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bootstrapped Positioning Yourself to

ATTRACT WHOLESALE ACCOUNTS LINKEDIN FOR ENTREPRENEURS how to price your product

FINANCING Your dream idea with Venture Capitalist

Stuart Browne more on Page 18


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EDITORIAL K A R E N M. LOWE Executive Editor F R A N C IN E GREY Creative Editor K I M BLEY LOWE-B EN N ETT Editor N I C O LE LOWE Editor

08 positioning yourself to

ATTRAC C T W H O L E SA L E AC C O U NTS by JENNI F ER F O S H AY

16 L in ked I n for E n tr ep r en eu r s : IT I S O NL I NE B USI NESS B RA ND ING PART 2 by SH EL LY ELSLIGER

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TABLE OF CONTENTS

RESO URC ES

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TIPS TO BALANCE SCHOOL AND BUSINESS By Yandy Zuo

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B U Y-SEL L AG REEME N T D E TA I L E D

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By Seun Adeyemi

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BOOTSTRAP P ED by

H OW TO P RI C E YOU R P RO D U CT

TIM KANE

By Michelle Alexandra

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T H E SIDE HUSTLE YO U N EED TO C O N SIDER By DAVELLE MORRISON

36 B U IL D ING A C O M M UNI TY by Zandra Thomson

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editor’s note Many of us start our business venture not knowing or understanding the full financial responsibility of what we are doing. Many entrepreneurs I work with started because they had a passion, allowing the money issues to fall where they will. In some cases, there was “hope” the venture would be profitable, so it was taken on. The problem is, most do not have a financial plan or template. I often encourage people not to let money prevent them from doing what they want to do, and I believe that with all my heart. What I also encourage is to have a plan in place. Acuity is from acumen, which speaks to your ability to react quickly in making the right decisions and judgements. The ability to make sound judgements quickly, in all areas of business is important but especially so for the financial aspect of the company. Yet, most entrepreneurs do not know how to price their product to make a profit, what to spend or not spend on, how much to spend, how to prioritize, and so on. In order to have a solid foundation of the financial aspect of your venture, you need a solid plan that takes into consideration issues that can arise and how to resolve or work around them, risk mitigation. Mistakes in your business cost money, but a plan can either eliminate or reduce the costs incurred as a result. The beauty of our current business environment is how easy it is to access information, to learn whatever is required to succeed. Dreamer 2 Creator Business Magazine exists to help even further by simplifying the data. Uncertainty, in itself, is not altogether a bad thing. It took me a while to figure out the name for this month’s issue. I knew it would be on money but could not figure out how to frame it. I am still not sure Financial Acuity is the correct theme, but it says a lot. In fact, while writing this, I realize that you can replace the word “finance” with anything else in business and life. For example, lost an intern in a busy season of my life with school assignments, magazine launch, calls for help from the consulting side of me and now additional tasks I did not expect to do forced me to adapt. I had to readjust my time to avoid burn out and still do a great job. My business acumen includes the ability to pivot and manage different projects by knowing how to prioritize tasks, say no to non-priority activities but above all, manage personal and business finances. Here is to Dreams Created!

KAR E N M . L O W E Executive Editor

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3 FINANCIAL ACUITY DREAMER2CREATORMAG.CA ISSUU.COM/DREAMER2CREATORMAG mail@dreamer2creatormag.ca

Copyright 2019 Dreamer 2 Creator Business Magazine. ISSN 2562-5330 (Print) ISSN 2562-5349 (Online) All rights reserved. No parts of this publication may be copied, reprinted, displayed, edited or distributed without the written consent of Epigram Consulting Services Inc. Dreamer 2 Creator Business Magazine is a Canadian Magazine, published and distributed by Epigram Consulting Services, located in Brampton, Ontario, Canada.


BOOTSTRAPPED My name is Tim Kane, founder and CEO of myHSA, an online system that streamlines Health Spending Accounts. A Health Spending Account (HSA) allows an employer to allocate a pre-set amount of money for each employee to be used for medical reimbursement.

I sold my insurance company in 2013 and moved into an industry I knew nothing about, the software industry. By moving from a brick and mortar industry to a virtual world of technology, I learnt that businesses might seem different in some aspects, but they are the same in many areas. The plan was to build an app, get a few clients, and like others, it would go viral and make millions of dollars overnight. Then reality hit that these overnight-success companies were not as overnight as they seem. I have come to realize that founders’ tears and failures underpinned these miracle ideas and businesses. Building a business, any business, is hard; especially when you are trying to do it with your own money - Bootstrapping. Bootstrapping is the premise of having no exterior financing, no venture capital or private equity. myHSA was bootstrapped from the ground up through principles like cash flow, word-ofmouth marketing, the spamming of social media and

my personal savings. The cash flow concept meant we could spend money when we had money, usually through sales and personal savings. When we had no capital to advertise, fly somewhere, or attend a conference, we did none of those things. We only spent the money we had and carried no loans. We got our initial sales by spamming social media. We literally contacted insurance advisors on LinkedIn and demonstrated the company. At this point, there was no definitive idea about the best way we should be presenting, nor whether people wanted the product we had on offer. Our first dollar of marketing was later spent in 2018. It was a true grind to bring the myHSA story to life. For a bootstrapped company, it is a constant battle to keep up with funded competitors, while ensuring everything is operating

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smoothly and staying relevant. We built our company for insurance advisors and not to disrupt them. This was tough as insurance advisors were not looking for something new; they were quite comfortable selling insurance. In early 2016 a highly funded and strategic company came out with a model like myHSA. The core difference was that they tried to sell direct to clients and cut out the insurance advisor with a digital platform for spending accounts. This competitor gave us strength as we became the advisors’ defence against this tech giant. Also, because of their financial backing and spending, this competitor essentially educated advisors and end-users about our product.

Since the inception of our company, our focus has never shifted, and our love for the business we created is a daily practice. We built myHSA as a digital and white-label solution to thousands of insurance advisors across Canada one advisor at a time. We have successfully “disrupted� an industry (insurance) using an old idea (a spending account) and made an old and delinquent part of an employee benefits program cool again. Bootstrapping may not be for everyone, be aware of the advantages and disadvantages of bootstrapping versus being financed because they both require a lot of work.

Lesson Learnt: Know your competitors and how you can leverage their weaknesses and negate their strengths, regardless of their size.

By: Tim Kane Website: www.getmyhsa.com

Building a company this way, I have learned a lot, but I often wonder whether we took the right direction. There has always been an allure to get funded and drive this rocket faster. We recently sat down with the founder of a funded company, and we asked about profitability. They explained that they were nowhere near profitable and their backers will be disappointed when the topic is discussed.

Lesson Learnt: excess money/funding does not equate to profits. Make a plan that equates to profitability.

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Positioning Yourself to

Attract Wholesale Accounts Hello! I’m Jennifer Foshay, the owner and soy candle maker at Allen Wick Candles. We hand pour colourful and unique soy candles in Keene, Ontario. We opened our retail location in February 2018 and in March 2019, we expanded to include a candle making studio. We also sell our candles to other retailers throughout Canada. We have three main sales channels: retail, online and wholesale.

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Wholesale is very exciting because your products can be in stores across Canada, making your products visible to a larger audience. Each new wholesale account requires a Happy Dance! Currently, our candles are in 12 stores. The last ten stores were acquired in the past four months. The following is what I have learned and implemented in my business to grow my wholesale accounts. 1. Products We started out using only standard mason jars to create our candles, but they are limited in that they are typically more of a country-style candle. At the end of 2018, I put my thinking cap on and came up with a new candle jar and labelling. Now, they appeal to a larger audience, and we are getting excellent feedback from our retailers. It’s important to have a product that retailers want to sell, and that does sell. It’s one thing to get your products in a store, but it’s another to have them sell and get repeat wholesale orders.

tag customers as wholesale when they log in so that they will see the wholesale prices. In the back end of the app, you can create customized discounts for product collections. We provide both options for retailers as some like to order directly and others like to purchase online. There are many Wholesale Apps that you can use in your Shopify store. 4. Samples Don’t be afraid to send a sample. We have sent out many candle samples to potential wholesale customers. We want them to see our products in person, and we are confident that if they see the candles and get to smell them, they will be more willing to buy. We have had great success with this method. For example, the cost of sending one of our candles is $20.00 (product and

2. Wholesale Line Sheet Until recently, I did not know the importance of having a wholesale line sheet. It’s a game-changer. You now have a document with your company information, product listings, terms and conditions and an order form. So that when a potential wholesale client reaches out, you have a professional document ready to send. I have created two wholesale line sheets: one for my Spring/ Summer Collection and another for my Fall/ Christmas Collection. 3. Online Shopping for Retailers We have an online store through Shopify. We installed a wholesale app that we can DRE A M E R 2 C RE A T O R B USI N ESS M A G A Z I N E

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shipping). The wholesale client has the potential to purchase over $1000.00 worth of candles over the course of the year. Our next adventure in acquiring wholesale clients is a Buyers’ Trade Show. Allen Wick Candles has been accepted to attend a show in Toronto in January 2020. I believe this will be a great opportunity to showcase our soy candles to an audience of retail buyers. By putting the above in place, we are now ready and confident to attend this tradeshow, and we hope that these recommendations also aid you in your business’ adventure of acquiring wholesale accounts.

Allen Wick Candles 3246 County Road 2 Keene, On K0L 2G0 P. 705.295.9425 E. info@allenwickcandles.com W. allenwickcandles.com DRE A M E R 2 CR E A T O R B USI N ESS M A G A Z I N E

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Tips to Balance School & Business

Hi! My name is Yandy Zuo, and I am the 19-year-old owner of Thoughtfully Handmade. Thoughtfully Handmade is all about helping you out of an awkward gift-giving situation by providing handmade cards, bookmarks and gift tags for any occasion. I also run a blog on my website called Thoughtfully Blogged. There, I share my tips and tricks for card-making; running a business and calligraphy; awkward gift-giving situations through short stories; and gift guides. Beyond that, I am a full-time university student at the University of Toronto. I am double majoring in criminology and philosophy, and my goal is to go to law school in the hopes of becoming a lawyer. I know many young entrepreneurs want to start a business, but the daunting notion of doing so while going to school scares the crap out of them. I was one of them. Running a business and going to university full-time is no joke. There were days when I was so close DRE A M E R 2 CR E A T O R B USI N ESS M A G A Z I N E

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to calling it quits, but the thought of doing so made me even more determined. Thankfully, those days don’t happen often. Balancing university and business took a long time for me to figure out, and I’m still trying to do that. Nonetheless, I’ve been able to maintain a 4.0 GPA while running Thoughtfully Handmade. I’ve learned three valuable lessons while on this journey which I’m going to share with you in the hopes that you don’t make the same mistakes as me.

new cards. In my bullet journal, I schedule in that task to be done on Tuesday. This way, I make sure a vital job is done. The same follows for when you are studying for an exam. I plan and schedule the topics that I need to review before the exam and follow it. Doing this allows you to break down larger tasks into more manageable chunks. On a typical school day, I’ll do the studying and then a business task that I’ve scheduled. Now you won’t miss an important deadline!

1. Plan and schedule Whether it be a bullet journal, a planner or Google calendar, you need something that allows you to write down important dates, deadlines and appointments that come up. Beyond that, you need to plan which tasks you’re going to do and when. Write down all of your tasks, prioritize them and plan it out accordingly in your planner.

2. Take care of your health If your mental health is not up to par, your physical health won’t be either. If you’re not healthy, your grades and business will suffer. Trust me, running on fumes is not the way to go. Set a strict bedtime and have at least one personal day every month. Make time to get eight hours of sleep every day and hang out with friends.

Once you’ve planned out and prioritized your tasks, schedule them in. For example, I have a market coming up on Saturday. To ensure that I have enough products, I need to make some

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3. Have a dedicated workspace Prioritization is key to finding a balance between personal, school and work life. It’s like a seesaw - one day, your business will be your main focus, and another will be school. It depends on what you’ve scheduled and what’s coming up. To aid this process, you need to identify workspaces dedicated to each area of your life. Keeping the area where you conduct your business/work life separate from the space you carry out your schoolwork creates some level of order and reduces the risks of your whole life rolling into one. Clear distinctions help to maintain your wellbeing; enables you to be more productive; and goes a long way towards sustaining your health. Congratulations on the start or continuation of your journey and I wish you luck in whatever stage of your own business you are at!

“BEYOND THAT, I AM A FULL-TIME UNIVERSITY STUDENT AT THE UNIVERSITY OF TORONTO. I AM DOUBLE MAJORING IN CRIMINOLOGY AND PHILOSOPHY” Yandy Zuo Owner of Thoughfully Handmade Toronto, Ontario


PRINTED COPIES ARE AVAILABLE AT WWW.DREAMER2CREATORMAG.CA

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LinkedIn for Entrepreneurs: It is Online Business Branding Part 2 Self-employment means you must build a brand and gain respect your own way both on and offline! LinkedIn is a handy tool to have, but many business owners underestimate its power to help.

Summary (Story) These 2000 characters is where all the magic happens. More is more, so take advantage of all the space you have. Think about your target audience and speak to them. Imagine you are at a live networking event, engaged in conversation with a potential customer. Own your space and think of how you can transfer your story to an online format. You want both your passion, personality, and value to shine. Write in the first person and do not make it a cut and paste of your resume because potential clients are using LinkedIn to get to know the person behind the title and “why” they would choose you. Use “key” words that relate to your industry and skills

and post relevant links and documents to add to your credibility and track record (videos, PDFs, slide-shares, pictures, articles, and other relevant self- business marketing material). Also, create “anchor links” to any websites / social media sites (Customize the three websites at the top section of your profile which is called the introduction cardIf you select Other from the list, you can type in your own website title). Five key tips to writing your LinkedIn story: 1. Start off with a catchy opener that will grab attention

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2. Create a speciality section with keywords (do not think keyword stuffing but rather keyword strategy) 3. End with a Call-to-Action (CTA) and let readers know what you would like to do next 4. If you have a company page, encourage readers to “follow” it 5. Show your personality and use as much of the 2000 characters allotted. In this case, more is more!

a few samples: Liz A Muhammad Niaz Brian Massey Chantal Soumis Amber Peay Matija Squire Kwesi Sekou Millington Adam Buchbinder Ana Lokotlova

(Personalized) URL Check your profile URL. If there is a long string of random numbers, it means you have not customized it. Customize it to your name and then sprinkle it all over your marketing material. Ideally, make it your first and last name. If it is already being used, plug in your middle initial, reverse the order, or use your brand name. The point is to create a URL that’s easy to remember and distinctly you. Skills and Endorsements

Including specific skills is a great way to showcase your abilities. Take an 80-20% approachIndustry-related vs transferable. Make sure you are reporting important words that have already been sprinkled throughout your tagline, summary, and experience sections. Many professionals question the value of endorsements, but they are important: 1. They work to boost your credibility and your ability to be found via the search algorithm 2. Combined with mighty recommendations, you

will stand out from the crowd 3. They support the art of reciprocity-the power of give and take is crucial on LinkedIn 4. When you hit 99-it won’t change your LinkedIn life significantly, but we are all human, and numbers make a difference for people when deciding who to trust; trust is what builds relationships, and building relationships is what ultimately builds business Recommendations (Testimonials) Recommendations work with skill endorsements but are much stronger when it comes to social recognition and building credibility. This section is where others get to speak about you by sharing their “why” and influencing others with stellar professional and personal reviews. Social recognition matters because what others think is a powerful influencer when it comes to both products and services. Other LinkedIn Tips for Entrepreneurs: • Be social and post status updates regularly (70% business and 30 % other) • Be a thought-leader by writing and sharing relevant blogs • Join and be active in industry-related groups • Connect and build relationships with people who have strong networks on LinkedIn and know how to navigate the platform effectively and proactively • Be a giver and not a hoarder of what you know • Build a company page for increased business branding (https://topdogsocialmedia.com/ create-linkedin-company-page/) • Think “building relationships” first and not sales • Customize all connection requests but don’t follow up with an immediate sales pitch • Provide your contact information • Connect LinkedIn to Twitter • Establish the relationship online but then move the conversation and relationship-building offline. My favorite-A LinkedIn Latte invitation! If you are an entrepreneur, having a LinkedIn presence is necessary and important for you and your company’s branding strategy potential. By: Shelly Elsliger President of Linked Express https://www.linkedin.com/in/selsliger/

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AN INVESTMENT IN KNOWLEDGE PAYS THE BEST INTEREST.

Benjamin Franklin

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Financing your dream idea with

STUART BROWNE

Please introduce yourself. up was never an option. I just had to make it work. My name is Stuart Browne. I am the CEO and Founder Several things kept me motivated. I had some of PyCap Venture Partners. people working with me, for me and depending on me. And that’s a tremendous amount of stress What is your first memorable life experience that and responsibility. I recognized that the successful you feel led you towards the path of becoming an career of others was dependent on the success of entrepreneur? my business. I could not let them down. Stuart: Originally, I wanted to get into investment I also had intrinsic motivation. I knew I wanted to banking, but I had an entrepreneurial spirit and run my own business in whatever shape or form. was unsure how to fulfil that in the financial/ There was no contingency plan, so I had to succeed. banking world, which is what I studied, and was passionate about. I started volunteering at different Share with us an overview of PyCap Venture events related to angel investing, technology and Partners. entrepreneurship. I saw an opportunity to create a Stuart: PyCap Venture Partners is a company corporate finance venture capital company and did with three interrelated departments/divisions, exactly that. namely corporate finance, venture capital fund and PYCap academy. Corporate finance is the Entrepreneurship requires a significant amount of largest segment of our company. Our goal is to aid time and mental capacity. Were you ever tempted technological companies in achieving substantial to give up? If yes, what made you continue? growth. We often see finances being mismanaged; Stuart: As an entrepreneur, I empathize with other a lot of companies have great ideas and innovative entrepreneurs. It is an emotional roller coaster of concepts but are not optimizing their potential extreme highs and extreme lows. I was never really earnings. We utilize our skills and experiences, tempted to give up personally because I knew to my analyze the company and ask the right questions core that I needed to be an entrepreneur. I won’t be to develop a financial model that details potential happy working a nine to five job for somebody else. cash flow issues, how much capital needs to be And so, even when I hit those extreme lows, giving raised, and a detailed list of expenditures. Another segment of the company is the venture capital fund. We have a broad network of institutional investors, incubators and other We often see finances being mismanaged; stakeholders in the venture capital world a lot of companies have great ideas positioned throughout Canada, the USA, and in and innovative concepts but are not different regions within Europe, South America and Asia. Our strategy is to invest in early-stage tech optimizing their potential earnings. companies. Predominantly ones that are related to artificial intelligence within financial services, DRE A M E R 2 CR E A T O R B USI N ESS M A G A Z I N E

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agriculture and healthcare sectors, and facilitate their growth by getting these companies to access new markets overseas. The third portion of PyCap Venture Partners is called PyCap Academy. We meet entrepreneurs, investors and government personnel through universities, events and incubators. We teach them how to grow a company, how to identify excellent investment opportunities, and how to build a portfolio. We currently have several curriculum courses with the University of Toronto, and the Schulich School of Business in their master finance MBA and their Master Management programs. At what point should a company approach you for consulting and investment? Stuart: Before we enter into any consulting relationship, the company must present us with a proof of concept, working prototype and some market validation. They must show us that they have a product that works. It doesn’t have to look pretty, wires could be hanging out, but we must be able to try it out and see it in operation. We also

require proof that there is some demand out there for the product. We prefer to work with companies that have raised a bit of capital on their own, but it’s not a requirement. In regards to investing in a company, we take a package kind of approach as most venture capitalists do. We rate the company using a list of criteria. We anticipate that not all items on our list will have high ratings, as the companies that

It takes a strong team to make a company successful, whether they have partners, hire people or bring on advisors. are looking for investment are in a developing stage. We will carefully analyze each category, and if the company shows strong potential, we will consider getting involved. We are looking for companies that are called Series A and Pre-

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Series A Round, which means they have developed the product significantly. They should be close to commercialization, or are already commercialized and are generating revenue. They should also be looking to expand and have the ability to go global. You have mentioned that you work primarily with companies that operate in the technological, agriculture and health industries. Why have you chosen these particular industries? Stuart: We see considerable growth potential for all three of those industries. They are relatively recession-proof, and our team members and partner organizations have the knowledge and expertise of these industries to evaluate and perform a deep level of due diligence effectively. What training is needed to become a successful venture capitalist? Stuart: The two main areas of focus for a venture capitalist are entrepreneurship and finance. But it is also essential to engage in a variety of topics that will give you a well-rounded skill set. A venture capitalist is expected to get involved with their portfolio companies, and help them grow, which can include everything from helping them with the marketing, managing finances, providing insight on the tech developments, and connecting the companies with a strong network of potential partners. For example, the role of a venture capitalist is a lot more involved than the role of a mutual fund manager, because the mutual fund manager is only concerned with the finances. What should an entrepreneur do to prepare for a presentation to a venture capitalist, and what can entrepreneurs expect when working with your company? Stuart: Create a solid investor presentation, financial model, and a virtual data room, also known as a VR. VR’s have all necessary documents for the investors to perform due diligence on the company. It is

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vital for an entrepreneur who is looking to get funded to have a firm understanding of why his or her company is valued as it is. If they want investors to take them seriously, their knowledge of valuation will be evident in the negotiation process. There is often a misconception out there that venture capitalists are going to go into a company and get a majority stakeholder position with the goal of firing the CEO and completely taking over. That is not the goal of my company. First and foremost, we are not looking to take a majority position. When investing in a company at such an early stage, we do what is commonly said in the VC world, “betting on the jockey, not on the horse.� The jockey is the entrepreneur, and the horse is the company. We are betting on the management teams, particularly the founder, or CEO. We want an entrepreneur to feel incentivized enough to stick with the company, instead of leaving for a job or starting another business. Both parties need to feel respected and comfortable within the relationship. What training do you think entrepreneurs need to be successful at the business management side

of the business, such as budgeting, sales and operations? Stuart: First and foremost, an entrepreneur should not try to be a master of everything. It takes a strong team to make a company successful, whether they have partners, hire people or bring on advisors. A tech company, for example, needs strong technical expertise, even if it means outsourcing R&D to a software development firm. They need someone on the team to understand the technology, how it is built, and how to address any problems that may arise. Someone with a strong marketing ability is needed to combine branding, to perform intense mobile market research, to test the idea, the product and make sure there is a product-market fit. They need someone good at budgeting and financials, to be sure that the money is managed effectively. All of those skills are critical for every business to have. People can learn things on their own. But often it is difficult to do so unless you are in a structured format, such as a school. Building out a strong team of support, in my opinion, is central and something that investors look for.

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Capital is a significant component of startups and often determines their ability to expand. What advice would you give entrepreneurs who do not have access to the required capital investment? Stuart: If they are not able to get investors, they should bring money into the business by preselling their products or utilizing their skillsets to consult. They should ensure all activities are related to the core business itself. In essence, they should be looking to bootstrap before they start pitching to investors. There are two reasons for this. One, it will make their business model stronger. And

I would say, 80 to 90% of startups fail to validate their market before they start spending too much time building the product two, it will strengthen their skillset within their particular industry. When the entrepreneurs eventually go to investors, they will be seen as resourceful. What one tip can entrepreneurs use to generate ideas for upgrading their product and service to gain the attention of a venture capitalist or new customers? Stuart: Look out into the market or industry that you have a background in and are passionate about. Then find real problems that your target market is having. Your idea should be centred on solving those problems. I heard an excellent quote from an entrepreneur. “The entrepreneur should not fall in love with the idea, the technology, the opportunity, the money, or the plan. The thing that the entrepreneur should be falling in love with is the problem.� Was the business idea for PyCap Venture Partners tested and how? Stuart: Yes, definitely. Before investing time, money and energy, setting up a business, the best

way to test a business idea is by pretending the company is already set up. Look at the reaction of prospective customers when you ask them to buy your product or service. It might feel weird, but it goes a step beyond having focus groups or talking to friends and family. Sometimes, people are just being friendly for fear of hurting your feelings. Pitch competitions are some of the events that you currently utilize within the education segment of your business. Do you have advice on how entrepreneurs can engage these competitions and their benefits? Stuart: Pitch competitions are a great idea that pushes you out of your comfort zone. You are required to show an audience of people your idea, and depending on the quality of the judges, you are going to get good feedback that will help you fine-tune your business idea. You will also get exposure and build your credibility, which will aid you in raising money. Acceptance into the pitch competition is proof that you have satisfied the due diligence requirements of the competition. Sometimes the judges are investors themselves. I judged several pitch competitions and became aware of some exciting entrepreneurs and startups. What are the top two mistakes startups make, and how can they be avoided?


Stuart: The number one mistake is not validating their business idea until it’s too late. The failure rate for startups is between 80 to 90%. And I would say, 80 to 90% of startups fail to validate their market before they start spending too much time building the product. There is a quote that comes from Mike Tyson that says “Everybody has a plan, but your plan gets thrown out the window when you first get punched in the face.” This metaphor reflects the path of many entrepreneurs. Entrepreneurs create a business plan based on secondary research, exhaust time, effort and energy, creating it, and spend money hiring personnel to execute tasks. But when they get out into the market, and they try to sell their product, they are faced with the harsh reality of little to no market validation. Unfortunately, most of the time if you have not validated your business idea, it is not going to work because you’re developing something in a vacuum. It is not based on reality but based on your ideas. You should test your idea as early as possible rather than be punched in the face with a sad reality. Another mistake is not adapting. When customers are giving feedback, listen to them. Thank you for sharing with us today. You have given us a clearer picture of the venture capital world and options for financing a business.

website: www.pycap.ca email:info@pycap.ca Tel: (647) 607.4986

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WITHOUT A PLAN, YOU SPEND A LOT MORE MONEY THAN IS REQUIRED.

from Dreamer to creator: reframing deterrents in our paths


A Buy-Sell Agreement creates certainty and a ‘game plan’ in case one or more of the partners are no longer able or willing to commit to the business.

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BUY-SELL AGREEMENT DETAILED This is part two of Buy-Sell Agreement. Part one is available in Issue 2 of the magazine and is entitiled, Buy-Sell Agreement Defined. WHAT TO INCLUDE IN THE BUY-SELL AGREEMENT Since a buy-sell agreement is a legally binding document, it generally should be drafted with a knowledgeable and experienced Legal Professional. Most agreements started through a generic template, but then are customized for the needs of each business/partner and can be a reasonably thorough and comprehensive document. There are various components of a buy-sell agreement, and several aspects that need to be addressed, such as the valuation of the company, ownership interests, buyout clauses, and terms of payment. The agreement should generally be drafted at the very start of the business, to avoid any issues or misunderstandings later on. The agreement will also address certain ‘triggering events’, which are listed below. Disagreement: Conflict between owners of a business in regards to the direction or management of the company can sometimes occur, and can even push the most successful business off-course. In a situation where no agreement or mediation can be reached, it may make sense to allow for one or more of the partners to be bought out. This would enable the business to continue moving forward and is often referred to as a ‘shot-gun clause’. Sometimes a situation where one owner offers to buy-out the other would also offer to be bought-out for the same value, thus ensuring fair treatment and value of the shares. Divorce: An owner who is in the midst of a divorce may be bought-out by other partners, to protect the company ownership. A divorce settlement will generally depend on the partner’s share of the business. It’s not uncommon for a family law judge to order a business owner to split his or her interest

in a company with the former spouse. To protect the business from this event, a clause should require the shares held by the former spouse of a partner to be acquired by the company or one of the other owners. Retirement: The value of the business comprises a significant component for the retirement of many a business owner. Allowing the remaining partners to reclaim the interest in the company keeps the business intact and provides the retiring partner with a market to liquidate their ownership. There may be a distinction in the agreement between early retirement and regular retirement and how the shares of the departing owner are to be valued. Bankruptcy: Borrowing money to expand or grow the company, or to purchase equipment or goods, is a common occurrence for many companies. However, lending institutions often require personal guarantees from the owners/ shareholders of the business. Having one or more owners that are not able to provide this guarantee can lead to higher fees and impact the overall financial well-being and growth of the business. Therefore, a provision should be considered to allow the other shareholders the opportunity to acquire shares of the defaulting shareholder(s). Disability: An owner who has become disabled and unable to perform their duties can impact the overall well-being of the business. The agreement should address several situations and questions, such as whether the partner will continue to receive a salary, and for how long, or whether they will continue in the day-to-day management of the company.

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The buy-sell agreement also needs to define what is considered a disability clearly and should include a timeline for which the disabled partner would be allowed to return. Often the business will purchase disability buy-sell insurance and link the definitions to the plan. This has the added benefit of providing an independent third party to determine when the criteria for the buy-out are satisfied. Death: The death of a partner is an unfortunate and challenging situation for both the family and business partners alike. To deal with the stress of continuing the business, establishing the rules of business continuity upon death provides peace of mind to both the surviving partners and the family of the deceased. The surviving partners benefit from the assurance of not having to deal with an unwanted partner, and the family is assured that they will be treated fairly. Generally, all partners/co-owners will be covered by a ‘key person’ life insurance policy. This can be paid by either the company or the other partners, where the death benefit would be used to buy out the deceased owner’s shares. FUNDING THE BUY-SELL AGREEMENT Without sufficient resources to fund a potential buy-out, the agreement itself can fall apart. The partners need to decide where the money will come from to complete the buy-out – whether it will be the responsibility of individual owners or from the company itself. While not all events can be protected, two can: the death and disability of a shareholder. Funds can be made available at the time they are needed. Thus minimizing potential liquidity issues; protecting the business, the impacted shareholders, as well as the family of the deceased shareholder. Using insurance provides the protection needed at a fraction of the cost to the alternatives and can provide immediate capital and significant tax benefits.

by S EUN ADEYEMI Contact: sadeyemi@sacapital.ca

www.sacapital.ca Tel: 416-803-4538

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Rehoboth Electrical Services Inc

OUR TEAM IS READY TO SERVE YOU CONTACT US TODAY [289] 401-9742 Rehoboth Electrical Services INC. is an electrical contracting firm that values efficiency, quality and customer satisfaction. Our electricians can install anything from new security lighting for your outdoors to a whole home generator that will keep your appliances working during a power outage.

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WWW.RESINC.CA

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ESA/ECRA #: 7009658


The Side Hustle You Need To Consider If you own your own home, here is a side hustle you

should seriously consider- renting out a portion of your home on Airbnb. It can be a very lucrative side hustle that can be managed simply on your phone.

T

he first step to becoming an Airbnb superhost is to have an impeccably decorated space. Whether that is a separate apartment or a room in your house, dĂŠcor matters here. If you do not have great taste, make sure you hire a professional to put together the room. It is worth every penny. Any upgrades you make to your home can help add value to your property.

S

econd, hire a professional photographer. Pictures Matter. The only thing a potential Airbnb guest has as information to book your space is how it looks in pictures. Do not be tempted to take photos with your phone. It will not do the job adequately. I do not care how much of an Instagram star you are. You must hire a professional photographer.

T

hird, write a compelling description of your place to entice people to book it. Start reading other people’s descriptions to get a feel for the verbs and adjectives you should use.

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F

S T

ifth, go to the Airbnb website to see what others in your area are charging, so you know how much to charge for your nightly rate. If you would like to do more indepth research, visit www.airdna. co which scrapes the data from Airbnb, VRBO & HomeAway and www.padmapper.com so that you can see how much money others in your area are making.

ixth, add a combination lock on the door so that guests and cleaning staff can enter without needing a key. hen upload your pictures and descriptions to the Airbnb app and watch the dollars roll in. You do need to decide who is going to clean the space. Some hosts do it themselves, and some hire it out. I use an outside company and let them know when my guests will be checking out. Their cleaning staff comes in with their own cleaning supplies, cleans the space and leaves. I recommend allowing guests to check-in at 4 pm and asking guests to check out at 11 am. Airbnb also allows you to charge a cleaning fee on top of your nightly rate. This will help you to recoup your cleaning costs. I recommend a cleaning fee of $50-$100. I’ve found if the cleaning fee is too expensive, guests won’t book.

T

his will be a small investment in funds and time, but the payoff is enormous. The best part is that once your guest checks in, Airbnb transfers the money into your bank account within 24 hours. Account for all of your costs that you incur setting up your short-term rental so, at tax time, you write off these expenses with the revenue that you are making. If you already have an HST number, then you must remit HST to the Canada Revenue Agency (CRA). If you don’t have an HST number, then you only need to remit HST to the CRA once you’ve earned over $30,000 on your rental.

F

or inspiration, watch My House is Your House on HGTV & Stay Here on Netflix to see how the experts do it. You can check out my Airbnb spaces at https://tinyurl.com/MyBsmtApt or visit www. marystreetguesthouse.com. By: DAVELLE MORRISON, Real Estate Agent Contact: morrisonsellsrealestate.com/

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ourth, write a guidebook of things to do in your area. For this, you can google to find sample guidebooks to make it easier for you to put it together.

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building a community There are different ways to define community and community can exist in different places. I have lived in Calgary, Alberta for 15 years, it is a pretty big city, and while I was growing up, I didn’t feel very connected to it. That was until I found my place in the city, my community. Three years ago, I started a vegan lifestyle blog. I was excited to blog about local companies, connect with other bloggers and go to events around the city. I reached out to anyone with similar values to mine or was doing something cool and asked them out for coffee. You would be surprised at how many people are happy to meet with you; they are probably looking for someone to connect with as well! In the beginning stages of my blog, this is how I grew my network and content. This brings me to my number one tip for building a community which I also think is something that everyone can benefit from. That is networking. Networking is crucial and will eventually help to build your client list. I stepped out of my comfort zone, which is when the best things happen, and I met with as many people as I could! It takes a lot of time, but the connections you will make are invaluable. As an entrepreneur, you need connections to grow the business. Through networking, I found a group of entrepreneurs in Calgary that inspired me and understood what DRE A M E R 2 CR E A T O R B USI N ESS M A G A Z I N E

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it is like to create a business around your passions. They are a great support system, and we still keep in contact and meet up often. This was when I started to find my community within the city. After becoming more established in the blogging world and learning that Calgary had a lot of amazing bloggers, I created a group called the YYC Bloggers Babes. I hosted an event each month at a different space in the city where we would meet and discuss a new topic about blogging on each occasion. Sometimes we would have a speaker come in that would share their story that could help us with something in every part of our life. We always left feeling inspired and motivated. It’s incredible what can happen when you connect with people who share the same interests and goals as you. So how do you find these people? LinkedIn and Instagram were the main ways that I found people. This brings me to another place where you can create a community, online! I have met some of my best friends, clients, and business partners online. Instagram makes it so easy to find people in your area with location tags and hashtags. My top tips for building a community: • Use social media platforms to find people with similar interests to you or someone that you want to learn from • Engage with people online. Like their photos; leave comments; and start a conversation • Do not be afraid to reach out! Send them a message; ask them out for coffee; the worst thing that happens is that they don’t reply • Network! Find events near you and go alone, so it forces you to meet new people. • Create an event! Can’t find an event that interests you? Create it, and your community will come!

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By: ZANDRA THOMSON Website: : www.lifewithzandra.com

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How to Price Your Product

When you first start your business, one of the biggest questions will be how much should you charge for providing your great idea to the public. So here are some general guidelines of things to consider when you begin setting prices. 1.

What

does

it

cost

to

produce?

This one is the easy one from a material standpoint. How much do the components cost? How much do the tools to create it cost? How much does the space to produce it cost? Do you need storage? The one that is most easily forgotten is labour, especially yours. However, that is also a cost of production.

2.

What

does

it

cost

to

market?

Do you intend to run Facebook campaigns? Billboards? Affiliates? All of these are costs you will incur to push your message into a general market. Usually, this can eat 20- 30% of your profit.

3. How do you intend to run promotions? Most promotional methods will ask you to provide value to their audience, so you need to have an extra 10% to be able to subtract on a whim from your pricing. It also allows room for group discounts.

4. Will anyone pay the price totalled above? This step is now crucial. At no point should you offer your product free to the market. It is incredibly difficult to get anyone to pay for something they already receive free, or anyone receives free. So, if you discover the price point is $0, you must return to step 1 and rework the product. I want to take a moment to highlight this as crucial. We start businesses to solve problems and be financially stable ourselves. Having to sell at a DRE A M E R 2 CR E A T O R B USI N ESS M A G A Z I N E

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lower cost than we expend, INCLUDING labour, will close you faster than almost anything else.

5. Compare to your competitors’ prices.

tariffs impact our base costs. None of these things can take us out, which is something that should be discussed regularly in your company leadership or just with yourself.

I say this last because this is only required to field potential market objections. If you have followed the previous steps correctly, you already know the market WILL bear your price. So whether or not a competitor has a lower one is inconsequential. You need to delineate what sets you apart so you can capitalize on these differences.

By: MICHELLE ALEXANDRA C0-FOUNDER Website: www.mileagetrakker.com

Pricing is what will make your venture sustainable. It is what will allow you to add staff and services over time, so planning for that eventuality from the outset will make achieving those goals that much easier. 6. Don’t be afraid to change prices. Your costs will fluctuate, so will your price. Make sure you honour any promises currently made but don’t be afraid to fluctuate going forward. It will give you flexibility and insulate you from your own rising costs. Pricing is what will make your venture sustainable. It is what will allow you to add staff and services over time, so planning for that eventuality from the outset will make achieving those goals that much easier. Be sure that you and your team can live in the places they need to work and that you are protected from the rising costs of services you need to operate. In our case we provide a plug n go service for automobiles that requires a physical device. Our pricing has to account for cellular service, device build, two co-founders livelihoods, a PR arm, an ongoing social media campaign and extensive travel. If our device does not make a profit above that, operations begin to fail. Beyond that, we have to be able to offer bulk discounts to be competitive, and things like rising US DRE A M E R 2 C RE A T O R B USI N E SS M A G A Z I N E

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BUSINESS: THE ULTIMATE ADVENTURE


resources This article is intended to get you started in the right research direction. There is a lot of information to sort through, and exact information will depend on several factors, location, age, business type, industry and more. Grants: Business grants in the traditional sense of the word are very hard to find. For example, an employment grant means you will be reimbursed some of the money used to pay your employees. The government sponsors this program, processed by third parties and have caveats because the government is either trying to reduce youth unemployment and provide jobs for immigrants. Links to start are: https://innovation.ised-isde.canada.ca/ s/?language=en&lang=eng https://skillsforchange.org/employers/canadaontario-job-grant/ Loans: Futurpreneur Canada helps entrepreneurs between the ages of 18 and 39. Futurpreneur Canada partners with BDC to provide up to $60k. https://www.futurpreneur.ca/en/ You may also go directly to BDC for loans and grants https://www.bdc.ca/en/financing/pages/default.aspx https://www.bdc.ca/en/bdc-capital/venture-capital/ pages/venture-capital.aspx

Community Grants Community grants tend to be local to you so you will need to research this yourself. Start with your local credit unions. Alterna Savings gives loan to Ontario businesses only. Access Community Loan fund gives to the Greater Toronto Area and Hamilton. Crowdfunding Crowdfunding is an option. The mistake many persons make with crowdfunding is not putting their money in first. Persons are less likely to commit to being the first investor. Make sure your profile is also compelling. www.kickstarter.com https://www.indiegogo.com/en https://www.patreon.com/ Pitch Competitions Dragon’s Den is an example of pitch competitions, but many smaller ones are easy to get in and can yield $500, $10,000, or more. Use eventbrite.ca to start your search Labour Costs Using university and college interns will also give you help with labour costs. This requires time to mentor the intern, but you will both grow from the experience. You are sometimes required to pay a stipend. I recently learnt that Facebook groups offer internship opportunities as well.

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WHAT DO YOU NEED TO START A BUSINESS? THREE SIMPLE THINGS: KNOW YOUR PRODUCT BETTER THAN ANYONE, KNOW YOUR CUSTOMER, AND HAVE A BURNING DESIRE TO SUCCEED. DAVE THOMAS, FOUNDER, WENDY’S


BOOK AVAILABLE FOR SALE AT AMAZON.CA & CHAPTERS.CA

Profile for Dreamer 2 Creator Magazine

Dreamer 2 Creator Business Magazine Issue 3  

This issue speaks to financial Acuity. The featured article is with Stuart Browne, A Venture Capitalist who gives insight into the venture...

Dreamer 2 Creator Business Magazine Issue 3  

This issue speaks to financial Acuity. The featured article is with Stuart Browne, A Venture Capitalist who gives insight into the venture...