A business plan is the key to a successful small business
We just spoke to a small business owner from Hamilton, Ontario who was successful at obtaining $73,500 in private funding for his business and all thanks to a well developed business plan.
After speaking with Daniel, we wanted to share his points with you to help you better plan your own small business and funding search.
Here is a little bit about our latest success story;
Daniel Fortin from Hamilton, Ontario first got into business in 2015 and quickly after realized what a terrible mistake he made after his business started crashing down a few months after. "I didn't have a clue as to what I was doing and I simply wanted to wing it", says Daniel. Quickly after learning that it needed a lot more than to "just wing it".
Why did your business "come crashing down"?
I started the landscaping business pretty much over night. I worked for a landscaping company which did fairly well with it's employees and I thought if I did the same on a smaller scale I could do just as good. In the first week I purchased a new truck and trailer (on a line of credit) and got excited on the "look of my business" rather then the functionality of things. When I was done making it look good, I've spent all of the money and had no customers at all. So I would have to say, lack of planning took me and my business by surprise and I was done.
What could you change if you had a chance?
Definitely just slow the entire thing down and start from scratch and plan properly. I wouldn't have rushed it so fast and for sure I wouldn't have purchased a new truck and trailer with tools on a line of credit. I literally just finished paying that off now (with no business income).
What made you try again?
I spent the last two years educating myself on small business procedures and simply just researching the entire industry and ideas. I created a list of hundreds of services that I could do that other landscapers didn't even think of. I also paid off my debt, so I felt like I had a fresh start and that I was more educated on the idea of starting my business.
What was your first step when you decided to go for it again?
I registered with you guys (CanadaStartups.org) to help guide me through the process. I used the Business Plan Builder Tool and spent my time carefully crafting my plan which I used to apply for funding through your funding database. It was a easy step by step process which I really liked and it kept me grounded unlike last time around.
What made you apply for funding?
I needed funding because last time I used my own lines of credit and that messed me up. I heard about government funding and tried to apply through your funding database but i'm still waiting on some programs. It seems because I never shut down my business, I didn't apply for a lot of the "startup programs", but I was offered a bunch of loans that I didn't really want to get into right away. They are however on hold for me shall I need them. But I did wan't to reach out to a few private investors that seemed to be interested in my field so I thought they would have some advice for me. And they did.
How much did you get?
After sending my business plan to a few private investors, one contacted me back and he was in Toronto. I actually had a coffee with him and told him my idea again and he shared his own ideas with me for my business. I was offered $73,500 in order to help make my landscaping business more tech oriented with new tools, computer systems, design software and in-field tools such as new phones, iPad for each of my employees and also money to help me hire some staff and train them. But best of all, my private investor offered me his private phone number and the chance to obtain more money as needed. We seemed to really work well together.
What did you give in return for the investment?
The initial investment required that I put forward 10% of my own money, so $7,350. No interest needed to be paid based on our deal, however the investor did want me to run business decisions through him and provide him with 30% profits per quarter. That being said, I did get a business partner out of it as he is willing to invest money for equipment purchase, hiring costs, marketing and advertising costs as well as we grow.
What was the main decision making factor for the investor?
My business plan. After I used the Investor PitchDeck tool and the Business Plan Builder Tool, I was able to share it directly with the investor. We communicated through LinkedIn and he mentioned to me multiple times that my business plan was definitely what caught his eye. So I would have to say my business plan is the reason for his decision to invest with us.
What is your advice to others starting a business?
Learn from my mistakes and don't rush into business. Take your time, get educated and figure out a way to do it in steps. A business plan will definitely help you get there easier. And as much as you think you can do it on your own, get help!