service and how it benefits consumers. Be prepared to answer questions about your own product and your competitor’s offerings as well. The more informed you are the better.
  1. No flexibility
    When asking for funding you need to be flexible. Remember you’re asking someone else to put their trust and money in you and your business. You may not always get the offer you prefer and in some cases may have to counter offer as well. It’s good to be prepared with at least 3 different counter offers when pitching to investors. You should also be open to different kinds of offers. This doesn’t mean give away your whole company for free but listen to what they have to say and run the numbers before you decide to accept, counter or decline. Most importantly be realistic – have a realistic valuation and seek out the appropriate amount for the share you’re offering.

 

Praveeni Perera is the CEO and co-founder of Professional Edge Consulting a corporate training company based in Ottawa offering training and coaching services to clients around the world.  She can be reached via Website, Twitter, Facebook or her Blog.

Grant Misconceptions

Aviary Photo_130605261112039905

Are you a business looking to apply for grants and a bit confused about the process? Well, we’re here to help you demystify some general misconceptions about grant funding and applications.

Misconception #1: Anyone can apply for a grant

The majority of grantmakers narrow the pool of grant applicants to registered charitable organizations and nonprofits. Incorporated businesses and startups are usually left out of the grant equation because, unlike nonprofits, they have the ability to sell a product or service for a profit. That’s why it’s important to be 100% sure your organization is eligible for funding before starting the grant-writing process.

This is not to say that there is no funding out there for small businesses and startups. It is just unlikely it will be in the form of grants, and rather in the form of tax incentives, hiring credits, and when possible, venture capital funding.

Misconception #2: Grant applications consist only of ‘writing’ and ‘submitting’

Grantwriting is based less on your style of writing and more on your capacity to plan a detailed project successfully. Forget flowery language, and focus on the content.

For first-time grant applicants, it is important to research grantmakers’ mandates, as well as their previously funded initiatives. Grantmakers want to make sure your organization is accountable for the funds they distribute to you.

Seeing as they don’t know you personally (yet), the onus is on you to make your case, and back it up with targeted research, data, and information. Take time to prepare grant applications. Make sure you are able to thoroughly analyze your project’s strengths and provide tangible solutions to mitigate any weaknesses.

Misconception #3: If your project is good, you’ll receive funding

This is by far the biggest misconception of all. In fact, there are a lot of great projects out there, created by trustworthy organizations, that will never receive funding.

Grantmakers tend to award funds based on a project’s expected impact in the community. Because grantmakers tend to receive a lot of applications during any given grant cycle, it’s their responsibility to find the ‘best’ projects within very large pools of applicants. They do this by reviewing applicants’:

  • Existing partnerships with community organizations and stakeholders
  • Social media networks and reach
  • Past organizational successes

If you are a new organization, it is likely you won’t have this information yet. To make it easier for your project to receive grant funding consider collaborating directly with a partner organization to build a track record for your project, as well as expand support for it in the community.

Misconception #4: Receiving grant money is easy and quick

The task of the grant reviewing committee is to thoroughly assess hundreds, if not thousands of applications per grant. Of course, this takes a lot of time and patience. That’s why grant funding decisions often take anywhere between 3-8 months, depending on the size of the grant (the bigger the dollar amount, the longer you are likely to wait).

So, if you are counting on a particular grant to fund your latest project, make sure you have alternative funding options at your disposal just in case grant funding is delayed, or doesn’t come through.

Some Final Questions    

Want to know how to avoid unnecessary pain when applying for grants? Prepare answers to the following questions before starting the application process:

  • Which community members and stakeholders will benefit the most from your project?
  • How will you involve participants during the planning and execution phases?
  • How will you measure or evaluate the impact of your project?
  • Do you have a workplan outlining all project steps, timeline, and resources?
  • What experience and/or qualifications does your organization have to carry out this project?
  • If activities continue beyond the term of the grant, how will they be sustained?

Written by Marisol and Silvia Fornoni, Founders of JDC.

JDC supports socially conscious organizations with finding sustainable ways to tell their stories using visual design, engaging content and non-traditional media. We help you with anything from organizing fundraising campaigns to web design and social media management.

http://www.joint-development.com

Facebook, Twitter, Instagram

Easy Steps to Kick-Start Your Business … Practical Tips for Success!

 

yvonne

You’ve been thinking about it, but something keeps stopping you from starting your business? And by now you’ve most likely come across many articles such as this on ‘How to …’. If the truth be told, giving advice is sometimes easier said than done. I myself can testify to that. However, here are a couple of practical tips you can easily implement today to help you raise finances and kick-start your business.

Do your research. Research simply put is knowing your market and customers. How do you know your market? Read trade magazines and newspaper, visit industry seminars or conferences, check online or take a drive round your business geographic area and see what similar services and products exist, sample some of these services or products, ask suppliers about the market, and ask potential customers who they currently patronise. All these and more will help you build a broad picture of the market before you entering.

How do you know your customers? If they will want your products or services and what exactly it is they want? As many people as you come into contact with and see as potential customers, ask them questions. When you go to an event, take the opportunity ask people pertinent questions in a conversation-like manner. Develop a questionnaire, and email to all your family, friends, colleagues and former colleagues, ask them to email to their network of people, and voila! you have conducted your research. However, do bear in mind that the bigger your investment risk and the more complex your business model, the more structured your research should be.

For more information on business research check this article Business Research Demystified

Raising finance. The usual advice is personal savings; loans from family, friends or the bank; government funding; grants; venture capitalists etc. But what if these sources don’t quite cut it for you? You don’t have the savings, you can’t get a loan, or you fall outside the qualifying criteria for grants and funding. Here are some additional avenues and tips;

  1. Trade by barter. Offer your services, products or skills in exchange for goods or services that will help build your business i.e. you need to develop your website, and you are a marketing consultant, why not offer some free consultancy to the web designer in exchange for your website development
  2. Cut down on your personal overheads, which may include; downgrading your car or moving back to live at home saving on the monthly rent, reduce your spend on social outings such as cinemas, suspend club memberships (except of course it is required for effective business networking purposes)
  3. Start your business with incremental steps such as piloting your business idea, or starting with one product or service, and as the business starts bringing in returns, you can then consider expanding and implementing more plans and ideas
  4. Consider alternatives to reduce your start-up cost  If you are low on capital. This includes working from home without needing to lease office space, converting your garage, shared office space, virtual assistants, start with offering your services and products online etc.
  5. Consider crowd funding or sourcing capital from customers or suppliers. With some services pr products you could actually seek to get upfront payments or deposits from clients, which could then be used for your initial capital requirements. A successful example is that of a hosting company who offered potential clients a lifetime hosting package if they would pay a certain amount upfront to help fund the start-up of the business.

These tips are not all-encompassing, and there are many things that go into having a successful business such as a business plan. There is no running away from it either now or later in your business life cycle.  If you need help with your business plan, also read Business Plan Demystified, Writing Your Business Plan Once And For All.

Get a free eBook to get started on your goals: http://eepurl.com/xeDrf

Yvonne is a Change Consultant, Coach and Speaker who is passionate about working with Individuals, Entrepreneurs and Organisations to implement change, drive results and achieve their goals.   She can be reached at:   www.facebook.com/oliveblueinc,www.twitter.com/oliveblueinc, www.oliveblue.com

How Much Should You spend On Marketing?

Kerry George (1)

The amount that you spend on marketing has many different factors to take into consideration. For instance if you are starting a new business and you are well funded or going for a grant you will want to spend a larger percentage on marketing. Nobody has ever heard of you. You need to break into the market place. You will want to define who you are with your branding and put together a website, social media platforms, printed brochures, business cards and more that matches. You will want to carefully select a few strategic partnerships that can work with you to put out your marketing pieces, such as taking a spot in an annual magazine or working with someone to take part in a larger tradeshow. You may want to gather email addresses and build a loyal following using email marketing. Some time and thought should go into this process along with some study to wisely select some of the best pieces to your marketing puzzle.

Sometimes we go online and we see what others are doing, but one needs to compare apples to apples. Your company may not be coming from the same place. A well-established company such as Coca-Cola may only spend 4% a year on marketing. That still equals millions of dollars and the percentage may be enough for them because they are maintaining a presence. They are not trying to create a presence out of thin air.

Your brand new under-funded start up may need to do a lot of online marketing using profiles and setting up free channels. That may work for a while but the reality is that your business is going to have ups and downs. While you are on an upward rise financially you get very busy and you stop doing the things that got you there. That is when you better have your automation in place or else you will need to hire someone to keep the posting consistent.

So what is the right amount to spend?

There is no set number but here is the deal: You can’t afford to not be marketing. Marketing cost money, but it also is the machine that brings in money. So you can’t afford to shut the machine off or even to let it idle. The cost to stop marketing is far greater in lost sales.

In 2013 I worked with a couple of partners and founded www.cibn.ca a business networking organization in Calgary, AB. This new company had a unique advantage. As the CEO I also owned an online marketing company called www.loyal2U.ca and therefore had access to a team of people who created marketing materials and already owned a platform that could promote the CIBN across the city. By using simple online marketing strategies over and over we grew the engaged following of the Canadian Imperial Business Network to over 330,000 people in less than 9 months. The phone rings on a regular basis now as people have found us. Our blogs are viewed by a vast number of people weekly. Our posts are re-posted by fans all across the region and beyond. Sometimes we get interest in attending our events from as far away as New York City. People recognize my face and the faces of the other partners when we are out in the community. I often hear them talk about how they have been following our progress for years. That is quite remarkable for a company that is less than one year old. Why do they think that? It is because of perception. In online marketing, perception is everything. We make a bold statement online. We are everywhere. Our LinkedIn profiles are pimped out. Our Facebook pages are regularly updated. We put out a lot of new content every month and we tweet about it regularly from multiple Twitter accounts. Perception has made us as huge as our market.

You can also grow a large following of people in a relatively short period of time. Use the simple steps of marketing over and over again and invest in yourself. We invested a lot into marketing. We pulled 16 hour days to get more onto the website after the day’s work was done or to get one more blog article written. We often went without other things and took smaller paychecks. We made careful choices, watched the results and then reinvested again when something worked. We partnered with others. We bartered when necessary. We spent and spent and spent to make it happen, but now it is happening.

Do not accept the reality that nobody knows who you are. Create a new reality. Use whatever is free. Use whatever you can trade. Use your connections. Use your head and be smart. Use boldness. Use a percentage if you need to but understand that nothing equals no return. The larger you pour out your marketing, the bigger the benefits later.

The Answer To The Question

The answer to how much should I spend is this: Spend whatever it takes. Keep spending and keep trying until you are making so much money you don’t have time to spend it all. Then spend some more, create an exit strategy and sell your business. When you successfully own your business and it no longer owns all of you and all of your time, you are good to go.

Happy Marketing!

Kerry George is the owner of the Canadian Imperial Business Network which is currently the largest business network in Alberta and rapidly expanding across the country. She is a serial entrepreneur/author and speaker with a zest for life and a passion to help others succeed in increasing their potential and their bottom line. Kerry has several publications and blogs that you can follow and welcomes most interaction online.

Twitter

@createloyalty2U

@CIBNtweets

@yycbiznetwork

Blogs

http://loyal2u.blogspot.ca/

http://calgarybiz.net/blog-3/

http://kidsincowtown.wordpress.com/

http://loyal2u.ca/category/social-media-2/linkedin/

Importance of a Business Plan

anna

When most businesses develop a business plan the intention is for funding purposes.  They take the information to the banking and investors to gather the monies they require to grow or promote their businesses.  However a good business plan is much more that funding it is about clarity and direction.

The time invested in working through the different areas of your business plan is a path to enlightenment on your business and how you choose to drive your company.  As you develop your plan a greater understanding evolves for your marketing, documentation, policies, and sales projections.  As the plan is implemented you make adjustments based on the realities of business.  These adjustments are imperative to making improvements in the direction of your company.

The business plan starts with a mission and vision.  This is the reason you want to have your company.  Who and you serving and why is it important?  It creates a set of values that as a company you choose to stand by.  It becomes the reason for change to occur.  It all goes back to the mission and vision and does the change support your mission.

The road map to your success is in your business plan and the turns and corrections we make are a learning curve for company growth and change.  We set benchmarks and goals and track our performance so that we can regulate whether we are on the right path.

The plan should include your industry and the changes that are occurring and how your company is going to grow along with the change.  This includes a clear idea of your clients and customers.  It also includes major competitors and how you are going to compete along side of them.

Be honest with yourself about the strengths and weakness of your company.  If customer service is a strength hem use it to your advantage and if delivery is a weakness make a plan of improvement.  It may also be a great idea to list all your services/product.  You may surprise yourself on which items are actually making you money once you start the analysis.

A large part of the business plan should include an explanation of what and how you are going to market your products or service.  A review of the revenue, cost and projected profit should be part of your plan. All this is your road map to success!!!

Anna Ottaviani is a Board Certified NLP Master Practitioner & Master Coach, Board Certified Master Hypnotherapist,Creating Your Future® , Time Line® Therapist Practitioner and Reiki Master. Her methods are unique and tailored to each individual client. She can be reached at www.sucessfullyyou.ca or by phone at 289-221-5772. You can follow her on Facebook at http://www.facebook.com/successfullyyou?ref=ts&fref=ts

Stay Social with Canadian Small Business Women: