Laurence Felx-Leduc, from the Business Loans Department at National Bank, gives her advice in order to put your project on track.
When you have little experience in this area, starting your own business and finding financing can seem like insurmountable challenges. Laurence Felx-Leduc, Section Director, Business Loans Services at National Bank, gives seven tips to help you get the best of your luck.
1. Build on strategic thinking
Before taking the plunge, one must first think about one’s business model. The latter, not to be confused with the business plan, which is much more detailed, determines the targeted clientele, the positioning on the market, the key resources, etc.
The tool offered by the National Bank on its website is particularly useful (www.nbc.ca/en/business/programs/business- startup / my-business-model.html). The downloadable matrix makes it possible to visualize the main strategic lines. “This document also reflects the seriousness of the entrepreneur’s approach when he meets his financial institution for a funding application,” said Laurence Felx-Leduc, section director, Business Loans Service at National Bank.
2. Test your product
When you start a business, you usually have very little money at your disposal. Crowdfunding not only helps to find cash but also to feel the pulse of the market. “Potential customers place pre-orders for future products and services, generating a down payment,” says Felx-Leduc. The Ulule platform (http://ulule.ca/) gives a good boost in this regard.
3. Produce its financial forecasts
When meeting with the financial institution, the future entrepreneur must be able to demonstrate that he will be able to repay the sums lent and ensure the sustainability of his business. For that, he will have to provide financial forecasts concerning sales, costs, profits, etc. An accountant can prepare this document, but one can also use online budget sites such as Budgeto (https://www.budgeto.com/)
4. Build your down payment
“In general, an entrepreneur does not get 100% financing from his financial institution. The percentage granted depends on several factors, but one thing is certain, he must necessarily invest money from his pocket, “says Laurence Felx-Leduc. This personal investment will support the company’s activities during its first months of existence, before the profits begin to flow into the coffers. Demonstrate to the potential lender that this down payment has already been planned will help build credibility
5. Know how to surround yourself
To get started in business, you need to know how to surround yourself and build a solid network of professionals. An accountant for financial statements, a lawyer for contracts, a financial institution to support development projects, etc. “You can include business incubators and accelerators, which help get you started, test products and market,” says Felx-Leduc.
Ideally, this network of partners is complemented by a mentor whose expertise and experience helps the novice entrepreneur take his first steps and avoid pitfalls. “Mentors have gone through the same stages and have certainly experienced the same periods of enthusiasm and discouragement. Their advice is very valuable, “says Laurence Felx-Leduc. Réseau M (http://www.entrepreneurship.qc.ca/mentorat-pour-entrepreneurs), of the Fondation de l’entrepreneurship, facilitates the link between mentor and mentee.
6. Make yourself known
To sell its services and products, customers must know that a company offers them! Word of mouth, the use of social networks, networking are among the tools that will help to make them known. “However, for that, you have to go out and meet potential customers or suppliers. We could even find business partners, “says Felx-Leduc. For example, we participate in events organized by chambers of commerce and professional associations, we increase its visibility on the Internet and social networks, etc.
7. Keep cash
Liquidity is the nerve of business warfare, and not having enough is often a classic mistake on the part of inexperienced entrepreneurs. “We must remain conservative in its investments. You do not go into big spending, even if you feel like you’ve made a lot of money. It is better to put money aside for periods when business is quieter, or you have to face an unexpected expense, for example because of a broken equipment, “recommends Laurence Felx. The Duke. In this respect, it is better to be more ant than cicada!