Setting your business on the right path to success!

As the clock hit midnight on January 1, 2016, many people around the world celebrated the start of a new year, followed by a host of inspired thoughts about the many different ways to make this year great for life, family and even business.

With this energy and enthusiasm for your goals and dreams, ensure as a business owner you have set your priorities for the year.  Your fresh mindset, perspective and willingness to start the year off right will get you going in the right direction so you can maintain momentum and finish the year strong.

Consider using this advice to help set your small business priorities.

Gather your thoughts

ss_educationicons_vector_177128498-croppedWhether you are starting a business or are in the first year of your entrepreneurial journey, take a moment to self-reflect so that you fully appreciate your current position. Where are you today? It is important to take the time to write down what you hope to accomplish, without necessarily worrying what is reasonable, attainable or realistic. The point of this exercise is to collect all your thoughts without critique and write them down.

A few focused questions can help guide you while you start thinking:

  • What type of product or services would you like to expand on?
  • What are your skills or talents that are transferable to a business context?
  • What are your financial or marketing expectations?
  • Are you in a position to hire employees?
  • Would you like to expand to other cities/provinces?
  • What information or research do you need to complete in order to make your plan happen?
  • Most importantly, what are your expectations? (revenue, marketing, operations, etc.)

At the start of the entrepreneurial journey, some people will list website creation, logo design and stationary/marketing goodies as crucial first steps in running a business (rightfully so – there is a time for this). First and foremost, however, be sure to analyze the value you plan to provide your customers by setting up a value proposition. If you provide a service/product that offers value to your customers, it can create a sustainable business.

Create a value proposition statement

MP900442371-sign-with-wordsWhile the last section helped you set your mind in motion for brainstorming, creating a Value Proposition involves setting a specific promise about your service or product that represents a valuable offer to your customers, one that will show the difference between you and your competitors.

You can find out more about creating a value proposition for your small business in this blog: What is a Value Proposition Statement and How Do I Create One?

Compare and contemplate

Compare the lists you have created

  • Do any of your thoughts from your self-reflection exercise match your research and findings from your value proposition exercise?
  • Can you commit to the value you are promising to your customers?
  • What do you need today to make a reality out of your promise to your customers? (partners, supplies, etc.)
  • Do you have a plan to meet your demand, should you get an influx of calls, orders, and requests?

Note

The journey of a small business owner is very satisfying and exciting, and at the same time very demanding of your time and efforts. As markets change rapidly, nothing guarantees your success more than your discipline, your flexibility and your curiosity to continue to learn from others and market trends. Ultimately, your passion must never dim, for that is the heartbeat of your business. If you can’t keep it alive, who will?

In my next blog post, I’ll share tools and techniques you can use to identify your business priorities in detail. For now, focus on creating your value proposition statement. Find out more about Value Proposition Statements, including a How To and some sample statements.

Author:
Cesar Gomez, CFIB Business Counsellor
@josuegomezg
LinkedIn.com/in/josuegomez

 


What is a value proposition statement and how do I create one?

MP900442371-sign-with-wordsCreating a value proposition involves setting a specific promise in a service or product that is valuable to your customers, demonstrating the difference between you and your competitors.

Think of the following factors to help steer you in the right direction towards finding a unique value:

  • If I was a customer, what would I appreciate most when purchasing this service or product?
    • Delivery: quick-service delivery, free shipping
    • Customization: style, color, size
    • Customer service: quick set up, free consultation or support, technology support
    • Accessibility: information available on website, profile, language, live agent, response to questions within 24 hours
  • Consider the following: when I review my competitors, they are great at:
    ____________________ (fill in blank) but they are really lacking in the area of
    _____________________(fill in Blank) (and then create a more comprehensive list)
  • If I was a customer at my competitor, this is the feedback I would give them: (list of feedback)
  • You may wish to read through a competitor’s website, product, and company reviews. As you read a variety of compliments about the business, you will find a few gems (customers or potential customers) that express their needs, concerns, and/or questions. You may wish to consider reading through replies to Tweets, Facebook comments, and perhaps even YouTube.

You will soon realize that walking through the above-listed process may take a few hours, or even days, which is perfectly fine. Once you have a completed list, select a weakness in the market from which your business can create strength. The idea is to identify the “gap” in the market which your competitors have not identified or filled.

Creating your value proposition statement

When creating a statement, ensure you are clearly communicating a specific advantage to your customers that exceeds the expectation of your competitors’ customers.

Your value proposition is a tightly-worded sentence that is not a business slogan, but rather a quote that gives the customer a snap shot of the great things they can expect from your business.  You may wish to start promoting your value proposition through your marketing channels, such as a company website, flyer and/or business card.

If for any reason you are not confident you can deliver on your promise, hold off and continue your market research. Failing at providing a service or product based on your value statement can harm your business reputation and crimp future sales.

A few examples of value propositions (for different sectors)

Restaurant: “Fresh and Affordable Meals Around the Clock”

Product Delivery: “Shop Now and Receive Your Purchase Within 24 Hours”

Private School: “Education that Elevates You to Make Courageous Career Moves”

Printing: “Quality Printing Within 30 Minutes”


Six red tape rules that make no sense

redtape2015_EN_l244Even if you’ve just started your business, you probably already know about red tape. And I’m not talking about the regulations that protect consumers, the environment etc. I’m talking about actual RED TAPE. Yeah, that’s what we call all those silly rules, confusing forms, unhelpful call centre agents. Basically all the things that governments and regulatory agencies do that don’t help protect anyone, and just make your life as a business owner harder than it has to be.

Even before you start up, you might have to navigate government processes like incorporation, applying for professional licensing, building and other permits. All these can be time-consuming, often confusing, and could certainly stand to be made easier and more straightforward. The problem is, they are only the beginning. Even veteran business owners deal with red tape, and it doesn’t necessarily get easier as you go along.

CFIB hears about many of these government hassles through our Business Resources call centre. Our member businesses call for help with everything from hiring employees, to renovating, to filing their taxes. Every one of these business processes has associated government and/or regulatory processes, some of which are straightforward, many of which are anything but. Our experienced Business Counsellors can usually help, but red tape always makes it harder to run your business.

To get in you in the spirit of Red Tape Awareness Week™, we thought we’d share six crazy government rules and processes that make no sense and hurt small businesses like yours:

  1. If you employ members of your family, they usually aren’t eligible for Employment Insurance (EI) if you lay them off, but you still have to pay premiums for them.
  2. In BC, if you hire a Temporary Foreign Worker as a trucker, they need to have a work permit to get a drivers’ license, but they need a drivers’ license to get a work permit.
  3. Small manufacturers and importers in Ontario have to fill out a long and confusing recycling form, just to tell the government that they are exempt from completing that very same form.
  4. In Halifax, inspectors responsible for enforcing rules about restaurant patios have forced restaurant owners to re-install their patio railings after they’ve been approved by the city.
  5. A federal port authority in Vancouver changed its rules so that small trucking companies can no longer access the port, losing any business they had there.
  6. Construction firms and employment agencies in Quebec need to prove to clients that they pay their taxes. Clients, whether they care or not, have to confirm with the government.

Check out our Paperweight award finalists for more examples of red tape for Canada’s small businesses.

Every week in every jurisdiction across the country, CFIB representatives are meeting with city councilors, MLAs, MPs, mayors, ministers and premiers about issues that matter to our members. Often those discussions include red tape. Among small business owners in Canada, it is consistently identified as the second biggest obstacle to business success, so we work with government decision-makers to try to make life easier for you.

And just to make sure the politicians can’t ignore us, we hold Red Tape Awareness Week every year in January. We highlight some of the worst examples of red tape, we grade the federal government and each of the provinces based on how much red tape they create for small business, we recognize politicians who are working to make the problem better, and we shame politicians that are making it worse.

Check out cfib.ca/redtape to learn more, or call our Business Resource line at 1‑888‑234‑2232 if government is driving you crazy with red tape.


Getting to the bottom line: A start-up budget primer

ss_budget_148327298_jpgWhen it comes to budgeting, the bottom line is exactly what it sounds like. The term itself is derived from the final figure in the last column and row of an accounting spreadsheet. Are you in the red or are you in the black? In business, that’s a pretty important metric.

So what should you be thinking of when you are budgeting for your start-up? A few considerations:

Go short, go long
Most effective budgets have a short-range, monthly component, and a longer-range, quarter-by-quarter focus that keeps your organizational goals in mind.

The best of both budgetary worlds
Don’t discount the value of the balance sheet vs. the income statement. Many start-ups focus only on the income statement, yet budgeting via a balance sheet allows you to hone in on cash flow needs for your entire business (and not strictly related to income and expenses).

Components common to any budget
Sales and Revenues vs. Costs (variable, fixed, semi-variable) and Expenses. Fill in the blanks! A good rule to remember is that expenses are often easier to forecast than revenues, since the latter are more of a wild card and expenses are generally within your control. Quite simply, if you don’t spend more than what you budgeted on expenses/costs, you’ll be close to what your budget calls for.

Inject a healthy dose of realism into your assumptions
A budget in many ways is about projecting and forecasting, using history (and your own research and intelligence-gathering) as a rough guide. Always be conservative in your estimates and assumptions. If your start-up took in $100,000 in sales last year, and you’re projecting sales of $1 million for the year ahead, you’d better have pretty compelling evidence informed by objective metrics to support your assumption. In other words, consider over-estimating your expenses and use common sense on revenue projections.

Be a trend-watcher
Know your sales cycles inside-out so you’ll be well-placed to ramp up or down as sales dictate.

Time is also a budget item
Many start-ups overlook or under-appreciate that there is a cost for people’s time, especially when it comes to managing clients. Incorporate a metric into your budget that accounts for time overruns and the implications for your business.

A budget as a living document
Re-visit your budget as often as you can. Ebbs and flows will become apparent and constantly reviewing your budget will give you valuable insight over time so you will become more accurate and proficient at budgeting.

There is no one-size fits all approach to budgeting. Perhaps a more nuanced and even counter-intuitive approach is more appropriate to your unique start-up situation.

Jeff Magnusson, CEO of Playerize, a Vancouver and San Francisco-based company that manages a growth and monetization platform for game developers and advertisers, writes a blog on start-up management. He suggests re-thinking traditional budgeting so that it’s “agile” and thus capable of adjusting using real-time input. As his post cheekily suggests, “budgets are a waste of time.”

When in doubt, you can always use the three laws of start-ups as your guiding focus for budgeting:

  1. Everything takes longer to do than you think it will
  2. Everything costs more than you think it will
  3. No entrepreneur can think of everything

In the final analysis, there is always one essential business truism that will give you timeless wisdom for your budgeting: You can’t manage what you can’t measure.

Check out this free budget template specifically geared at start-ups, which is available for download through Intuit Quickbooks to get you started. It’s already pre-populated with line entries and descriptions, which can orient your budgeting process in terms of what elements to consider. Or visit their small business-oriented web portal to see some additional budgeting software.

Microsoft Money is another option for small business budgeting, although the software is no longer produced commercially (a free download is still available from Microsoft). Sage Accounting has start-up specific offerings, as well.

For a host of other free Excel-based budgeting templates and dashboards, check out what Skilledup has compiled. Something for everyone’s budget (in that they are all free).


Creating and Maintaining Your SWOT Analysis

SWOT shutterstockHow to create a SWOT analysis is one of the first things you learn in business school, and for good reason. Creating a well-thought-out SWOT analysis is important to run a successful and innovative business. Unfortunately, many entrepreneurs are guilty of creating a SWOT analysis to appease a professor, mentor or lender/financer, and then shoving it into a file, never to see the light of day again once it has served its initial purpose.

Much like a mission statement, a SWOT analysis should be considered a useful tool throughout the lifespan of your business. It is something that should be reviewed and modified both routinely and whenever there’s a significant change in your business or industry. Doing so will bring clarity and perspective to your unique challenges and opportunities. BUT before you can review, you must first create. If you have not yet done a SWOT, here is some information to get you started.

SWOT Strengths, Weaknesses, Opportunities, Threats

When thinking about your SWOT, it’s important to remember that Strengths and Weaknesses are usually factors that are internal to your organization. Opportunities and Threats are external forces that can affect your organization. Here are examples of all four categories:

Strengths – Organizational and competitive advantages

  • Low barrier for entry
  • Low overhead – inventory on demand products
  • High level of repeat clientele already established
  • New software contains sophisticated algorithms to provide more targeted up-sells at checkout
  • Awesome Yelp reviews

Weaknesses – Organizational and competitive disadvantages

  • Low marketing budget
  • Difficulty obtaining necessary paperwork to export outside of Canada
  • Lack of process for managing and measuring performance of off-site sales force
  • Staff keeps eating the product under guise of “taste testing”

Opportunities – External/environmental factors that you can take advantage of

  • Broaden customer base and brand awareness with social media sharing incentives (discounts, contests)
  • Create and offer add-ons and complementary products for best-selling products
  • Design limited edition products for holiday season
  • Jump on the Star Wars bandwagon

Threats – External/environmental factors that may prove detrimental to your organizational goals and success

  • Our best-selling item is reliant on a single supplier. Can they meet demand in the coming year?
  • Canadian dollar is rapidly declining. How will this affect profit margins and growth opportunities? Will customers turn to American competitors?
  • My mom wants to move her car back into the garage this winter. May have to move head office.

For the purposes of simplification, I intentionally did not give examples in any one category that tied into another category. Many people consider Strengths and Opportunities to be paired together and Weaknesses and Threats to be paired together. For example:

Strength – Fully revamped website, which is more technologically advanced, features enhanced security measures and is rated as more navigable than the websites of our competitors. Opportunity – Train additional staff on new website CMS platform and online customer service/resolution dispute procedures to provide round-the-clock service.

This type of thinking is logical. You’ve identified your strength and the opportunities that derive from your strength. While this is smart, I also like to put a particular emphasis on matching Strengths to Threats and Weaknesses to Opportunities. Using the above example, here would be a Threat to consider:

Threat – Sales heavily reliant on technology/website. Additional funds should be set aside for upgrades within the next five years.

As another example, we have low barrier for entry listed under the Strengths category in the SWOT description above. A threat to be considered in this case would obviously be new competitors entering the market quickly and without warning. We also have Low marketing budget listed under Weaknesses. This weakness may lead to opportunities to experiment with low-cost social media campaigns.

Now that I’ve offered some tips and info to get you started on your SWOT analysis, it’s time to get brainstorming. Put down your latte and open up a new document or draw a grid with four quadrants on a napkin. Draw an S, W, O and then T, one in each quadrant, and start your list. Then re-visit the list on a monthly or quarterly basis, or as needed. Have fun!


Your Free Pass to Toronto Franchise Expo

The Toronto Franchise Expo is this weekend (January 9th and 10th). If you’re in the area, please print this complimentary pass to attend the Expo where you will hear CFIB president Dan Kelly give some excellent entrepreneurial advice. We will have knowledgeable CFIB counsellors at our booth to answer you small biz questions! Come armed with your question on virtually any small biz issue, from red tape to HR to EI and beyond.

Toronto Franchise Jan 16

 


Hiring family? Join us for this free webinar.

shutterstock_216859354croppedIf you have or plan to hire family, you need to take this free webinar. Each year, employers and employees across Canada pay thousands of dollars in Employment Insurance (EI) premiums. What many business owners and their employees don’t realize is that if you employ a family member, they may not be eligible to collect EI benefits. There are companies that may help you get your money back, for a fee. CFIB can help you get it back for free.

During Red Tape Awareness Week™ (January 18-22), we are holding free webinars to help you with:

  • Step-by-step instructions to apply for a ruling with the government to determine whether or not your employee should be paying into EI; and
  • Instructions on how to get a refund of any overpayment within the last three years.

Don’t wait to find out if your employees – particularly family members – are eligible for EI benefits, there is nothing worse than an employee being turned down for benefits that they have been paying into for years.

Register for CFIB’s free webinar today. Space is limited.

Stop Paying Unnecessary EI Premiums for Family (and Get Your Money Back)
January 19th, 1pm EST

Assurance-emploi : payez-vous inutilement des cotisations pour un membre de votre famille?
January 20th, 1pm EST

Stop Paying Unnecessary EI Premiums for Family (and Get Your Money Back)
January 21st, 1pm EST

 


Pitch Perfect: My Advice on Securing Investment Cash

By Arlene Dickinson

shutterstock_144414862_croppedHaving spent nine seasons on Dragons’ Den taking in thousands of investment pitches, I am often asked about the attributes of a winning pitch.

Assuming you’ve got the right foundation – a smart business idea and the drive to succeed, regardless of obstacles – here are a few tips on how to find and successfully pitch investors.

Pitch the problem
Many of the most successful businesses started out providing an innovative solution to a common problem. Early in your pitch, state what the problem is, which audience is affected by it, and how your product or service effectively addresses the problem.

Know your audience
Researching your audience gives you the best chance of relating to them both personally and professionally. Talk to people who know them. Google them. Did they graduate from the same high school or university as you? What events have they spoken at – i.e., a Ted Talk – and what did they talk about? What is their business or investment philosophy?

Anything that enables you to connect with them in a deeper way will increase their engagement when you are making your pitch.

Anticipate the tough questions
Together with your team or a trusted advisor, go through your pitch to identify any potential weak spots in your story. As an investor, I am always interested to see how people answer the tough questions. Do your best to anticipate them in advance and have thoughtful, succinct answers ready. If you are pitching a venture capital firm, you may even consider meeting with someone like a bank loan officer first to see what kinds of questions they throw at you.

Show passion and personality
The old saying holds true: you are investing just as much in the person as the product or service. Sell yourself with confidence and humility rather than cockiness. Also, start-up entrepreneurs wear a lot of different hats and are often the lead sales person in a small business. I often ask myself: “Would I buy something from this person?” Be passionate, positive and personable, as these are key attributes of successful entrepreneurs.

Where to find money
As a new entrepreneur, there may be limited options for funding because you likely do not have an extensive network of business connections to lead you to potential investors.

There are a number of investment options to consider, including banks, venture capital firms, and angel investor associations, all of which are located throughout Canada. Depending on your investment needs, keep in mind there’s a range of government grant and loan programs to get your business off the ground.

Whenever taking on investment dollars, remember to consider what non-cash tangibles the investor can offer. Do they have extensive financial management experience or sales connections that you can leverage to grow your sales and profitability more quickly?

And remember….
Starting your own business is an exciting and challenging journey. Securing financing is the first of many steps, all of which require you to be resilient and resourceful. However, when you are pitching, try to relax, be yourself, and let your passion shine through.