Every single entrepreneur knows that it is extremely difficult to start a small business if you don't have the capital needed to get started. To help give you that head start that you desperately need as a first time startup business owner, most of us would turn to friends, family members, personal savings and banks to get that extra funding needed.
But there is a few more funding sources that often get skipped. Those sources are private investments and government funding.
We had a chance to interview Walter Senyk from Milton, Ontario. One entrepreneur who decided to go directly to the government in hopes to obtain funding assistance for his tech startup.
As always, we are delighted to be able to share Walters experience and how he was able to secure a $138,000 government grant for his small business startup.
The following is a transcript of our conversation with Walter Senyk:
Tell us a little about your startup.
We are still in the development stages of the business and are looking to launch by end of the year. The business is focused around seniors and senior care. I can't say much just yet until we are closer to launch, however the entire business model focuses on a cloud based service and a wearable device for seniors for tracking, measuring and alerting family, emergency contacts about the activity of their parents, grandparents..etc
What made you want to start that kind of business?
My mother was actually ill at one point a few year back while she was at a retirement home and she had to be monitored 24/7 by the nursing staff there. And while visiting her pretty much every day and spending so much time there, I realized how much work the nurses and the care staff actually put into the simple little tasks that a machine/computer can do for them automatically. They check blood pressure multiple times per day, check hydration levels, check for movements..etc (by having to enter the patience room). Why, I thought? I got the idea instantly and started working on a solution. And here we are.
What was one of the biggest challenges when starting up?
I had a few. The first challenge was coming up with something that didn't already exist and trying to figure out how to actually make it. I ended up partnering with a colleague of mine who was a tech geek and who's had experience dealing with things of this nature in the past. I ran the idea by him and he instantly came up with a solution. Like it was meant to be. This brought on the next challenge. Lack of money to get started and actually make it work. To invest our time and money into r&d and to get the first prototype.
Who helped and backed away?
A lot of friends actually helped. We sort of did everything backwards. We created a website and a monitoring system first. We started working on a phone app before we actually knew how it was all going to work. But we had a lot of help from web developers, mobile app developers and a bunch of nerds for friends. But on the money part, the lack of money was still a issue. I think I used all of my personal savings as did my partner. Every single back pretty much said no right away due to inexperience and not really having much to go off of. We didn't even have a business plan, but just an idea.
What kind of help were you looking for?
We needed help with a business plan as that was going to get us to the next level and hopefully pitching our idea to potential investors who could give us the money and fund the development and further growth of the idea. That was the first towards our funding search.
How did you find the help you needed?
Well if you look around and try to find a business plan writer you have to spend a few grand for sure. That's money we didn't have. We visited one of the local tech incubators in Milton and one of the guys there recommended CanadaStartups. Looking you guys up online, I saw you have some good reviews, some nice success stories and the cost was $297 to register. So it was pretty simple. We took the recommendation and visited your website in hopes to get a business plan made. You have the Business Plan Builder Tool and that seemed like it was the best option for the price. It wasn't until later that I noticed that you also have the Funding Database of all government programs and private investors. That was the moment I had to do a double take.
What was the process to get started like?
To register to the CanadaStartups membership it was really easy. I paid LOL. I think I registered past midnight, and you guys sent me the details right away. That first night I was up all night working on the business plan. Completed it in 2 days and started with the next step, the funding search. It was all very easy to use and simple. Your membership area actually gave me some ideas for our business, the layout and function of it. So got a few benefits out of registering that's for sure.
How did you find the right funding program?
My partner and I sat down and started going through every single private investor, trying to see who would be best suited for our needs. We were looking for somebody in the GTA, somebody with tech experience, somebody who knows our industry preferably. We reached out to a few but we didn't get any replies. Actually I contacted your experts from the membership area and the one that replied back to me told me to look at a specific grant program. When I opened it, I realized it was a government program. I instantly though that it will be difficult, and pointless. Why would the government fund my business if the banks didn't even want to look at it. But after further reading and noticing that the criteria to apply was pretty simple, and we had all of it already we tried anyways.
What are some of the criteria you had to meet to qualify?
The criteria was actually fairly simple. We had to be in the right industry, which we were. We had to be providing a service, which we were. We had to be in the early development stage, had to have a business plan and have a detailed plan for development of a prototype. This program seemed perfect for our business. It was a non repayable grant program, and this sounded even better!
How long did the entire process take?
The application process took about a day and a half. That's because neither of us ever did applications like this before so it was a bit of a learning curve. The terminology, the order of things..etc. But once we sent the application in, the reply from the funding agency director came in about a month later. We were told by CanadaStartups that it can take anywhere between 30 days to well over a year, depending on the funding program, so this was unexpected that it actually happened so fast. When we got the phone call it wasn't to provide more information, it was a congrats you got approved call. At that moment, I literally said approved for what? Who is this? I didn't believe it. Why did they fund us and want to work with us, but banks just said no.
How much funding did you secure?
We were approved for a $138,000 non repayable government grant which was to be split into equal amounts per quarter. So we ended up getting a bit under $35,000 to help us with the initial research and development needed to get our prototype in production. The second $35,000 came in once the design and development were finished and we needed user testing. The third for the same amount came a few months later when we worked on completing the website and the apps for both Android and ioS platforms. Now we are patiently waiting for the last check which will get us live and into production. At the same time, we applied again to two other government funding programs which both accepted us and will start funding our venture as of the 2018. They are for the amount of $27,000 for hiring and training our field staff and a $422,000 low interest loan to help with cash flow for the first 3 years.
How long after being approved did you get the funds?
After the initial phone call telling us we were approved, it took about 7 days after some paper work for us to get our first deposit. Each deposit followed on time there after.
What did you use or will use the funding for?
We used the funding so far, everything that was provided. It was used towards developing the product, user testing, completing our platform and now waiting for production. Once all of that funding is used up the new funding which we were able to secure will be used towards daily cash flow and hiring and training our staff.
What is the next step for your business?
I think we are all going to be busy. We were able to get into 73 retirement homes and senior care facilities in just a few months. All pre-orders of our wearable device for all of their clients, as well a subscription memberships to our cloud based tracking platform. This will definitely bring in the revenue we hoped for and allow us to focus on expansion throughout Canada.
What is your advice to other entrepreneurs?
The only advice we can give you from our own experience. This advice is to have a support team. This team can be your friends, family, mentors, or anyone you can trust and have faith in. Bounce ideas off and share your business idea to get the best results. Always start with a business plan as it will be the guide for your business. A business plan will take you on the path of success.
After speaking with Walter, he sure has one amazing motivational story. Being able to see his facility, and the prototype, it will be a smashing success as it already is. Before launch, Walter was able to secure in excess of 1,700 subscriptions and wearable devices. With Walters permission, this allows his new tech startup to have a pre-launch revenue of $50,286 for the device pre-orders and an on going $16,706 per month in cloud platform subscriptions. Off to a great start and with funding secured through the sources found here in our Funding Database, Walter is a great tech startup success story we can all learn from.