Banking Tips For Entrepeneurs
TOP BANKING TIPS FOR ENTREPRENEURS
GETTING FUNDING, TAKING CONTROL, STAYING AFLOAT
These top banking tips for Alberta's entrepreneurs cover how to finance your dream business, government programs, taking control in the formative years and tips and tricks for growing your business.
Canadians love being their own boss. According to Stats Canada, over 100,000 new small businesses are created in Canada every year.
However, no one said it would be easy. According to an Industry Canada study, almost a third of small businesses last only two years and only half make it to their fifth anniversary.
So how do you get your great business idea off the ground? And once it’s up and running, how do you keep it there and grow it?
HOW TO FINANCE YOUR DREAM OF OWNING A BUSINESS
The first step is to create a solid business plan with financial projections. Once you have your business plan, there are several places you can turn to for start-up financing. If family and friends are not an option, there are plenty more out there:
GOVERNMENT GRANTS AND LOANS
In the Canada Small Business Financing Program, the government shares the risk with the lender, so loans are easier to approve. They can be put toward business equipment and commercial property; however, you can't borrow for working capital, to pay salaries or to advertise.
Grants, loans and training are available to certain Alberta businesses including clean technologies; women-owned businesses; rural businesses and tech-based products. See details at canadabusiness.ca.
VENTURE CAPITALISTS AND ANGEL INVESTORS
Most venture capitalists are looking to invest in areas with high growth potential. They’ll want equity in your business in return for funding and expect a healthy return.
Angel investors are individuals looking to invest in promising businesses in fields they have experience or interest in. You also give up equity to angels but they tend to want to help manage and grow your business, using their knowledge and contacts.
A growing number of websites help entrepreneurs raise funds. Similar to Kickstarter, these websites allow entrepreneurs to pitch their business ideas to potential investors.
Sites like Indiegogo and FundRazr allow entrepreneurs to raise funds through advance sales of their products or by offering equity, common shares or rewards. The National Crowdfunding Association of Canada is a good resource to find the best site for you.
BANKS AND CREDIT UNIONS
The more traditional routes for borrowing money when launching a business are still financial institutions. They allow you to keep your equity, though funds have to be repaid.
As a Credit Union, Chinook Financial has local teams that get to know your business and help with the funding you need right now. Our commercial term loans help start up your business while our commercial overdrafts and lines of credit help you manage your cash flow.
Here are some tips to help your business flourish in those tricky first couple of years.
- Look at where you want to be in two years’ time. Create a comprehensive business plan with accurate financial predictions so you know exactly what you need to do to get through the hardest phase of your business’s life.
- Develop a convincing Unique Selling Proposition. Once you have an irresistible reason for people to buy from you, marketing and sales become a lot easier.
- Keep a close eye on your spending. Just because you can write off your expenses doesn’t make them free. Use credit cards sparingly and only to help with short-term cash flow. Pay them off in full as soon as you can.
- Build an emergency fund that covers you for three months. Put a third of your income towards taxes, 20% towards savings and the rest on living expenses.
- Invest in marketing and consider hiring an expert as there are many benefits to digital marketing, particularly when it comes to targeting your audience on social media. As soon as profits come in from your marketing efforts, start using some of them to increase sales.
- In the first two years be focused only on what needs to be done, and do it quickly.
The best thing to do is to find a banking partner that helps take the stress out of business banking. Chinook Financial offers a wide range of services to its commercial members that make running your business a lot easier. We help you get paid quicker with speedy electronic payments, cheque depositing from your office and the latest merchant services for debit and credit card payments.
GROWING YOUR BUSINESS
Here are some ways to get bigger without going bust:
- Reinvest your profits in improving infrastructure and customer service, better equipment and streamlined processes.
- Invest in training to improve team performance and help reduce turnover, which is costly.
- Grow your team - hire people to fill the gaps in areas you don’t have the expertise, especially technical skills that help operations run smoother.
- Outsource your least favourite tasks, like balancing books or payroll. Chinook Financial has a strategic partnership with ADP Canada to offer you business solutions like payroll management, time and labour management and human resources tools.
We can also help you get the funds you need to grow:
Commercial term loans for capital investments
Lines of credit for flexible access to funds
Dedicated business credit cards
Administration funds to help you grow your business
Construction loans to build or renovate
Equipment loans or leasing options
Commercial mortgages and overdrafts
Let's chat about how we can help you start, maintain and grow your business.