Over the past week, Merchant Advance was glad to have been featured by The Globe and Mail Small Business column! In case you missed the article, we have a link to it here: David Gens is among a panel of interviewees on the subject of emergent financial technology, or "fintech," in Canada.
Technology is making the small business landscape easier to navigate, and helping more businesses find the funding and support that they need to flourish. Increasing the options available to business owners and creating more flexibility in the financial services domain are important goals that will help develop the small business landscape, and we are proud to be part of the evolution of these services and to be recognized by the Globe for making them happen!
The Canadian dollar has fallen to its lowest value since 2004, prompting a wave of concerned analysis from economic experts. The dollar, recently valued at 77 cents USD, remains highly vulnerable to oil price movements - impacting the confidence level of both Canadian consumers and the small businesses they frequent.
The weak dollar is, of course, a challenge for small businesses at home, and for importers, especially of goods from the United States. However, falling exchange rates create economic effects that some small businesses may be able to take advantage of, particularly in specific sectors like tourism, accommodations, online retail and any business with an eye on markets outside Canadian soil.
In 2013, the top six cross-border markets purchased over six billion dollars worth of Canadian goods and services, a large quantity of which was sold through online channels. Despite this, very few Canadian small businesses are fully e-commerce ready - 20 percent or fewer. With the dollar at historic lows, now may be the time for Canadian businesses to explore online outreach and digital/social marketing targeted at key foreign markets, especially those to the immediate south of our borders. Due to the flexible and broad reach of digital marketing and online commerce, the overhead associated with approaching international markets has been significantly reduced. If the investment of time and capital into building an e-commerce portal is too great, consider turn-key alternatives such as Ebay and Etsy.
In the height of the summer, Canadians with vacation plans abroad are increasingly turning to domestic destinations to help their money go further: this has resulted in a recent surge of profitability for businesses in the hospitality sector and those located in tourism-friendly hot spots. Additionally, visitors from the United States and other out-of-country locales may find Canadian destinations a high-value proposition for their own travels. Is your business ready for a potential influx of out-of-town visitors? Consider the potential need to add inventory or staff to meet reinvigorated demand.
Though the summer season is in full swing for many small businesses, the dollar’s troubles may play out over the longer term. Ensure that your business is insulated against the effects of currency value adjustments by planning adjustments to your business model well in advance. As economic conditions change, consumers are likely to turn their attention and their spending power to local and domestic goods and services such as those provided by small businesses across the country. Establishing a strong Canadian business community will help support the economy in the long run.
A study just released by Vancity Bank has provided insight into one of the fastest-growing and buzzworthy business trends of recent years: namely, the explosion of food trucks in urban centres like Vancouver and Toronto. These mobile eateries have been hailed as masters of the modern approach to self-starting and promoting a business, finding and filling a niche and building a captive customer base through guerrilla marketing and use of social and digital resources - not to mention savvy design and branding. Some cities have created festivals where flotillas of food carts band together in travelling culinary convoys.
However, as the report shows, this rapidly growing industry (with its benefits to localization of consumer spending and creation of community-centric identity) faces many challenges in terms of regulations, licensing and cost structure, which can hinder the profitability and success of both new entrants and established players in the market.
Industry Canada indicates mobile food service businesses are more profitable than full-service restaurants; however, average profit for mobile food service businesses is still relatively low at $31,300. Twenty-nine percent of food trucks are estimated to be unprofitable. The Vancity study cites high operating expenses as a chief contributor to the failure of many food truck businesses.
Small businesses in any market hope to achieve the kind of long-term stability and profitability that will make them an anchor of consumer activity and interest in their community for years to come. As cities grow and use of urban space evolves, certain business models grow with a fad-like burst of speed, catering to the interests of changing demographics. Former industrial buildings might be converted to craft breweries. However, these types of emergent businesses are not simple fads, but important reactions to demographic change.
Simply put, change in one sector breeds entrepreneurial advantage in another. Former industrial areas might have the perfect balance of square footage and open plan to start a craft brewery. Areas with residential growth and infrastructural change might see a bubble of bike shops. Independent, community-based retailers can develop "cult followings" among locally motivated consumers. Food trucks are one of the salient examples of this phenomenon: in urban centres with rising density, considerable competition and increasing rent costs, these vendors have found ways to expand employment and productivity in the food services industry in a way that connects with the rising consumer demand for convenience, variety, transparency and support for locally-related industry.
The financial struggles of the food truck sector are a classic case of "fail quickly, fail often" entrepreneurship, where barriers to entry are relatively low but deceptively dangerous when encountered. However, some food truck operators (such as Vancouver's Tacofino) have used their food truck experience as a stepping-stone to brick and mortar operations with a higher degree of business stability anchored in a physical location. This transition helps offset the inherent seasonal and transitional profit variability of food trucks, and allows for the expansion of service to cater to a greater volume of customers in a more efficient manner.
Businesses in an emergent market niche or sector, such as food trucks, are highly dependent on stable operating capital. Securing necessary funding may be a challenge for businesses that are right on the bubble - established enough to have garnered some traction in their market, but looking for the edge that will help them secure and optimize their workflow and profitability. Locally-minded solutions for financing need to be able to cater to the demands of such businesses and help local economies thrive.
Statistics show that it's highly likely that your small business is on Facebook, Twitter or Instagram these days. But do you have a Google Plus account?
Fear not if the answer to that question is a "no." Google has listened to its users and taken a straight look at the facts surrounding its social media service - namely, the relatively low level of engagement when compared to other players in the same market - and decided to send G+ slowly off into the great digital sunset. The search giant announced today its plan to decouple G+ accounts from its other, more popular services including YouTube and Gmail, removing the requirement of a G+ account associated with membership in those other sites' communities.
There are, of course, two sides to this story. Firstly, it asks us to consider the role of social media in small business marketing and promotion. Whether or not your business was on G+, the question of membership in and of itself was secondary. Many business owners ask "Do I need to be on a certain social network (Twitter? G+? Facebook? etc...)?" The answer really comes down to being able to pin down how it is each of those services can open a door to interaction or provide a real value-add to your business. Simply being subscribed for the sake of internet-marketing Jones-keeping will not provide the value that these platforms are designed to create: something Google has realized over the course of its attempt to harmonize its services through G+.
Another lesson that small businesspeople can learn from the decline of G+ is Google's own business savvy in recognizing that the service needed to be scaled back and retooled into something else. Google is particularly good at this: they put time and effort into developing a wide range of conceptual web applications, many of which will never take off in a world-changing way, however, the DNA of those attempts is integrated into future developmental plans. They are, in other words, good at learning lessons from their experiments and knowing when to pull the plug.
This dynamic works differently for small businesses, of course: you may not have the financial resources to commit to R&D and deployment of a highly conceptual business strategy that can afford to fail and be reabsorbed into a future project. However, it is crucial to your success as a small business to know when a strategy, a hire, or an idea is dragging you down - and to know when and how to cut it free.
Aside from being the title of a positively amazing movie featuring Tom Cruise and Jamie Foxx released back in 2004, collateral refers to a pledge made by a borrower of specific property made in order to secure repayment of a loan and protect the lender against the risk of default.
In this edition of the Merchant Advance Capital "Loans 101" Video Series, our CEO David Gens explains why we do not require collateral in the fashion of traditional lending options - it makes your application process easier and allows us to consider a wider range of applicants.
Click below for the video! If you have any further questions about the Merchant Advance process, feel free to check out our FAQ online or give us a call at .
It's the height of summer and Canadians everywhere are turning their minds to opportunities for leisure. Whether you're escaping the heat or heading for even sunnier climes, the summer months are the perfect time to plan for a vacation or other personal time away from work. But many small business owners often feel like they can’t get away and relax because they’re too preoccupied with what’s going on in the day-to-day of their workplace: the increasing pressure to communicate associated with the mobile, cloud-shared and data-driven environment in which we do business makes it even more challenging to shut down that phone and disappear for a while.
According to a study performed by American alternative lender OnDeck,
- Only 57% of small business owners planned to take a vacation in 2014
- Small business owners take very few vacation days – 61% of those planning a vacation will take just one week off per year
- Most don’t unplug from work while on vacation – 67% check in with work at least once per day. Only 15% will disconnect entirely
How can you take time to relax and rebuild without losing grip on your business confidence? (more…)
Summer is in full swing, and the attention of many Canadians - as well as viewers and visitors from around the world - is turned to Toronto for the Pan Am Games and Parapan Games, which run from the 10th until the 26th of July. As the Games’ sporting spectacle unfolds, it also offers a chance to observe another kind of performance - one in which businesses large and small compete to find advantages, adapt to challenges and pursue new heights in a market environment suddenly and invitingly open to a burst of activity from both domestic and global spectators.
While direct sponsorship of major events like the Games is generally the domain of very large, multinational-scale business interests with the budgets to match (including sponsors like Chevrolet, Cisco and Live Nation), businesses local to the Toronto area and in Canada at large will also compete fiercely for their brands to be represented on the world stage through procurements and contracts in areas ranging from legal services to sponsorship sales, printing, translation, employee recruitment, public relations and more.
Major events can pay off for small businesses in an unofficial capacity as well - often related to an overall boost in consumer activity driven by the desire to visit and participate in something unique. The Games’ relatively short and predefined period of increased consumer traffic has already had significant benefits for Toronto’s accommodations and restaurant sectors, according to a recently released report from Moneris. The report found that overall, consumer spending during the Games’ opening weekend rose 8.42 per cent from the same weekend in 2014.
For your small business to perform like a gold-medallist, you need to take advantage of being able to prepare well in advance when a major event takes place in your area. Athletes take pride in being the sporting ambassadors for their nations: by the same token, how will your business showcase its own array of talents to the world? Whether this means taking on extra inventory to cope with projected increases in demand, developing an ingenious marketing campaign that will get visitors buzzing, or rerouting your logistics around a jump in traffic congestion, a large-scale event allows for the investigation of rare opportunities to try new ideas and optimize business success.
In a decision whose outcome has been highly anticipated in recent weeks, the Bank of Canada announced a cut to its interest rate, lowering the rate by 25 basis points to 0.5%. The news has prompted significant discussion among Canadian economic and political experts, who are analyzing the cut in terms of a variety of potential causes (both at home and abroad) contributing to a trend of slowing economic growth, as well as the potential for a cut to reverse that trend.
While the effects of a rate cut will largely play out on a macro-level scale, it seems prudent to ask: what do this cut, and the broader trend that spurred its implementation, imply for the immediate future of Canadian small business?
It's clear that, odds are your small business - no matter the industry - has a way to bring customers in the door. When they arrive, how will you remember them (and vice versa)? Some of these customers become regulars, maybe even devotees - by what means can you connect with the others so that they do not simply disappear when they walk out of your storefront?
Email is one of the most straightforward ways of accomplishing this goal, and it can help you build a bigger base of returning customer activity with little investment. It's likely that your business process has some way of keeping track of customer information, very often including email. And if it doesn't, there are simple ways of encouraging customers to share their contact information. Read on for our top advice on building (and getting the most out of) your email list.
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