You’re a small business and wanting to scale up – but don’t have the cash flow to do so. You need funding and you need a plan. So now what?
So often entrepreneurs have incredible ideas yet lack the cash flow to see it through. Not only is it important to source the money, it’s also important to be realistic with your ideas and the money that it will cost you to get there. If you’re unsure of the exact cost for a project, talk to your network. Reach out to your small business friends, reach out to your mentors and build a complete understanding of what it will cost: do you need to hire, do you need a strong media budget, once you have your concept, how will you promote it? Once you know how much you need, the next step is securing funding.
We spoke with our CEO, Kim Gans, for a peek behind the curtains on how she bootstrapped Sweet Flour to take it to the next level of growth. Here are her four tips to consider to advance the next stage of your growth.
Think out of the box to get exposure (and potentially funding!)
While not everyone can make it on Dragon’s Den, and not everyone leaves with a deal, television experience and large-scale exposure via someone else’s network is a big value add. Sweet Flour had the benefit of going on Dragon’s Den in 2016 where Kim received a deal which she ultimately turned down. Despite not emerging with a deal, Kim still experienced the benefits of broad reaching awareness via a well-known entity. When the episode first aired, visits to the website spiked immediately and sales increased significantly, a pattern that re-emerged whenever the show was aired on repeat.
Tried and true bank loan or line of credit
With the rise of shows like Dragon’s Den, Shark Tank, and the constant buzz around angel investors and IPOs, it’s common to think that angel investors are the only avenue to get funding. However, your own bank will often work to find a solution tailored for you. Bank loans and lines of credit with a low interest rate can be a great solution for getting access to cash. Consider a line of credit to help with cash flow, particularly for building inventory prior to busy periods; a loan is best if you are looking to invest in equipment or purchase a commercial property. Aside from your own bank, the BDC (Business Development Bank of Canada) is a great option for small businesses as they offer the most competitive terms and advisory support to help guide you.
Talk to your bank, or shop around, and see what is possible.
Leverage companies like ClearCo (formerly ClearBanc) and Shopify
Companies are recognizing the need for small businesses to get quick access to capital, free from bias and equity-free. ClearCo is a great solution that was created by founders, for founders, and prides themselves on their “equity-free, hassle-free, bias-free” approach to funding, specifically for e-Commerce brands.
Applying for grants
Living in Canada, we also have great opportunities to apply for grants. Check out canada.ca for a grant that may suit you and where you’re at with your business and level of growth. SRED (SR&ED) loans are great options for any business looking to get funding for research and development - but there are many other options that may be a good fit. You will need a strong business plan for most when applying, so preparing that is a great start.
While applying for funding can feel intimidating, it’s important to realize that every business does it, and the more you explore, the more you learn and can better navigate it moving forward. We also like this article for ‘seven sins’ when it comes to borrowing money.
Learn about our Sweet Heroes Entrepreneur contest – and meet the lucky winners!
