How startups can maximize their chances of success
Today's economic climate of high inflation, limited access to capital and sluggish household spending is challenging for businesses across Canada and abroad—and startups are no exception. This might not seem like the best time to launch a young, innovative company with high growth potential—because that's what startups are. But turbulent conditions can offer golden opportunities for new players to bring innovation to the marketplace by stepping up to address key issues like climate change and digital transformation.
It's important to bear in mind that the risk of failure in the first 5 years is high for startups. However, there's no shortage of resources available to help entrepreneurs who are forward-thinking and can roll with the punches. Startups can get a helping hand from generous government programs, various support organizations and a host of alternative financial players. Opportunities to support entrepreneurship are on the rise, both in the private sector and on a government and institutional level.
Launch your business the right way
It's crucial to plan the launch of your business properly. And that's not an easy thing to do. It takes plenty of interpersonal skills and business savvy about aspects as varied as strategy, law, accounting, financing, marketing and sales. One way to stack up all the right skills and mitigate the financial risk of launching a startup is to join forces with others and find a co-founder for your business instead of going it alone. We all need a helping hand sometimes, so it's important to reach out to the various resources in the entrepreneurial ecosystem for peer-to-peer mentorship. It's also a good idea to see how support organizations can help you develop any skills you might need.
Do your marketing homework
Marketing is a crucial step in developing a startup. First, you need to ask yourself: does the product or service I'm offering meet a need? It's important to do market research so that you can understand the needs of your target audience and craft the right marketing strategy. This will help you build a strong brand image and focus on the potential clients you're targeting—while maximizing your chances of success. Another important aspect of marketing is pricing strategy. Is your pricing in line with the perceived value of what you're offering? Should you tailor your pricing for the sales channel you're using? Knowing this information and knowing your customers will give you a competitive edge. These are all essential elements for every startup marketing strategy.
Find the right funding
When you're starting a business, financial savvy is just as important as marketing smarts. If you need funding to get your big idea off the ground, the financial institutions or investors you turn to for backing will be looking at a number of factors including the calibre of your management team, how your product stands out from the competition and how well you're able to reach new customers and generate revenue. Financial institutions will want to see your business plan and financial projections. Investors will need to assess the risk versus benefit of investing in your idea.
Startups can take several years to become profitable. That's why they often need venture capital, as well as non-traditional funding like grants,* crowdfunding and research and development tax credits. Many provinces have core programs to help startups get off the ground.
Non-traditional funding includes grants and subsidies, bursaries and scholarships, crowdfunding and competitions. These sources of funds are used in conjunction with lines of credit, credit cards, conventional loans and venture capital investments.
Go beyond borders
The Canadian marketplace has its limits when it comes to growth potential for startups. That's why many new businesses take their idea stateside and across the Atlantic—because going international can be a great way to fast-track growth. Initiatives like Startup Montréal's Hypercroissance Québec program can help pave the way to international markets for homegrown startups. When entrepreneurs face challenges like labour shortages and access to available capital, they have to turn to new markets to get what they need.
Let incubators give you a boost
Incubators are powerful drivers of growth for startups. They can open the door to networks of investors, grants and subsidies and a wealth of specialist expertise. Businesses that reach out for support grow faster than others and have a higher success rate. Incubators give entrepreneurs a space to test their ideas and get support for their financial needs, and they can help businesses define their management style, refine their strategy and bond with other startups.
Did you know?
There are hundreds of incubators and other resources across Canada that can provide support to homegrown businesses. It's worth taking the time to find the right one for you.
Peer support can be instrumental in helping entrepreneurs not only share knowledge, but also counteract the sense of isolation that often goes hand in hand with starting a business. When there's so much to do, it's easy to neglect your wellness. Mental health is a key issue for entrepreneurs and innovators to keep in mind, because they have a lot of risk and stress to juggle. Initiatives like Le Parachute are all about helping people who run startups to be mindful and keep their wellness in check.
Make Desjardins Business your ally
Desjardins has solutions to help startups find their feet. Our advisors are here to provide you with valuable financial guidance and point you in the right direction to find the key resources and partners you need for your business. They can put you in touch with incubators in your area and other businesses in your field. And they can give you the lowdown about special initiatives like Cooperathon, La Foundry and the Startup in Residence program. Working with a Desjardins advisor is your opportunity to tap into the experience and guidance of an expert who can help you expand your network and give your business a boost.
When you're in good hands and get the right advice, it's easier to stay objective so you can see the challenges of starting a business and address them as you go along.
* Information about funding and grant programs for businesses can be found on federal and provincial government and partner websites.