entrepreneurship immigrant entrepreneurship

Entrepreneurship Challenges: Financing

For any business owner, the challenges are many – marketing, business growth, profitability and (amongst others) the ever-present challenge of financing. While financing can be a challenge to existing businesses, particularly those looking to expand, in this blog entry I’d like to examine how it impacts start-ups.

Prior to coming to OIN, I spent nearly 7 years in the financial services industry. While I focused heavily on insurance and investments, I did spend a significant amount of time with mortgages and leasing. I was in the industry during a very interesting time, the beginning of this economic shift or recession. All throughout I also managed to see how financing has changed and what it means for business owners.

It seems that these days money is free flowing for tech startups that may have weak (or no) revenue models. Quite simply, millions of dollars are being poured into products that may or not pan out. Of course, the ones that do are phenomenal successes, but these high stakes gambles lead me to ask what about everyone else?

The recent startup visa seems to be geared towards these gambles. While the start-up visa does not specify tech, it is most likely that hi-tech will be the main beneficiary of these venture capital funds. Again, while some of these multi-million dollar projects may create a few jobs, many tend to be short-lived, or absorbed by larger entities. Some may be shelved entirely with their assets stored away to pad a portfolio of patents. Long-lasting benefits to our communities, and are economies as a whole just tend not to happen as a result of these projects.

On the other side, we see small “Ma and Pa” type businesses that require long work hours, have capital needs of their own, and (the successful ones) tend to generate jobs and value for their local communities. These businesses tend to stick around over the long-term, diversify the local economy, and really form the bread and butter of our national economy – in the past 10 years, almost 60% of our new jobs were created by small companies like these. How much do these ventures require?

Many were started with less than $10,000. There succession does require significantly more financing, yet still far less then what the latest App may need, and with far less risk of failure. These are the types of businesses that we need, and unfortunately we are not finding effective ways to give them the capital that they need.

Within my work at OIN, I am constantly looking at ways that immigrants & newcomers can finance business succession opportunities. While traditional lending may work for some, it may not work for all. Sometimes an individual may not be deemed credit worthy, maybe the business is too risky, or some other factor influences. Regardless, there are likely cases where good businesses cannot start, expand or continue because of this barrier.

We are examining several different ways to counter these effects; first, by working with lenders to understand the challenges and potential rewards involved in these transactions. By using the mentorship component of our business succession program, we can reduce the risk to lenders by tapping into the tacit knowledge of experienced entrepreneurs.

Second, we are looking at exciting new finance models. Crowd funding and social impact bonds certainly top the list, although I am sure that new instruments will be created as the economy forces more of us into entrepreneurship and as traditional lending tightens. While it may sound silly, and possibly limiting today, the days of raising equity through a website $10 at a time are likely not far off. And, if our legislation catches up to that of the U.K., we may see Social Impact Bonds becoming a feasible instrument for transitioning businesses.

I hope this will not be taken as an attack on banks; I deal with them in personal and professional life, and without them economic growth would be at a standstill. However, I do feel that we need to look at new models if the old models cannot sold old problems. Please feel free to leave your comments and thoughts on any of these points.

entrepreneurship trends

Why SMEs Will Continue to Grow.

The current state of the economy has driven many to entrepreneurship. In the wake of massive lay-offs in the manufacturing sector, downsizing across all industries and renewed vows to create sustainability, SME’s are a powerful to create diverse, real, and sustainable communities. Although entrepreneurship is not all rewards, here are 5 reasons why SMEs will continue to grow.

1. Generation Y

Brought up to value their own individuality, talents and skills, research has shown that as this generation matures they are more entrepreneurial than those before them . They value the flexibility of entrepreneurship and bring passion and tech skills that allow them to work anywhere at anytime.  In addition, this generation has lived at home longer, and has been less likely to purchase major assets (from cars to homes) permitting them to bootstrap and live on less income than generations before. In pure numbers, they represent a major “wave” of demographics, and the impact of their generation is just beginning to be felt.

2. 3-D Printing and Changing Nature of Manufacturing

These changes quietly started over 50 years ago with the advent of the CNC machine, and within a decade you may have 3D printer in your home.  Imagine printing up toys that your children have designed, jewelry, chocolates, medical supplies, circuits, a new component for a broken piece of equipment or a piece of art for your home. The possibilities are endless. Greater still, is the impact that this will bring to the nature of manufacturing. No longer will massive warehouses dot the landscape, but a manufacturing facility could sit on 2500 square feet or less, producing made to order components, warehousing only enough to fill a small truck. The revolution of desktop manufacturing is near.

3. Increased Environmentalism & Sustainability Awareness

Environmentalism over the last hundred years has come and gone. Over the last two decades, the awareness and trend towards  “green” has not diminished, but rather increased in importance, diversified, and increased in scope. Corporations are adopting “sustainability” as a way of life, incorporating these concepts into their Strategy Maps and Balanced Score cards. Consumers are demanding that the companies they do business with be environmentally aware and sustainable.  It is far easier to develop a sustainable operation with a low carbon footprint as an SME owner.  Many small businesses start off as home based businesses. This makes for businesses with shorter (or no) commutes, lower utility consumption, less or smaller equipment, and growth in Internet communications technology (email and social media) permit SMEs to connect to the world from a smartphone.

Beyond this, there is growing dissatisfaction with the income that CEOs earn. The erosion of our middle class has created calls for egalitarian pay distribution which recognizes the value that all bring to our workplaces and society. Generally speaking, most founders are not making millions, but earn incomes far more modest than the CEO of Goldman Sachs or Citibank.

4. Increased Social Responsibility

SMEs are connected to their local communities. Many times entrepreneurs are involved community leaders and advocates, volunteers for local charities/non-profits, and catalysts for local change. SMEs are tied to their local communities because these communities support them and are where they work and live.  Large corporations stay connected to the public via social media, howeverthese cannot replace local, human ties.

Add to this, the enormous growth in social entrepreneurship over the last decade and the awareness that you can do good, while earning a living.  The social innovation landscape domain is currently dominated by the non-profit sector and SMEs, but as the continued demand for Corporate Social responsibility (CSR)grows, so will SMEs.

5. Worsening Financial State of Western Governments

From the USA and Canada to Europe, governments are increasingly facing fiscal pressures and inabilities to manage their own budgets. In Canada, government funding for social programs and welfare are decreasing. Cuts further erode the quality of life of individuals caught in cycles of poverty. Social justice advocates will always work to secure funding for those most in need, but many will fall between the cracks. Consider the role of microenterprise and SMEs can play in alleviating poverty.

Studies show that median household income of self-employed microenterprisers increases 78% in two years, and 91% over five years. In another guided program (Welfare to Work) participants’ business assets and their net worth grew by nearly 250% during a two year period, and home ownership increased from 14% to 22%. Finally, in Washington State a study by the Center for Economic Opportunity showed that over 50% of microenterprises moved toward self-sufficiency by completely reducing all forms of public assistance over 3 years. This reduced reliance on government programs has a significant impact on the burden the state carries to support low-income families. In this study participant unemployment decreased by 24% in the first year. Strong local economies can be created by fostering microenterprise in low income communities and encouraging the break from the cycle of poverty.  Given that governments have less and less money to give, the growth of microenterprise and SMEs is predicted to grow at increasing rates in the coming years.


Sarnia-Lambton Business Succession Workshop

Here is a great event coming up thanks to the great team at the Sarnia-Lambton Chamber of Commerce. I am delighted to e presenting, and I hope that if you are a business owner in Lambton County, that you will take the time to join us.

Sarnia Lambton Chamber Business Succession Workshop


So, what is Digital Napkin?

Digital Napkin

Digital Napkin is a web site set up to encourage up-and-coming entrepreneurs in Sarnia Lambton to share their ideas, strategies and wisdom with others who might be thinking about going into business for themselves. The site offers a wealth of knowledge and pointers from people who have actually experienced the pitfalls of self-employment as well as motivational strategies to keep others on course.

Many find the resources on the site useful, including grant and funding programs and contact information about the municipal, provincial and Federal agencies plus other on-line sites that can assist entrepreneurs.

The name of the site stems from the popular notion that some of the best ideas are scribbled down on serviettes in restaurants and pubs so that they are not lost!

You can view more at!Digital Napkin - Sarnia-Lambton's Entrepreneur Community

entrepreneurship ideas

Business Library: Driven (Kobo)

Driven Robert Herjavec Kobo

Business Library: Driven Kobo Review – Robert Herjavec

I highly recommend this for aspiring entrepreneurs.

Source: Kobo

Price Paid: $11.99

Bottom Line:

A great read for any immigrant entrepreneur, and especially anyone who is a fan of Dragon’s Den. Some great advice, and not what I expected. Herjavec has a nice guy image, and after reading this its clear to him that friends and business are two very separate things. Definitely some good advice tidbits in here!

Detailed Review Below:

In both my personal and professional life, I am fascinated with entrepreneurship, and read quite a bit on the subject. Despite this, I’ve never really taken the time to blog about my business reads. This inspired me to start this series of blog entries, to reflect and share on some of the better business reads that I stumble across. I have quite a few business books in my library (both electronic and in print) so I figured I would start with one that I recently finished – Driven, by Robert Herjavec.

While Dragon’s Den fans will certainly know the name, this is a great read for any aspiring entrepreneur. As founder and CEO of the Herjavec group, the author talks about his humble roots as an immigrant, and how he amassed a fortune between focus, dedication and hard work. This book is full of great stories, as well as some good lessons on business and life in general.

As a Dragon’s Den fan, I always had this image that Herjavec was a nice guy, almost too nice for business. After reading his book two things became clear: 1) Dragon’s Den isn’t really about business and 2) Herjavec makes a clear distinction between business and personal life.

It is clear that Herjavec, in contrast to entrepreneurs such as Tim Ferris, places a high value on hard work and dedication, and demands the same from those around him. This means sacrificing time with family. Herjavec is quick to let aspiring entrepreneurs know that in many cases business will come before family. Herjavec doesn’t sugar coat anything: he makes it clear that many will mortgage themselves to the hilt, work hard, and even then still fail. He identifies common pitfalls, and what he feels truly sets the successful apart from the wantrapreneurs.

Overall, I really enjoyed this book, and found some good, common sense and accessible advice. Also, I found this book to be very well written and probably one of the best formatted e-books I’ve ever read. More than once, I have had a good read ruined by poor presentation.

I recommend this to both seasoned and aspiring entrepreneurs, and particularly those that are interested in seeing what an immigrant entrepreneur can achieve. Herjavec’s family arrived from Croatia with $20 in their pockets; later he would go on to sell his first company for $100 million. This is what immigrant entrepreneurs can achieve.

Article Keywords: driven kobo review