Starting a Successful Business in Trying Times

Becoming an entrepreneur is not always the easy choice. Especially now, when post-pandemic recovery is being marred with the recent economic headwinds that have brought on a new set of challenges for Canadian entrepreneurs. From rising costs, supply-chain issues, logistical delays, and financing troubles, the list continues to grow.

The recently concluded BDC Small Business Week 2022 included a panel discussion on “Starting a Business in Trying Times” featuring Futurpreneur’s CEO, Karen Greve Young, and Sandra Odendahl, Senior Vice President and Head of Sustainability and Diversity at BDC, as the guest speaker and moderator. They were joined by Louis Pallascio, Robyn Cruz, and Nicola Hamilton, three young entrepreneurs who shared their entrepreneurial journey with the audience.

Over the past couple of years, the market instability has affected small businesses in unprecedented ways, and resource management as well as supply chain issues have acted as barriers for entrepreneurs to run their businesses smoothly. For Robyn, founder of Enn Taant, a camping and camping gear business, those challenges started with the purchasing process: “I was originally going to purchase all my tents from the UK, but the import fees and delivery charges were outrageous”. She explained that turning to local suppliers not only helped her reduce costs, but also allowed her to find a community that continues to provide advice and support her business.

For Louis, founder of Studios Machiavel, building a team of like-minded individuals was the most challenging aspect of his entrepreneurial journey: “Although the Futurpreneur and BDC loan helped a lot, recruitment might not be the first thing you want to spend that influx of capital on”. It was important for Louis to focus on building a culture of collaboration or as he puts it, “a family”, which allowed his business to present a united front while facing stakeholders.

Nicola, founder of Issues Magazine Shop, experienced similar hurdles: “As a retail business, bringing in products is one of the most challenging aspects, and where you’re going to spend the most”. She revealed that taking the time to experiment and explore which partners aligned best with her values and her financial situation was crucial during the first few months post-launch. She also admitted that while it was not in her plans to hire immediately following the opening of her company, it was the best decision she made: “Having a team there with you from the very beginning does build that culture and community.”

The panellists affirmed that perseverance, patience, self-belief and confidence in your community, are key to starting and running a successful business in uncertain times

Hundreds of aspiring entrepreneurs attended the event and received precious advice from our panelists who encouraged them to ask for help, including checking out local resources such as universities and incubators that can help them in incorporating their business, or attending networking events in order to meet like-minded individuals they can collaborate with on their journey.

Watch the full recording of the panel discussion on YouTube.

 

Common Questions About Incorporation

Whether you’re an established entrepreneur or a new sole proprietor, if you’re contemplating incorporating your business, you likely have questions… lots of questions. That’s great! Inquiring and doing your research is the first step to incorporating––and that’s what we’re here to help you with.  

Many new entrepreneurs come to us with a multitude of questions about incorporating, so we’ve endeavored to give you as much information as we can to help set you on the path to success. 

What does it mean to incorporate my business? 

What are the pros and cons of incorporating? 

Pros: 

  • Limited liability 
  • Continuous life 
  • Tax advantages 
  • Need funding? No problem(ish) 
  • Enhanced credibility 

Cons: 

  • Far more complicated 
  • You don’t have entire control 

How do I incorporate my business? 

Some frequently asked questions 

  1. 1. What are Articles of Incorporation?
  2. 2. What is a minute book?
  3. 3. Should I incorporate federally or provincially?
  4. 4. Do I have to incorporate before starting my business?
  5. 5. What is the cost of incorporation?

 

What does it mean to incorporate my business? 

Incorporating your business means legally separating yourself from your company. This influences business spheres like taxes, liability, and salary.  

To incorporate your business, you first need to decide if you want to incorporate federally or provincially. This will impact where you can operate your business and even how far name protection extends (will it be just in the province you’re operating or will it be across Canada?).   

The process of incorporating includes filing an articles of incorporation, along with paying the appropriate fees and submitting a NUANS search report. If this sounds overwhelming, don’t worry. There’s help for that, too.  

What are the pros and cons of incorporating? 

You may be asking yourself, “why should I incorporate my business?” That’s a reasonable question, after all, incorporating can feel like a big step for your business. That’s why it’s important to draw up a pros and cons list.   

Lucky for you, we’ve done exactly that.  

Pros: 

Limited liability  

This is the main reason why entrepreneurs choose to incorporate their businesses. When you incorporate your business, it becomes its own legal entity. That means assets that don’t belong to the business (such as your personal savings, your home, car, and any other assets in your name) are protected from potential  lawsuits or debt collections.  

However, there are always some exceptions where directors can be held personally liable. These are: 

 Any unpaid employee wages and vacation pay, up to six and 12 months, respectively. 

  • Employee deductions and remittances, including source deductions for employee income taxes, as well as EI and CPP contributions. 
  • Any GST/HST collections that have not been remitted.  

Continuous life 

Because a corporation is an entity separate from its directors (you), your company can remain in existence in perpetuity regardless of what happens to you or your business partners.  

For example, in some business structures, such as sole proprietorship, the business will dissolve if the owner leaves. However, with a corporation, shareholders can usually transfer their interest if they decide to pull out of the business. This also makes corporations a lot easier to sell than sole proprietorships. 

Tax advantages 

This is probably the second most common reason why sole proprietors choose to incorporate: the tax advantages it offers.  

Let’s work with an example: You own your business as a sole proprietor and, therefore, you pay personal income tax on all your business’s earnings, regardless of how much you actually take home as a salary or reinvest back into it. But at some point, the income your business makes puts your personal income into a much higher tax bracket, and you find yourself paying the government a lot more than is really necessary. In this situation, it’s beneficial to incorporate your business in order to pay less personal income tax while still drawing a salary (which you will pay personal income tax on). 

The major tax benefit comes courtesy of corporate tax rates being considerably lower than personal income tax rates.  

Need funding? No problem(ish) 

Getting a business off the ground or expanding your business is tough work and sometimes requires a lot of funds. This might be money you just don’t have laying around in your personal savings. That’s where funding can help 

Corporations are far more likely to be awarded business grants, be given loans and credit lines, and secure investors than sole proprietorships are. In fact, you’ll be hard-pressed to find an investor who will invest in a business that can’t sell them shares.  

Enhanced credibility 

Speaking of credit: professional credibility goes a long way in the business world, and a company that has “Ltd.” or “Inc.” tacked onto the end of its name is far more likely to be seen as credible. This helps establish you as a professional force, and you’ll be more likely to earn respect from future clients, as well as suppliers and other businesses you’ll work with. 

Cons: 

Far more complicated  

Incorporating a business is by far more complicated than registering as a sole proprietorship. It requires a lot more paperwork and, if you decide to incorporate federally, that paperwork is even more detailed.  

Keeping your incorporation status also requires annual updates. Keeping a minute book, which is a collection of documents that basically set out the entire framework of your company, is also legally required.  

Tax advantages 

It also works the other way around if you lose money in your business. If, for example, you are incorporated and you lose money in your first year of business you cannot claim those loses (you have to carry those loses forward until you make a profit in subsequent years). As a sole proprietorship you are allowed to claim business loses against any other income you make from the start.   

You don’t have entire control 

This is a scary thing for many business owners considering incorporation. As the owner, you no longer have entire control over what happens in your business as you may have other directors, shareholders, and investors. So think critically about whether this is something you can manage. 

How do I incorporate my business? 

Incorporating your business is a detailed process that needs to be done correctly. Some business owners choose to hire a lawyer, but the fees can be prohibitive. That said, doing it yourself isn’t always recommended as it can take a lot of time and, if not done properly, can be costly down the road.  

That’s why Ownr is here to help. Ownr can incorporate your business for a fraction of the cost than if you’d hired a lawyer. Plus, you get top-tier customer service, as well as an online dashboard so you can keep track of all of your documents and Minute Book.  

If you do choose to do it yourself, incorporating your business takes a few steps: 

Step 1: Decide where to incorporate 

In Canada, you have the option to incorporate federally or provincially. As mentioned above, the main difference is where you’re permitted to conduct your business. Incorporating provincially means you’ll only be able to operate within that province, while incorporating federally allows your corporation to operate across Canada.  

Keep in mind that if you choose to incorporate your business federally, you’ll still need to file your articles of incorporation in your  province of operation as well.  

Step 2: Choose a business name 

This can be a really fun process, but unlike registering a sole proprietorship, you do need to have a NUANS report filed alongside your articles of incorporation.  

A business name is typically threefold: 

A distinctive element + a descriptive element + a legal identifier 

For example: 

Rosie’s [distinctive element] + Roses [descriptive] + Inc. [legal identifier] 

Step 3: Prepare your documents 

You’ll need to prepare your articles of incorporation, which is the blueprint for your business, and outlines your mission, location, business activities and restrictions, the number of directors and shareholders, share structure, and restrictions or share transfers.  

Step 4: Submit your application 

Ensure you have all your documents in order before submitting your application online or by regular mail. Check with your regional requirements as provinces can vary. These documents will include your NUANS name search report, registered office address, board of directors list, and filing fee. You’ll then receive your certificate of incorporation. 

Step 5: Complete additional tasks 

The process isn’t quite finished after receiving your certificate. There are a number of duties you are legally required to fulfill in order to maintain your incorporation status, such as drafting your corporate bylaws, issuing share certificates, creating a minute book, and registering your business provincially.  

Incorporating your business can be an overwhelming undertaking. That’s why it’s important to seek help where you need it. Ask questions and even inquire within your own business community, even if just to reassure you and relieve some anxiety. However, the easiest way to incorporate and be sure you’re doing so correctly is to use our services at Ownr. 

Some frequently asked questions 

  1. What are articles of incorporation?

Articles of incorporation are your legal documents submitted to the provincial, territorial, or federal governments in Canada. They’re used to establish your business as a legal entity and help set out your corporation’s purpose and regulations.  

For a full rundown on articles of incorporation, check out this guide 

  1. What is a minute book?

A minute book is a collection of essential documents that you need to maintain as part of your incorporation status. This includes: 

Articles of amendment 

  • Bylaws and amendments 
  • Unanimous shareholder agreements 
  • Minutes of meetings and shareholder resolutions  
  • Notices filed 
  • A share register with shareholder names and addresses and details of the shares held 
  • A securities register 

Your minute book needs to be updated at all times and kept in a secure location. Storing it online is a great idea, and Ownr can help you do that.   

  1. Should I incorporate federally or provincially?

This depends on your business goals. If you’re looking to conduct business across Canada, or need business name protection federally rather than just provincially, you may want to consider federal incorporation. If not, provincial incorporation is a simpler process. 

Here’s a handy guide to help you through this decision.  

  1. Do I have to incorporate before starting my business?

Not at all! In fact, there are many sole proprietors who choose to incorporate long after they’ve been in business. It’s really an individual thing and something that you should do only when it’s right for you. 

  1. What is the cost of incorporation?

The cost of incorporation depends on where you incorporate, if you incorporate federally or provincially, and if you do it yourself, hire a lawyer, or use help like Ownr. For filing fees, it’s best to check with your region.  

Ready to take the next step? 

Choosing to incorporate your business is a big decision and one you might need some help with. When you do decide to register, Ownr can help you for a fraction of the cost of hiring a lawyer, and do so accurately and quickly. Plus, you’ll get all kinds of perks like a free NUANS report, minute book updates, 24/7 online access to all your documents, one-on-one onboarding, and ongoing support to set you up for success. 

Choosing Between Federal vs Provincial Incorporation

If you’re an entrepreneur looking into incorporating your business, you probably have lots of questions. Incorporating is a big decision, and there is a lot of advice that can make it far more complex than it needs to be.

One of the big questions to ask yourself is “should I incorporate federally or provincially?”

The answer is: it depends.

There are a few things you should know before you make this decision. That’s where we’re here to help.

What does it mean to incorporate your business?

First, what does incorporating your business even mean? A few things, actually.

Incorporating means separating your business legally from you personally. A sole proprietorship or partnership business is not separated legally or for tax purposes from the owner(s). Sure, an owner pays their taxes as a business and claims business expenses, but at the end of the day, income earned by the business is still personal income.

This also means that the owners of the business are personally liable for all the operations of the business, including debts and legal obligations. This means that if there are ever any debt collections or lawsuits, those actions will be brought against the owners of the business rather than the business itself, exposing the owners to possible financial risk and loss of personal assets, such as real estate, cars, computers, etc.

In contrast, a corporation is an entity that is legally separate from its owners and is governed by the corporation legislation in the region it’s incorporated, whether that’s federally or provincially. A corporation has directors and shareholders, and legal responsibilities to keep their incorporation documents up to date and to file any changes.

Once you reach a tax threshold with your business, you may want to consider incorporating, thus saving money you can invest back into your business. Win, win!

If you do decide to incorporate your business, the next step is to decide if you’re going to incorporate federally or provincially.

Choosing between federal vs provincial incorporation

While the primary difference between incorporations and sole proprietorships is the separation of legal entities, including finances, there are also differences between incorporating federally and provincially.

Here’s a rundown of the differences between provincial and federal incorporation:

Incorporating your business provincially

Incorporating your business provincially means you are only conducting business in that province in which you are incorporated. For many small business owners, this is perfectly okay. However, if you want to expand into other provinces or territories, you might run into difficulties.

Incorporating provincially means that your company then operates under the provincial legislation that governs corporations in your region. For the most part, incorporating provincially means the same across provinces, however there are some variations. It’s best to become familiar with the requirements of your own province.

When you incorporate provincially, your business name is then protected in that province. But that province only. There might be another business in another province that is incorporated under the same name, and this is entirely legal. If you want to protect your business name across Canada, you’ll have to do so federally.

For many small business owners who don’t intend to conduct business across Canada, incorporating provincially is far more time and cost effective than incorporating federally. When incorporating provincially, you only need to file your documents on a provincial level. Provincial incorporation fees tend to be less than federal, and the extent of documentation is less onerous.

However, regardless of whether you’re incorporating provincially or federally, undertaking this process alone can be a challenge, and hiring a lawyer can be cost prohibitive. Using a service to help you incorporate your business can save you time and money. And costly errors!

Overall, here are the main points:

  • Provincial incorporation means only conducting business in that province
  • Provincial incorporation protects your business name in that province only
  • Provincial incorporation is usually less expensive and time consuming than federal incorporation

Here are some provincial resources:

Incorporating your business federally

Federal incorporation in Canada is governed by Corporations Canada, and offers generally wider protections.

Federal incorporation allows you to conduct business in all provinces and territories. If you incorporate provincially, you can only conduct business in that province. If you want to expand into another province or territory, you’ll need to incorporate in that region as well. This can increase costs of incorporation. Federal incorporation requires more annual paperwork than provincial incorporation, and the initial cost of incorporation is higher than provincial.

However, if you incorporate federally, you’ll still need to incorporate in the province in which your business resides. For example, if you are an Ontario business owner and want to incorporate federally, you’ll need to do so both with Corporations Canada and the Province of Ontario. By incorporating federally however, you will be allowed to conduct business all across Canada.

Alongside being able to conduct business across Canada, incorporating federally also gives you federal business name protection, a factor that is important to a lot of business owners and a big reason why they choose to incorporate federally. If you incorporate provincially and find you need to incorporate in another province, there is a chance you will have to operate under a different business name. There may also be the added complication that if you only have name protection in the province or territory you operate in, there might be another business in another jurisdiction that is operating under the same or a very similar name as yours.

Overall, here are the main points:

  • Federal incorporation allows you to conduct business across Canada
  • Federal incorporation protects your business name across Canada
  • Federal incorporation is more expensive and time consuming than provincial incorporation
  • If you incorporate federally, you’ll still need to incorporate your business in the province in which you primarily operate

Making the final decision: federal or provincial incorporation

Making the final decision to incorporate your business can be a tough one. You might want to talk to some colleagues and other business owners in your community. Finding a mentor is also a great idea as they are savvy in the business world and can help guide you through these decisions.

A few questions to ask yourself are:

  • Am I looking to expand into other provinces in Canada?
  • Do I want name protection across Canada or just my province?
  • What resources do I have available to undertake incorporation?
  • What are my future business growth goals?

Regardless of whether you incorporate provincially or federally, you’ll most likely need some guidance. Where lawyers can be costly, Ownr makes it simple for you to set up your business’ legal structure, so you can focus on growing your business.

Preparing to Work in Canada as a Newcomer: Q&A with Shawn McCarty of IAF Canada

We all know the benefits of starting your own business. The flexibility, the financial independence and the opportunity to follow your passion are all huge reasons why many people become entrepreneurs.

However, we don’t always talk about the barriers. And if you’re a recent immigrant, there can be even more challenges.

Of course, nobody becomes an entrepreneur because they want to take the easy road. However, if you’re looking to enter the workforce or start a business as a newcomer, there are some important things you need to know first.

Fortunately, we had the opportunity to connect with Shawn McCarty, Manager, Key Partnerships at Immigrant Access Fund (IAF) Canada. IAF Canada supports highly-skilled and internationally trained immigrants and refugees by providing micro loans that they can put towards education, course materials and other expenses related to building a career in Canada.

We caught up with Shawn to learn more about IAF and how newcomers can successfully transition into life in Canada.

1) We often hear stories about immigrants with PhDs and extensive work experience struggling to find work in their field when they come to Canada. Why does this happen?

Though many immigrants are welcomed to Canada because of their existing skills, there are typically steep costs associated with becoming job-ready in this country. Thousands, or even tens of thousands, of dollars may be required to cover licensing and/or training courses required by Canadian industry or law.

For newcomers lacking income, collateral or a credit history, this might mean years of struggling in low-level jobs while earning credentials for a field in which they may have decades of experience.

Barriers to economic integration of newcomers is an issue for all Canadians. When newcomer potential is squandered, they earn less, contribute less and feel less a part of Canadian society.

When immigrant professionals have a chance to earn their credentials and achieve their full working potential they thrive, and they help their families and communities thrive.

2) How does the Immigrant Access Fund help newcomers transition to Canada?

Immigrant Access Fund is a non-profit charitable organization able to lend up to $10,000 for costs related to rebuilding one’s credentials in Canada.

The loan can pay for education, exams, course materials, living allowance, and most other expenses related to obtaining needed qualifications. Canadian credit history, income and employment is not required, unlike almost all other mainstream credit providers.

As a national organization (available in every province and territory, except for Quebec), IAF is a proud part of Canada’s immigrant-serving community of educators, employment and settlement service providers, and charities.

3) Apart from financial barriers, what are some other issues that newcomers face?

The employer demand for “Canadian experience” looms large over newcomer professionals seeking to re-enter their field.

What makes this expectation so intimidating is that there is no single definition for what Canadian experience really means. For some employers, it might refer to possessing formal credentials from a Canadian educational institution. For others, it could mean having worked for months or even years in Canada. Employers may even insist on Canadian experience without knowing how they themselves might define it.

Another major challenge, particularly for those newcomers entering regulated professions, can be complex or confusing licensing pathways.

  • How many exams are required for licensing?
  • How frequently are they offered, and at what cost?
  • Should I first qualify for a lesser position and spend a few years gaining experience?

These questions are just the beginning, and the answers are rarely available all in one place. One result can be “option paralysis”, when choices become so overwhelming that giving up, even temporarily, becomes the easiest route.

4) What can newcomers do to address these challenges?

While it is obviously essential to have the credentials required by legal or industry standards, newcomers should not let the informal demand for “Canadian experience” belittle their existing skills and experience.

Have confidence that your experience earned abroad still matters, and don’t be afraid to talk about it in interviews alongside your newer Canadian-earned qualifications. Quality employers will listen.

For those newcomers overwhelmed by credentialing options, your first step is to take advantage of the many resources available. A local YMCA/YWCA, settlement agency or employment agency can link to career counsellors and other services tailored to newcomer professionals.

This might include educational bridging program or occupation-specific language training particular to one’s field. Enrolling in a mentorship program is also an excellent way to build a professional network in a new field.

5) Is there anything newcomers can do before they come to Canada to help ease their transition?

Pre-arrival services have come a long way in recent years, so seek out an online program or check if a local office is available in your country or region. It is never too early to start building your plan.

Begin with The Canadian Information Centre for International Credentials (CICIC) to review the requirements for working in your profession in Canada. In some cases, such as for internationally educated nurses, the assessment process can be started well before you move to Canada.

6) What about newcomers who want to start a business? What advice would you give them?

Consider how contacts and experiences from abroad can help boost your business efforts in Canada. You have a global network. Use it!

Domestic businesses might spend a lot of time and money to develop the kind of international connections you already possess. So too with the community and ethno-cultural networks in Canada, which may be keen to support you as a new business owner.

7) Is there anything else you’d like to add?

I cannot overstate the importance of starting with a well-researched, achievable plan for gaining one’s credentials in Canada. At IAF we often help good people in difficult situations because they jumped into unnecessary programs which wasted their time and money.

Avoid that by having a clear goal, and knowing the steps that will achieve it. Always review your plan with a career counsellor, a mentor, or someone else you trust. Finally, know how much it is going to cost, and what help may be available along the way.

IAF Canada

Written by: Jasmine Williams, Social Media and Content Specialist, Futurpreneur Canada

Spotlight on Seahorse Salon: A Safe Haven for All Hair Textures

Getting your hair done is a great feeling. While you might arrive looking less-than-perfect, by the end of your appointment, your new ‘do will have you feeling like a changed person.

However, the salon experience does not always go so smoothly for everyone. Anyone with textured or curly hair can understand the struggle of finding a hair salon that caters to you. Fortunately, entrepreneur Jenn Ghaney saw this hole in the market and decided to do something about it. She started The Seahorse Salon with the goal of it being a “safe haven for clients with wavy, curly and textured hair.”

Seahorse Salon

Jenn was born and raised in Newfoundland and Labrador and starting her career as a hairstylist in St John’s. While she was passionate about her work, she always knew there was something more in store for her. “I moved around the world only to return home again with ideas for starting a business,” she said. “Newfoundland and Labrador hold a great deal of potential for entrepreneurs; locals are very eager to support small businesses and I wanted to start a business that would support and connect others like me.”

The idea for Seahorse Salon stemmed from Jenn working with clients with curly, kinky and wavy hair. “Listening to each curly client in my chair, I sensed the frustration with a lifetime of having unmanageable hair,” she said. “By establishing my own safe haven for curly clients, they could feel comfortable in an environment that catered just to them.”

In addition to their vision of inclusivity, Seahorse only works with natural hair products and prides itself on providing “top education to every client on how to care for their hair.”

Jenn is also a very community-oriented entrepreneur. Her salon sells local goods and displays local art to support her community’s economy. Jenn is also connected to Green Circle Salons, an organization dedicated to reducing salon waste, and the Dresscode Project, which is dedicated to creating a safe salon space for the LGBT+ community. In the future, Jenn plans to collaborate and engage with other local businesses.

Jenn has had great success in building Seahorse Salon’s team and customer base and is looking to hire a new stylist in the future as their client list continues to grow.

When Jenn was starting out, she turned to Futurpreneur Canada for financing and mentoring support. “Without this amazing initiative, my company could not exist,” she says. “From providing me with the blueprint for writing a business plan to having my mentor, Kevin Pomroy, and the local Business Development Manager, Scott Andrews, answer any business questions I may have, Futurpreneur has proved invaluable to my success, both in financing and in mentorship.”

Seahorse salon Founder

Whether you’re just starting out or have been in business for a few years, having a mentor is incredibly valuable for an entrepreneur. “I knew my industry and my trade inside and out; however, I was lacking in the skills needed to apply to the business side. My mentor has assisted me with these concerns and has directed me to the people that I should seek additional help from,” she said.

Her advice to service-based entrepreneurs looking to launch their first business? “Know your craft and follow your gut. Be the absolute best you can be at your craft and deliver that to each and every client.  Stay true to your passion and open to learning as you go. If your clients feel connected to the company, they will help grow the business with you.”

Have a great business idea? Check out our programs and services

Written by: Sara Pivato, Social Media & Content Coordinator, Futurpreneur Canada

October Weekend Reading List

It’s time for a roundup of some great entrepreneurship and small business content we found over the last few weeks. Need a weekend read? Here’s a list of informative and interesting articles to choose from.

How slower growth can get you to the finish line with less chaos by Rick Spencen – Financial Post

There is a lot of pressure on today’s tech start-ups to scale, scale, scale – and fast. However, for most non-tech small businesses, this doesn’t have to be the case. This article in the Financial Post discusses the benefits of slow growth.

New technologies lead Edison-era electricity grid into the future by John Barber – Toronto Star

Calgary-based entrepreneur Brent Harris, founder of Eguana Technologies, is making traction in the green energy market. This article in the Toronto Star dives into the entrepreneur’s success, how he’s taking on Tesla’s Elon Musk and how his solar energy technology is bringing clean energy to remote areas around the world.

5 Low-Cost Ways to Get Started With Video Marketing by Aaron Agius – Entrepreneur

Video content can be a powerful tool to attract new customers. According to recent studies, more than 60% of marketers and small business owners are putting more money into video marketing than ever before. This article from Entrepreneur highlights five cost-efficient ways to create compelling video content.

How you and your co-founder can develop a reliable relationship by Firas Kittaneh – The Next Web

Co-founding a business has many benefits. However, as much as the partnership can provide a sense of stability, relationships of this nature need rules and established expectations or else they can easily go sour. This piece from The Next Web discusses some tips and strategies to ensure your co-founder relationship is reliable and working in the best interest of your business.

Happy Reading!

Weekend Reading List

It’s time for a roundup of some great entrepreneurship content we found over the last few weeks. Looking for a weekend read? Check out the following articles to stay informed and inspired.

Entrepreneur + Traveler: Interview with Brianne Miers” by Lauren Marinigh, Twirl the Globe

It may seem as though it would be easier to pick up and travel when you work for yourself, but it can be quite the balancing act. In this interview, Brianne Miers, founder of Kind Communications, discusses how she is able to travel throughout the year while managing her company.

Coffee leaf innovator Wize Monkey to hit 300 U.S. stores” by Randy Shore, Vancouver Sun

Futurpreneur Canada-supported business Wize Monkey shared some good news with the Vancouver Sun – their brand of coffee leaf teas will soon be available in 300 stores across the US. The article also covers their growth as a brand and how they have disrupted coffee and tea markets since their launch in 2014.

“Turning the dead into vinyl records” by Lorelei Mihala, BBC News

End-of-life industry start-ups have been making headlines recently. For instance, this BBC News article features Jason Leach and his company And Vinyly, a business that infuses ashes into vinyl records to help customers honour their late loved ones. The article also mentions Justin Crowe and his business Chronicle Creations, which uses people’s ashes to create diamonds, jewelry, and other home decor.

“Opinion: Empowering entrepreneurship through the sharing economy” by Paulina Cameron, Vancouver Sun

As the cost of living rises in Vancouver and across Canada, novice entrepreneurs are finding it hard to survive. Paulina Cameron, Regional Director of BC and Yukon at Futurpreneur Canada, shares her insights in this opinion editorial about how the sharing economy can empower young entrepreneurs in their early stages of business.

 

Happy Reading!

Growing your Small Business: How to Create an Advisory Board

You have finally launched your business! How has it been so far? Did the performance of your start-up meet your expectations?

Whether you are very, somewhat or not at all satisfied with its performance, there is no doubt that one day, you will want to improve it. And when that time comes, you will be overwhelmed with quick tips on that matter. The Internet is full of these advice because improving small businesses performance has become a real obsession.

And among these insights, you’ll surely read the one recommending that you create your own advisory board since the benefits of such committee are being increasingly promoted.

An advisory board, does that sound complex and backbreaking to you? This is why many entrepreneurs are reluctant to jump in. They dread the efforts and the time required to create such a board.

However, advisory boards are accessible and flexible tools, and their effectiveness has successfully been proven. Despite that fact, less than 6% of Canadian small businesses have created their own because the concept is still misty to many entrepreneurs

What is an advisory board?

An advisory board is basically a pluridisciplinary group of experts who meet to provide guidance to the entrepreneur on various subjects. The meetings are held on a monthly or quarterly basis, and most of the time, the experts are providing their insights without compensation. They help the business owner for free because they care about his or her success.

This way, the entrepreneur gets access to a group of experts that analyses strategic issues touching his or her business in order to help in the decision process making. An advisory board is not a free consulting service, but rather a group of strategic thinking, giving the entrepreneur clearer orientation to develop his or her business.

Are advisory boards really effective?

In one word: yes!

Many studies have shown that advisory boards help improving small businesses performance. They usually help the business double its short-term productivity. Then, businesses using advisory boards increase their productivity by an average of 18% compared to those who don’t have one. Moreover, small businesses with an advisory board typically have sales higher by 24%. This is substantial!

Advisory boards also have a positive impact on the survival rate of businesses, on their level of innovation, their profitability and their operational risk management capacity.

With this information only, the creation of an advisory board is justified. That being said, there is another benefit to advisory boards that is even more important: the businesses that do create one are more likely to initiate growth and reorganization projects. Since small businesses evolve and expand through these kinds of projects, it is safe to say that it is the ultimate benefit of having an advisory board. The business can look at new markets or consider to pivot its business model.

 

Because such projects involve in-depth strategic planning, they are not easy to materialize if entrepreneurs operate their business in a vacuum. Yet, if you have created an advisory board, this kind of strategic consideration becomes standard practice and allows for expansion and reorganization projects.

The power of self-examination

A study has shown that one of the benefits of advisory boards is to help entrepreneurs challenge themselves. Even the simple action of getting ready for the board’s meetings forces them to step back and put on the table all the challenges their business is facing[1].

Through this meeting preparation, entrepreneurs learn to ask themselves the good questions and to identify their business orientations by themselves. This is a major advantage because it empowers entrepreneurs from a strategical point of view. They learn to think in a more strategical way and take better decisions regarding their business.

First step to create an advisory board

There is a good chance that this information inspired you to create your own advisory board, and it’s normal. However, don’t rush into things. The creation process takes time and efforts, beforehand as well as afterward.

You need to know that most advisory boards are created from the entrepreneur’s personal network. These personal relations help the business owner to find the experts that will be on the board. Therefore, don’t look any further. However, in some rare cases, board members are found outside of the entrepreneur’s network, through professional services or advertising (8% of cases).

If you wish to go ahead and create your own advisory board, the first step is to identify the strategic needs of your business. In other words, this means that you have to ask yourself what kind of experts you need. What areas of expertise are you less comfortable with? Sales? Financial decisions? You also have to identify the business sectors you are less familiar with but need to get to know better to develop your business, such as finances or charity.  Once you identified your needs, review your inner circle to see who can help you. If you can’t find anyone in your immediate network, ask yourself who could connect you with the right people. After all, aren’t we always looking for the friend of a friend, whether it’s for a painting job or an advisory board?

I wish you an exciting adventure with your new advisory board. You’ll quickly see the benefits!

For those who are curious to know more: Advisory boards: an untapped resource for businesses, BDC study, March 2014

Written by: Jean-Philippe L’Écuyer, Entrepeneur-in-Residence, Futurpreneur Canada

[1] Christia, Chapdelaine & Filion, 2010, HEC Montréal.

Customer Loyalty – the Golden Rules

If you’re like me, you get more than a little irritated when some company offers you a new loyalty card. Another loyalty program, another account to create online, another password to remember… All this just to get a free coffee, a discount on a purchase or some useless plastic dishes. What a waste of time!

The proliferation of loyalty programs has eroded the real meaning of customer loyalty. Mechanized, replicated, trivialized and imitated, today’s loyalty programs show what a profound misunderstanding of the notion of loyalty these companies have. It is the sheer mundaneness of such programs, resulting from that misunderstanding, that irritates me. Customer loyalty, in being reduced to the level of card stamping programs, has lost its meaning for so many companies.

But it’s vitally important!

As a business start-up consultant, I believe that building customer loyalty allows us to avail ourselves of one of the most important managerial levers out there. I would even go so far as to say that developing a clientele is the same thing as building customer loyalty. Why?

Start-up entrepreneurs not only have to find new customers, they also need to find customers who will do business with their companies in the future. In other words, they have to develop long-term customers.

But who are these long-term customers, these good people who’ll become loyal followers of your company?

Know thy best customers

Here loyalty takes on its full meaning. You cannot convert customers into loyalists without having a profound understanding of who they are.

The first step in building loyalty is to identify your best customers. Some use the word “best”; others call them perfect or ideal customers. Whichever you prefer, the key thing is that they’re easy to recognize among your clientele:  they’re the ones who generate the largest portion of your revenues.

These customers are precisely the ones you want to turn into loyalists. It’s worth giving them preferential treatment since their needs are in perfect harmony with your company’s offer – and that can be turned into profit.

In general, these perfect customers that we’re talking about are 3 to 4 times more likely to respond positively to an offering from your company. In other words, you have 3 to 4 times more chances of selling to one of these customers than to any other. Also, they are far more profitable for your business. They provide better margins because they are less price sensitive. They recognize the value offered by your business and have no wish to go to the competition to save a few dollars.

As you can see, we’re not interested in building just anyone’s loyalty! We’re specifically grooming customers with a latent potential for loyalty. So we need to put extra effort into those customers who consider that your product offers them a superior response to their needs.

Loyalty is, therefore, a very special treatment for very special customers. And when you understand that, you can easily see the limitations of mass loyalty programs.

How do you build loyalty?

Once you’ve targeted your best customers, just ask yourself why they naturally keep coming back to you. What are you offering them to make them want to buy your products or services again? Is it a bond of trust? Do you offer them a personalized service that’s important to them? Does your product contain some element they particularly like? Or is it simply a question of geographical proximity?

The foundations of an effective loyalty program are built on the feedback of these so-called “perfect” customers. This feedback is a gold mine! From such valuable information, you’ll be able to build your loyalty policy or loyalty program. Stamping a card just isn’t enough. It’s much more about giving customers what they ask for. Start doing this and you’ll be able to maintain, develop and grow the loyalty of your customers.

Beyond stamping the card

It’s important to get away from technical and administrative thinking. You don’t need to have a formal loyalty program with a structured system of rewards or recognition. Sometimes customer loyalty is all about creating connections; that is, forging a human relationship founded on trust. It pays off in the end! There’s no need to force or control things.

Have you ever wondered how psychologists hold on to their clientele? And how consultants build theirs? You’ll probably say these are very specific and atypical examples. Absolutely not, believe me! In terms of loyalty, the primacy of human relationships is a universal reality.

Here’s a small slice of my life. When I was young, I often had lunch with my father at a neighbourhood diner. This restaurant had a clientele of regulars. They were workers who ate there maybe 3 to 5 times a week. The owner knew every customer and called them by name. She knew in advance what they wanted to eat based on the day of the week. More often than not, she brought each customer their meal without even waiting for the order! Now, that’s a long way from stamping a card, isn’t it?

The next steps

There’s nothing technical about customer loyalty. That said, there are several technologies that can be effective, provided they’re part of an overall loyalty objective founded on the customer relationship. This relationship can connect your customer to your brand, your business or even to you personally.

Take a first step in the right direction. Make a list of all your customers. Link revenues to cost for each type of client. Then group your most profitable customers into one category and ask yourself what they really want. In other words, what relationship do they have with you, your business or your brand?

Loyalty is a natural phenomenon that has become distorted by many schools of management thought. Relax. You don’t have to reinvent the wheel to attract your customers to your offer. Just be genuine, human and rigorous. Your loyal customers will make their presence felt and contribute to the profitability of your business.

With that, I wish you success in building customer loyalty!

Written by: Jean-Philippe L’Écuyer, entrepreneur-in-residence, Futurpreneur Canada

Tips & Tools: How to Make Your Team Meetings More Productive

Team meetings, whether them being all staff, department or individual meetings, have a tendency to be unproductive. Most of working Canadians, at some point, have felt this feeling. This has result in staff feeling more stressed and overwhelmed by the time lost attending these meetings. Most people that have worked in an office environment have a perspective on what needs to change. Newer businesses or ones that are up to date with modern work ethics tend to conduct work days in untraditional ways, as opposed to what their parents saw in their work life. This can mean flexible hours, working from home or remote office work. The times are changing and so are employee expectations. If you are an entrepreneur that wants to ensure your business and team does not have unproductive and wasteful meetings, please keep these tips in mind:

1) Sometimes a simple phone call or email will suffice

Meetings takes a lot of effort to schedule, attend and complete, so decide whether or not you really need to have a meeting or not. Just asking yourself, “how long will this take to communicate?” “do I need to tell one person or the whole team?” or even “will a phone call suffice?” and you will quickly understand if it’s necessary.

2) Meeting frequency

One of the more common mistakes that team leaders make is determining how often meetings should be. If you are the founder of your company, especially in the beginning stages, you’re team will probably not be a very large one. If the workspace is small as well, you’ll probably see each other very often anyway. Taking time out of every single day to stop to have a meeting will not make much sense and will leave little room to hit objectives on time. The best way to determine how frequent meetings should be is simply by, one, analysing the current meetings to see if people actually have updates to provide to each other, and two, ask your team members for their feedback. If your team expresses they happen too often, switch it up and try something new for next few meetings.

3) Watching the clock

Some meetings drag on and on. Although certain projects or situations call for longer meetings, keeping them as short as possible will encourage using the time had wisely. Set a meeting agenda that includes specific topics or updates that are related to current projects. This will ensure your team stays on track with everything and prevents leaving out important information. Test out a few different lengths in meeting times and time it. You and your team will get a sense of what timing is best and then you can adjust from there. Also, instead of watching the clock hoping the meeting will end, your team will be watching it to see how much time they have left to speak!

4) Schedule in something fun

When I sayice breaker’, you probably want to cringe but they can be necessary in your meetings. This applies to team meetings especially. When meetings happen regularly for project updates or just for a check in, there has to be something to get your team members excited, otherwise they might dread it every week. To throw some ideas around, you could implement a short ‘improv’ or a short game that will engage your team and get their energy levels up. Some say that having the fun aspect in the beginning of the meeting will help fire everyone up and get them ready for discussion. On the other hand, if the ‘fun’ aspect happens at the end of the meeting, it could leave your team members smiling on the way to their desks.

5) Allow others to lead meetings

As the boss you might feel inclined to lead every meeting but give other a chance to lead. It will help them develop their leadership skills and their confidence in meetings. Also, when team member attend meetings, if they don’t have to speak up, they will probably choose not to. This will give everyone the opportunity to have the floor and express their thoughts. More importantly, value everyone’s voice. Productive meetings are inclusive ones. Inclusivity always gets the ideas flowing and can, in the end, drastically change and improve your business.

With following these few tips, you will start to notice that your team meetings will be less dreadful and inherently more productive as a result. Workplaces and their cultures vary from company to company so there is not really a ‘one way’ to do things. As you take on your own, remember that you do not have to conduct your business in the traditional way that you maybe previously disliked. Approach team meetings with these tips in mind and you and your team will be more productive.

Written by: Sara Pivato, Social Media and Content Intern, Futurpreneur Canada

Leader Spotlight on Pauline James of Anchor HR

Pauline James never envisioned herself as an entrepreneur. She worked her way up and across through various roles through her career and before launching Anchor HR she was leading employee and labour relations for a large national company. With her constant need to continually learn and be challenged by her work, she couldn’t picture herself continuing to do the same role for the rest of her career.

What excited her about starting her own business was bringing great people practices to smaller and mid-sized companies and helping them build their companies. She knew she wanted to continue to provide full human resource services which would mean having a team, toolkits and materials ready for when she launched. This involved a lot of planning and saving before she finally took the leap to create Anchor HR, a human resources company.

Pauline was an expert at Futurpreneur Canada’s Expert Exchange recently hosted in Toronto and we wanted to catch up with her to chat about hiring the best talent for your business. Here’s what she had to say…

Hiring can be one of the toughest challenges for an entrepreneur. How do you suggest entrepreneurs find the perfect fit for their business?

Before you begin interviewing, be clear on the challenges you will need your new talented team member to solve. This is not only the urgent need you want their help with, but also what you will need from them in the mid and longer term. How will this role evolve, with their input and ingenuity, to provide ongoing value?

Determine how you will objectively assess their skills, knowledge, and fit for your organization. The more you prepare, the better you will be at overcoming any ‘likeability’ or ‘you are just like me’ bias that affects all of us.

Do you have the expertise to assess their depth of knowledge? If so, assess their expertise by showing a genuine interest and having a detailed discussion about their day to day work in previous roles. Is there a process or skills test that can assess their skills? Be honest with yourself about whether you are able to effectively assess their knowledge and skill set. If not, it is well worth investing in having external support in this regard.

You will also want someone who is excited and not deterred by the challenges faced in your mighty and growing company. This means having a candid discussion about the challenges this person will face. Being part of a small and growing team, without much structure, is not for everyone. Someone who is internally motivated and excited by their part in the bigger puzzle and keep pushing forward to find solutions when the going gets tough.

Ensure every conversation is a dialogue. The candidate’s decision to join your team is just as important as yours; it is important it is well informed. Include strong team members in the selection process, when possible, to assist you in making the best choice. This will also allow the candidate to also ask questions to a potential peer about your work environment.

How do you know when it’s the right time to hire? Or should I outsource work/hire freelancers? What’s best?

The decision to hire an employee is significant and comes with increased obligations from a legal and financial perspective.

If your cash flow permits, and there is steady work that is core to your organization’s deliverables, you may well want to bring this in-house.

Build the business case for hiring, as thoughtfully as you would for any other major investment. Carefully consider if the work is truly long term. Is it really an ongoing role, or could it be project work? Could the work be reduced or resolved with improvements in processes?

If the work is tangential and/or intermittent? Do you have the expertise to oversee this work effectively? If the work is not core to your business or irregular, you may pay a premium for access to these services, but this is still often less expensive and risky in the midterm than hiring.

How do you know when it’s the right time to let someone go?

This is understandably a difficult decision and threshold to assess.

We want to ensure we have given someone every opportunity to succeed. Our teams expect this too, otherwise any sense of trust and security of working with us is eroded.

The critical assessment is whether the person can and will improve. To satisfy this, it is important you have trained the person properly and explained what success looks like in the role. Too often we focus on what the person is doing wrong, rather than on what we need them to do. We sometimes, erroneously, fall into ‘that’s just the way they are’ and do not provide enough coaching. Research has shown that people can learn and improve over their lifetime, when they are committed to learning and have support.

I have heard from a number of owners that they waited far too long to make this decision on the first person they terminated. They also learned, to their surprise, that when a poor performer or toxic individual was let go, after being given a fair chance, the morale on their team actually improved.

If you want to terminate ‘for cause’, without owing termination or severance pay, there is high threshold of evidence required to establish multiple warnings and opportunities to improve have been provided. This is a particularly difficult bar to meet when the issue is performance. Most employment litigation is tied to termination and you are often best to seek guidance before proceeding. One of the most important ways to reduce risk is by having an employment contract that stipulates what would be owed to an employee, should their employment be terminated.

What is one piece of advice you have for entrepreneurs when it comes to hiring for a small business?

If we want to grow our business, find the gaps, plug the holes and find new and better ways of delivering products or service, we need to hire people who are different from us. Research is continuing to show that diverse teams outperform more homogenous ones. The smaller the team, I would suggest, the more important this principle is.

I am going to sneak in one other tidbit: it is also equally important that efforts are made to ensure our talented employees get how important they are and feel they are invested in as individuals. The costs of losing someone great is just as impactful, if not more so, as a bad hire.

I hear many owners lament the difficulty of bringing on new talent, but do not also focus on retaining the talent they have. When the cost of replacing someone is estimated to be 1.5x their salary, let alone the disruption, the business case writes itself.

Grab a coffee and write your team some personal thank-you notes today! Put a note in your calendar to take 15 minutes each week to go out of your way to thank one employee for something they likely did not even realize you noticed.

You can learn more about Pauline and Anchor HR by clicking here.

Written by: Lauren Marinigh, Social Media & Content Specialist, Futurpreneur Canada

Partnerships: To Clash or Complement

Written By: Barry Hartman, Co-Founder and CEO at 505-Junk, barry@505junk.com

One of the earliest decisions that entrepreneurs must make is to partner or not to partner. If you decide to start a business with a partner(s), the first decision you will make is whether to establish a partnership or incorporate the business. Incorporating the business will be a larger investment initially, however your partner and yourself will be protected legally and give you the benefit of a lower tax bracket on the profits of the business. Should you decide to incorporate, you should consult with both an accountant and a lawyer that will help you incorporate the company and create a shareholder agreement.

If you are considering to partner with one or more individuals, it is important to discuss the following prior to launching the business:

1) Are the shares allocated evenly or is there going to be a majority shareholder?

A majority shareholder will generally have the final vote in major decision making, giving them a ‘controlling share’. If you have a partner/shareholder that will not be as ‘hands on’ in the business but will be providing funding, it is important to do a valuation of the business that is fair for both parties. If a partner’s sole responsibility is providing capital and being involved in strategic planning, they will expect a dividend draw but may not be entitled to being paid a salary. If a partner/shareholder will be hands on, you will need to determine a salary for that person. If a salary is not feasible due to early stage cash flow, sweat equity is the most common option. The salary should be recorded but the cash should not be drawn until the profits of the company generate enough cash.

2) What are the responsibilities of each partner?

More on this can be found in the book, The E-Myth by Michael Gerber. For a quick breakdown, you will need to allocate responsibilities between partners and employees for sales, marketing, operations, finances (accounting and bookkeeping), and human resources. You want to find an even balance in skillsets and responsibilities to complement each other, rather than clash. Having two partners that are visionaries may create conflict with the vision of the company as well as have a lacking skillset to “get it done” in the daily operations. On the contrary, having two partners that are focused on “getting it done” will lose site of the direction of the company and have no strategic path.

3) Are your personalities going to clash or complement?

The reason why our partnership at 505-Junk works so well is because Scott and I have very different personalities. Scott’s personality profile is a “Team Player/People Pleaser/Nurturer” where my profile is a “Charismatic Leader/Enforcer”. This allows me to focus on vision, leadership, and inspiration while Scott is focused on execution and building the team. We would not have been able to grow 505-Junk by 267% in 18 months without one or the other.

Note: There are many types of personality tests that you can do online. My personal favourite is 16 Personalities. It takes about 12 minutes.

Prior to making your decision, do your due diligence on each other and assess whether you will clash or complement each other. People say that “friends don’t make good business partners”. What they’re trying to say is that friends tend to attract similar personality types, hence why they became friends. Be aware of that when looking at the proximity of your network. Scott and I grew up in a very small town of 20,000 people and graduated one year apart from the same high school, but never knew each other due to our variance in personalities. We met in college and the rest is history. Everyone is bound to clash at some point, but when your values are aligned and you are both on a mission to reach the same vision, a partnership can fuel that growth exponentially.