The known unknowns
This blog post has been republished from pvilchez.com with permission from the author. Paul Vilchez is a course ambassador with University of Toronto School of Continuing Studies Certificate in Entrepreneurship program.
If the first week was largely a refresher, the second week of Foundations in Entrepreneurial Management was a crash course in learning just how much you don’t really know. Possibly the easiest way to deal with that deficiency is to reach out to your network of peers, who might have the answers you need (or know someone who does).
Disclaimer: This is a sponsored post on behalf of University of Toronto School of Continuing Studies Certificate in Entrepreneurship program; however, the opinions provided are my own.
Business Spectrum
The first thing we covered was the spectrum of business models, from charities to for-profits.
I haven’t formally decided on a particular structure (and there are many to choose from), but I’ve decided against the non-profit model for a number of reasons.
While I’m largely driven by the potential for social impact, the non-profit structure imposes a lot of overhead from the beginning in terms of human resources, documentation and fees to incorporate.
All told, that structure makes it very difficult to move quickly, which I believe is the biggest advantage a small company has. Furthermore, I believe that it is possible to have social impact as a metric for for-profit corporations—something that is more or less confirmed by the recent introduction of B-Corps as a company model.
Funding
We covered a number of different strategies small businesses use to fund themselves:
- bootstrapping (savings, friends/family)
- debt (bank loans)
- equity (investment)
- fundraising (for example, Kickstarter)
Hamilton Barbell is bootstrapped, with no plans to take on debt or exchange equity for capital. I will say that the appeal of the non-profit structure is that there are currently a lot of government grants available for non-profits tackling youth fitness and obesity. Unfortunately, I don’t feel the overhead work required for these grants is worth the trouble, and so the goal is to get to self-sustaining revenue as quickly as possible by charging for membership and workshops.
I think the hardest part will be to determine fair pricing that will both allow Hamilton Barbell to grow, and also achieve the social goals that spurred its founding.
Legal Presentation
Our guest speaker was a lawyer who had experience in the startup world. He flew through a number of topics, including:
- incorporation
- directors
- contracts
- liability
To be honest, I find the amount of information to keep track of overwhelming. There are so many decisions to be made that are so far removed from the actual business idea itself that it’s basically a meta-business—that is, you’re in the business of running a business.
This reinforces to me that ideas are not nearly as important or valuable as execution, which is a good thing since you’ll need to talk to a lot of people and get their help to be successful.
Ecosystem
It is clear that building an ecosystem is crucial to success. At first it might just include yourself, but your ecosystem can quickly grow to something like:
- you
- customers
- suppliers
- government
- lawyer
- accountant (as early as first discussing company incorporation)
Obviously networking has always been on my radar, but this class really kicked the priority level up a notch. There a few ways I plan to tackle this:
- making use of LinkedIn as a networking tool (you can find me here)
- applying to Futurpreneur’s MoMENTum program
- attending HIVEX, a networking event for young professionals in Hamilton in October
- reaching out to personal friends who are incidentally gym owners here in the city, and who surely have useful insights
Up next
This coming week marks the halfway point in the course. As expected, it is going by quickly!