Yvonne Wilchewski didn’t need to post a ‘help wanted’ sign in the window of her business. Instead, the owner of a growing Edmonton gift basket business needed to take one to her bank.
After opening the Bread and Butter Basket Company about a year and a half ago, Wilchewski had been seeking expert advice to help her manage her business’s rapid growth. But she wasn’t having much luck.
“It was like I was too small for them to help,” she says. “Then I was at this business event and I saw this sign at a booth that went something like, ‘Need small business advice? We can help.’ ”
Moreover, Wilchewski could enter a draw at the booth for a chance to win $5,000. It turned out to be a fortuitous decision, and not simply because she won the draw. Wilchewski received an even bigger reward — help. For her, the real prize was the relationship she established with Servus Credit Union, which was running the booth. She met Monica French, one of the credit union’s small business advisers, and they’ve been working closely ever since.
“Up until this point, I had been putting my own money in,” says Wilchewski, whose business creates corporate gift baskets of fresh baked goods. “But I had hit my threshold for personal investment and I had wanted to meet with a financial institution to see if someone could help me put a plan together to grow.”
The help she required was twofold: First Wilchewski needed a loan. But as a longtime mortgage broker, she was wary of the challenges small businesses face securing financing.
“I’d seen many people run into walls with their financial institutions when trying to secure a loan.”
Equally important, however, she needed advice.
It’s a story French has heard time and time again. “Entrepreneurs know they need financing and advice, but they don’t know where to turn.”
The problem is the two go hand-in-hand. Without advice, small business owners might not know what they need to do to secure financing.
Indeed, there’s a lot of prep work involved, French says.
“You need to understand your business inside and out before you even get through the door.”
The first step is developing a good business plan. While French often helps clients understand what makes a strong business plan, she also often recommends they hire an accountant who can help them flesh out the numbers.
Simply put, the business plan is the blueprint of what the business does, and how it will make money. It’s a highly detailed and vital piece of the puzzle that’s needed to secure funding because it demonstrates to lenders how they will be repaid.
With a good plan in place, many small businesses requiring funding usually seek a loan from their financial institution that’s backed by the federal government’s Canada Small Business Financing Program. “It’s like CMHC (Canada Mortgage and Housing Corp.) financing, only for small businesses,” French says.
To that end, the program guarantees up to 85 per cent of a small business loan worth up to $500,000. It’s an important layer of security for lenders who are assured they can get some of their investment back should a venture fail.
And many small businesses do fail in their first few years. According to Industry Canada data, only about half of small businesses survive past five years.
That’s why it’s important for entrepreneurs to get good advice and support, French says. And a small business adviser can certainly help.
“We can assist them with payroll and merchant services decisions, and we can also recommend experts they absolutely need: accountants and lawyers, for instance,” French says.
The help Wilchewski received from French paid off right away.
Originally, she was seeking financing to buy a flower shop to expand the services she offered. But before buying, she asked French to pore over the numbers. “Based on what I saw, she couldn’t achieve her desired goals,” French says.
Wilchewski says the advice saved her from making a costly misstep. Now she is focused on growing her business instead of expanding into new ones. “My goal is to be the best basket business in Edmonton in the next year and the biggest in Alberta over the next five.”
And as her company grows, Wilchewski is confident French and Servus will be there to help.
Credit unions — small business experts
Because credit unions are local entities created to serve their communities, they’re focused on helping small businesses that build wealth and create jobs locally, says Monica French, a small business adviser with Servus Credit Union.
“Our whole goal is providing a full suite of financial services and advice to help small business owners,” she says. “Really, it’s our wheelhouse of strength.”
Furthermore, small business owners who are credit union members often receive competitive rates and flexible loan options because the focus at credit unions is on helping members as much as it is on profitability, she adds.
Stepping stones to success
Here’s a look at the services a small business adviser can provide to growing companies:
At the top of the list for many entrepreneurs is funding, and a financial institution can help budding businesspeople choose the right one. The options include a personal line of credit, a business loan through the Canada Small Business Financing Program, fixed-interest-rate loans with set repayment periods or small business credit lines.
Businesses involve significant financial complexity, requiring owners to set up the right accounts with features such as overdraft to meet the daily demands of running a company. An adviser can guide owners through the ‘ins and outs’ of business banking.
What can be more important to a business than completing a transaction? And these days customers have more ways to pay than ever. It’s vital for small business owners to have merchant services that suit their needs, from e-commerce to credit and debit payments. While many financial institutions don’t directly provide these services, they offer third-party access and facilitate the relationship between the service provider and the small business.
While some small businesses might have just one employee — the owner — others can have anything from a handful to dozens on the payroll. A small business adviser can help pick the right payroll option.