Securing funding can be daunting: Consider that nearly half (44 per cent) of Canadian entrepreneurs have been rejected by an investor, a recent study from Intuit Canada found.
But the problem seems to be with the entrepreneurs. Many approach an investment pitch without a clear picture of where they stand. And that‚Äôs a problem for investors.
The research uncovered some surprising results. For example, one in 10 entrepreneurs seeking investment don‚Äôt plan to prepare anything for their pitch, while 61 per cent spent said they spent less than 12 hours preparing for a pitch ‚ÄĒ less time than planning a vacation.
Other surprises of note: 67 per cent of Canadian entrepreneurs are unsure exactly what investors are looking for; 35 per cent don‚Äôt plan to prepare a business plan; 68 per cent don‚Äôt plan to create a cash flow statement; and 38 per cent enter a pitch with no balance sheet.
‚ÄúThe fact is that a lot of people aren‚Äôt getting into business because they‚Äôre good at finance or business planning. It‚Äôs because they are bringing an idea to the table and not bringing in others to help,‚ÄĚ said Jeff Cates, president and CEO of Intuit Canada. ‚ÄúYet banks need to see things like a business plan or a cash flow report.‚ÄĚ
Entrepreneurs aren‚Äôt necessarily able to do those things without outside help. ‚ÄúThey can draw knowledge from peers, mentors, or any other trusted advisor. Or they can connect with an accounting professional who can coach them through the process. That kind of preparation can make a big difference.‚ÄĚ
To help entrepreneurs improve their chances, Intuit has launched a new initiative in collaboration with Startup Canada, SociaLIGHT, Launch Academy, Notman House and the DMZ at Ryerson University. Startup Foundations was created to educate, train and enable up to 10,000 startups across Canada through free live events, training sessions and online workshops. Participants will learn to improve their basic financial management skills, make better decisions and ultimately fuel business success. Topics will focus on a wide range of business skills, from networking and understanding cash flow to basic bookkeeping and how to grow and scale. Resources will made be available starting in November.
Family businesses can beat high generational failure rates by talking
Family-owned businesses tend to see massive drop-offs with each generation. The numbers bear this out, with 70 to 80 per cent of firms not making it to the second generation; and only 13 per cent going to the third, said Michelle Osry, Canadian leader family enterprise consulting for Deloitte in Vancouver.
However, family-owned businesses can escape the apparent inevitable if they take the trouble to engage in the right conversations at the right time, Osry contends.
It starts by getting a multi-layered perspective on the issues. ‚ÄúFamily businesses are unique in that the system is dependent, independent and interdependent at the same time. Family members need to attend to fiscal, personal and relationship needs in parallel. There are loads of complexities that come into those conversations around things like family values, aspirations, sharing, decision making, accountability, dispute resolution and corporate structure.‚ÄĚ
The key is finding ways to open up what can often be difficult conversations, Osry said. ‚ÄúCreate agendas that set out expectations and provide structure when you‚Äôre entering messy areas. It sounds simple, but it takes a lot of time and effort. Families need to recognize the unique challenges and opportunities they face. But if they can take care of these things in an open conversation, chances are better they can beat the numbers.‚ÄĚ
Small business will determine the economic success of the province: Ontario Chamber of Commerce report
Ontario‚Äôs small business community will play a pivotal role in the future economic success of the province. That‚Äôs the key finding in Obstacles and Opportunities for Small Business in Ontario, a recent report from Ontario Chamber of Commerce and MasterCard Canada. It highlights the contributions of small businesses to the provincial economy and identifies and offers solutions to the most pressing challenges small business owners face.
The research shows businesses with fewer than 100 employees make up 98 per cent of all Ontario businesses and two-thirds of private sector employment in the province. They contributed approximately 28 per cent to the provincial GDP and created 87.7 per cent per cent of the new jobs nationally from 2005 to 2012.
Among the challenges highlighted are: 33 per cent of small Ontario businesses say increasing energy prices will have a large impact on their organization, causing them to delay or cancel investment. There is also a serious mismatch between the nature of vacancies and qualifications of those seeking work, with 39 per cent of employers saying they can‚Äôt fill a job (up from 28 per cent in 2014).
Despite the fact Canadians create companies at a higher per capita rate than Americans, they are failing to scale up at comparable levels to other nations. The OCC report points to the three major barriers small businesses face ‚ÄĒ escalating costs of doing business; a lack of access to the workers employers need; and government funding alignment on infrastructure projects ‚ÄĒ and provides recommendations for each.
‚ÄúSmall businesses in Ontario are being held back by a diverse set of challenges that need to be addressed by all three levels of government.‚ÄĚ Allan O‚ÄôDette, president and CEO of the OCC, said in a statement.
‚ÄúWe are encouraging the provincial government to implement our report‚Äôs recommendations so that we can ensure that our economy will have sustained economic growth for many years to come.‚ÄĚ
First published at http://business.financialpost.com/entrepreneur/small-business-digest/help-is-on-the-way-for-startups-making-a-pitch-for-investment-dollars