7Oct
All About Pricing

Your vision is amazing, and your product is great. However, making a great product and selling it are two different things. And without sales, your dreams of becoming a successful entrepreneur won’t go very far. The first step, and one of the most delicate in an effective sales campaign, is to price your product. When it comes to pricing your product, here are a few things to consider:

What is the customer willing to pay for my product?

Pricing the product is not only about you, but also about the customer. Find out what your product is actually worth. You can use surveys and customer research to accurately price your product.

Furthermore, you have to consider your competitors’ pricing. If customers are willing to pay $5 for your product but can get it from your competitor at $4, why should they buy from you? Price your product accordingly, for it to be competitive on the market. If your product is vastly better in quality than your competitors’, you can justify raising the price.

What kind of pricing strategy should I choose?

As the price of your products goes down, you will access a larger market, but will have to increase sales. Consequently, when the price of your product goes up, your market will be much more reserved, but you will have to sell fewer products to make profit. Balance this relationship until you have found your ideal customer base. You can always adjust your prices in order to meet your customers’ needs.

Decide on a pricing strategy. There are two options to choose from: market skimming, or market penetration. Market skimming involves introducing your product onto the market at a high price to account for potentially low initial sales. If your business is new and relatively unknown to the public, this may be a good strategy. As you establish your customer-base and production costs start to decrease, you can begin to lower the price of your product incrementally (i.e. skim the price). However, be sure that you can justify the high price with quality and add-ons (customer service, support, shipping, etc).

How do I want to sell my product?

Consider different options when it comes to selling your product. You can bill your customers with one-time payments, but also with monthly or yearly subscriptions. This will allow you to not only make the sale, but to keep the customer coming back and renewing. Depending on what kind of product or service you are selling, you should consider different payment plans.

Create different options for your customers to buy: three is ideal. You can have a basic, upgraded, and premium option. By doing so, you will attract a larger market by selling your basic version but will still be able to make sales to people who want a little more with your premium option. Consider a computer: you can buy the same brand for $400, $1000, $2000, etc.

Discounts, benefits, bundles.
This is an important step in pricing your product. You need to create some kind of initiative for customers to buy your product. You can do this in different ways:

• Discounts: Discounts are good to attract a boost in sales or new customers, but they should not be overused. If your product can only sell during discounts, there might be something wrong with the product or the pricing.
• Bundles: Again, don’t overuse this. By promoting sales in bundles, your sales will inevitably go up, but your profit per item sold will decrease. Balance your prices and bundle quantities accordingly.
• Benefits: This can work in two ways. You can create some kind of monetary benefit (buy five and get the next one free kind of deal) for your regular buyers in order to secure a solid customer base. The second way, which is a lot harder to achieve, is to create a social benefit. In this case, customers will partly be buying your product for the social status it gives them, and not only for the product itself. Think of expensive watches, cars, etc.
In order to sell your product at a high price, you have to ask yourself: have I given the customer a reason to pay more for my product? In order to sell your product at a competitive rate, you need to bring something that your competition does not offer. This can be clear differences or perceived differences. Let’s say you are selling coffee for example: if your coffee is simply better than anything else on the market, this is a clear difference that will allow you to raise your price. If, however, your coffee is average but has a fair-trade policy as well as an environmental one, this is a perceived difference.
Remember that once your pricing is done, it is not set forever. You will often have to change your prices due to competitors, supply and demand factors, and discounts. Do your research, evaluate your product, and set a price!

30Sep
Angel Investors

Sometimes, big venture capital firms are not the answer to funding your start-up. A good alternative is angel investors.

Angel investors are usually wealthy individuals who want to invest in a start-up with their own money in exchange for convertible debt or ownership equality. Contrary to popular belief, angel investors are not that hard to find. Here are a few places where you can start your search:

Your personal network. An angel investor can be anyone with enough money to be able to believe and invest in your start-up. Ask your friends, family members, or other connections: maybe they happen to know such a person.
Attend events such as the International Start-Up Festival, where angel investors can often be found. The goal of these kinds of events is to facilitate the connection between entrepreneurs and angel investors. Make sure to print out some business cards and rehearse your elevator pitch!
Browse online directories to find angel investors near you. The biggest and most important directory of angel investors is AngelList. With the growth of the Internet, angel investors are now easy to find: check out some local sites like Anges Quebec, and connect with an investor you are interested in.

You may be wondering why you would want to trust an angel investor? Although they are individuals rather than firms or banks, angel investors do have their benefits:

If your Startup is not in the Tech industry, a VC investor will be hard to find. Angel investors however, tend to invest in many different verticals, so you can broaden your start-ups financial access.
The selection process and due diligence is done relatively fast, so you can expect your money to arrive quickly. Also, it will most likely arrive in one large payment, as opposed to meeting certain benchmarks for installments to be made.
Angels can be more accessible when larger firms: since you are dealing with an individual, it is easier to build a connection and see what they are interested in. Remember they can be living a block away from you!
Angel investors are more likely to take big risks: as they either have experience with entrepreneurship or have a personal relationship with you. They understand the implied risks and will not constrain you as much as financial institutions would.

Sounds like a good deal, right? However, despite their benefits, angel investors also have disadvantages:

As they take a lot of risk and invest personal money, angel investors expect a very high rate of return, sometimes over 25%.
Since they are investing their own money into your start-up, angel investors will want to be kept informed of all of your company’s actions and decisions. You investor may also feel entitled and will want to take an active role in your start-up’s decision making process.
Your investor’s money is not a loan, so you don’t have to repay it. Although this could also be an advantage, it will lead you to lose money if your start-up is extremely successful. You will have to give your angel an equity for the deal, which could add up to a lot of money in the long run.

Angel investors are good alternative if you can’t, or simply don’t want to deal with big venture capital firms. However, make sure you pick your angel investor wisely, and consider all aspects and consequences of the deal before you make a decision. Remember that although angel investors seem like a sweet deal, it may lead you to losing money or losing control of your start-up in the long run. As always, do your research.

22Sep
Incorporating a Business in Quebec

Incorporating

Incorporating a business is usually highly advantageous for entrepreneurs, but can be a long and complicated process. When a business is incorporated, it becomes legally separate from its owners, and can act independently from them. According to the Entrepreneur website, incorporating a company provides the company with most of the legal rights granted to individuals, with the exception of voting rights.

The biggest advantage of incorporating a business is the limited liability that it brings to the owners. Once a business is incorporated, it becomes a separate legal entity. Any debt that it has or any outstanding loans are the responsibility of the company itself, not its owners. If the company goes bankrupt, the individual finances of the owners are not affected, and any claims against the assets of a corporation are not the responsibility of its shareholders.

However, incorporation comes with enormous amounts of paperwork that, although it is a separate legal entity, the company can’t fill out itself. Owners must constantly document all major activities and transactions made by the corporation. Filing these documents becomes a lot more complicated once the company is incorporated.

In every Canadian province, the laws concerning business incorporation are different. However, you may choose to incorporate under the federal jurisdiction or under a provincial jurisdiction. As a general rule, if your company is active in only one province, incorporate provincially. If it is active in more than one province, incorporate federally. Incorporating provincially is less expensive, but usually takes a lot more time, and has a weaker name protection policy. Furthermore, you will only have to file one set of annual corporate fillings, while you will have to file two on the federal level, making things a little more complicated. Some provinces have unique rules: for example, Quebec is the only Canadian province that has no residency requirements for Directors. In Quebec, here are the steps to incorporating your business:

Establish the name of your business

If you decide to name your business, the process of incorporation will be longer and more demanding. Provincial laws dictate that the company name be French, but is allowed to have an English version. However, the English version must be a direct translation. You can also number your company: the government will automatically select a number for you, which will greatly speed up the process.

Designate your head office and company leaders

The company must have a residential or commercial address in Quebec. If it does not, you may have to consider getting a Virtual Office. After your address is set, you must provide the Director of the company, along with his or her personal details: this personal does not necessarily have to be a Canadian citizen. The company must also have officers: the government of Quebec requires each company to appoint a President and a Secretary. Finally you must provide the government with the names and addresses of the shareholders of your company: each company must have between 1 and 50 shareholders.

Structure your business

You need to provide the government with the number of employees that you have as well as with all of your company’s business activities. Furthermore, all companies must determine, at the time of incorporation, their capital stock structure, restrictions on stock transfer, and limitations on business activities.

Incorporating your business has many advantages, but it must be done right. Before incorporating, consider speaking to a legal expert to make sure you meet of the criteria and that your business is ready for that next step.

17Sep
Processus de demande du fonds promontreal entrepreneurs

16Sep
ProMontreal Entrepreneurs Application Process

9Sep
Tips for Getting Into PME

PME tips Accelerator

Tip 1: Apply early

We start reviewing applications on a rolling basis as soon as the application window opens. More than half of the applications come in on the last day. If you want us to spend more time on your application, get it in early. We get a lot of funding applications, so this is your chance to stand out. If you wait until the last minute, our review of your file will also be last-minute, and there will be no edits.

Tip 2: Put effort into your application and give as much detail as possible

The fact that we are a social business does not mean that we are not a serious program. Review your application before submitting it, and make sure it is complete. Don’t assume that you can submit a poor application with missing documents and then send us the rest in a few weeks.

Tip 3: Come prepared

You need to convey who you are, why your business is interesting, and be prepared for us to dig into everything from your unit economics and customer acquisition strategies to long-term plans and where you met your co-founders. Make sure you prepare your file and have all of the required documents when you come to your meeting. Arrive on time to your meeting with all the required documents, and be professional.

Tip 4: Research the program

Make sure that PME is right for you, and that you are right for PME. Know what our terms are, know how we work, and come prepared to tell us what you want from PME. Read about our selection criteria and about the requirements you need in order to be eligible. Do not apply if you did not read the criteria, or if you do not meet some of them: we will not make exceptions. Make contact with our funded entrepreneurs to find out how PME has worked for them, and see if you can benefit in the same way.

Tip 5: Tell us what you’ve learned

The most important skill you can have is the ability to adapt quickly. Tell us what you’ve learned. What were you wrong about? What’s your unfair advantage? Describe what you have done since the launch of your start-up, and what you have learned about the industry and entrepreneurship in general. Show us that you have grown as an entrepreneur, and explain to us why you are ready for funding.

Tip 6:Tell us your vision (why you are doing this?) and how you’ll grow

Where are your customers? How will you reach them? Tell us what you’ve done. Unscalable growth is fine (and reflects hustle), but ultimately we’ll need to see a path to scalability. Explain to us how you intend to grow, how you will market your product and sell it, how you will target new markets and expand your customer base, and how you will innovate and further develop your product. You need to convey a realistic long-term plan to make your business credible.

Tip 7: Make sure we understand your traction

You must be able to prove that your start-up is growing and has made significant progress so far. By providing factual growth evidence such as sales records, you are reducing the risk that comes with the investment, improving your chances of getting into PME. Traction can also be proved by the amount of active users, or the amount of views on your website. As we cannot simply fund ideas, you must be able to show that your business has already attracted customers and that your product can sell.

I hope this is helpful. We’re grateful for all the amazing companies we received applications from. Application is open NOW, so apply here. And good luck!

2Sep
VC Funding 101

Your business idea is great, but you are still having trouble getting funded by a venture capital investors. When funding businesses, VCs look for certain characteristics, to ensure that they make a return and that they minimize their risk. Here are some of the criteria VC’s look for:

Market Size

One of the most important things that VCs consider is market size. If your business only has operational potential in a certain neighborhood, you will have trouble finding a VC: your idea needs to be global, or at least be a part of a massive addressable market. For example, if you own a local sushi shop, you will have trouble finding VC funding, as your idea does not address a global market for fish and rice.

Scalability

If your market size is large enough, the next thing to consider is the scalability of your business. Very often, VCs look for businesses that have a large growth potential. This means that once your product is developed, manufacturing should be relatively inexpensive and barriers for distribution should be minimal. If your product is cheap and can sell easily, you have more chances to attract VCs.

Time Horizon

You will need to show your investor that you will be able to grow your business substantially in a given number of years. Each investor has a different time criteria, but expects a good return after a given amount of time. This is why it’s crucial to have a good and well-founded understanding of your profit projections.

Team

Your team plays a crucial role in determining if you will get funded by a VC. Since your start-up is still in its early stages, chances are that your product and your market fit is less than perfect, and will have to adjust overtime based on customer needs and other different factors. Due to this uncertainty, VCs prefer to bet on the team rather than the start-up, as it is the factor that is the less likely to chance. Make sure your team is skilled, motivated, and willing to evolve with your start-up.

If your business does not meet these criteria, it does not mean it is wrong. You will simply have to look elsewhere for funding, as you will have a hard time with VCs. You can look for other kinds of investors or consider debt financing. Remember that not all VC firms are the same, and they all have different criteria and interests. VC funds are always picky about the start-ups they invest in, and you should be too. Before applying for a fund, do your research: find out what kind of start-ups the VC usually funds, what they are known for and how they can make your business grow. This will improve your chances of getting funded, and will help you find an investor that can truly be helpful for your start-up.

10Aug
How to Approach a VC Firm

VC firms are a great way to help launch and finance your startup. If you are unsure about how to approach a VC firm, here are a few tips:

1) Find a connection/advocate
The best way to create initial contact with a VC firm is by getting an introduction. You can get referred by an entrepreneurship program such as ProMontreal Entrepreneurs, or simply be introduced by a friend or colleague.

2) Never send in your business plan
The VC firm will not read your 40-page business plan over email. Instead, once you’ve secured a meeting bring your pitch deck to the firm. If they want to know more about your business, that’s when bring out the business plan.

3) Don’t cold call, especially if you’re not ready
If you cold call a VC firm without having been introduced, you run the chances of a) not getting your call returned and b) your chances of getting a deal are close to zero. Furthermore, don’t rush to approach a VC: make sure you are ready. If your start-up is not ready and you make contact with the VC firm, you have missed your opportunity of the first impression and possibly ruined your chances of making a deal with this firm. Remember VC firms, get pitch ALL the time. Make your chance count!

4) Do your research
Yes, this point seems to appear in every single blog post, but research is important. Research the firm itself, to find out the services they offer and to make sure your start-up would be of interest to them. Furthermore, talk to companies that have already been financed by that firm in order to see what kind of experience they have had. Don’t blindly accept the first deal that comes your way. Make sure that the VC firm you approach has the connections you need to make your start-up grow.

27Jul
All About Idea Generation

Before you start thinking about sales and investors, you need an idea. You can’t start a business without an idea. However, finding an idea that would successfully launch a start-up is often easier said than done. Consider these tips:

Brainstorm

Again, this is easier said than done. Start by listing all of the things that interest you, as well as things you are good at. Also, ask yourself why you even want to start a business in the first place. This list doesn’t have to make sense: it is meant to make you think about your strengths and weaknesses, and how you could use them in your start-up. If your idea is something you are passionate about, chances are you will be successful.

You should also consider your financial situation, and know how much money you can afford to invest in your business, as this may influence your start-up ideas. Don’t start a business relying solely on investors: be prepared to use some of your own money as well.

Fill a Need

Think about your own life, and how you can make it better. You can think of small improvements or big ones. Ask yourself: how could my life be better as a father, mother, husband, wife, grandparent, etc.?

Look for inspiration in the outside world. Whenever you go out, think about how you can make it better. If you are thinking it, chances are you are not the only one, and your idea can fuel a start-up. Here is a good example: Reed Hastings once got charged 40$ of late-fees while returning a DVD. Instead of simply paying the fee and moving on with his life, he thought about how he could make this small aspect of his life better: and that’s how Netflix was born.

Think about the long-term

Get inspired by everything around you, but don’t forget to consider your business idea’s potential in the long run. Think about current market needs, trends, and demographics that are ever-changing and could impact your business idea. You can use the media to constantly stay connected to market trends.

You should also consider competitors when you search for an idea. Sure, every business has competitors, but you shouldn’t be wasting all of your money in a pricing war. Use something with minimal competition so you can invest money on growing your business instead of competition.

Above all, your idea is about you: your strengths, weaknesses, and interests. If you choose an idea you don’t care about, it will be harder to stay inspired and make it successful. Don’t forget that once you found your idea, protect it: use non-disclosure agreements, trademarks, and patents, to keep your idea to yourself.

Wherever you go, keep looking for inspiration: you never know when you will find the idea that will start a successful new business.

10Jul
International Startup Festival

Montreal is a city starting to get known for encouraging start-ups and providing them with the right conditions to grow. For the past four years, Montreal hosts the International Start-Up Festival, that brings together investors, start-ups, and analysts from more than twelve different countries. Yes, this is an amazing opportunity, but the ticket price of $500 might give you cold feet. It’s worth it though. Below are a few reasons on why you should attend the International Start-Up Festival.

Networking

The festival hosts a multitude of different people from the entrepreneurship world. First off, there are the investors. If you are looking for funding, or simply want to connect with powerful people from the business world, this is the place to be. You will be able to meet representatives from a multitude of VC firms, as well as angel investors, depending on what you are looking for. If you are too shy to directly go up and talk to an investor, you can attend one of the festival’s many cocktail networking events, designed especially for that purpose.

Not looking for money? No problem. If you are searching for a co-founder, there is no better place. With hundreds of entrepreneurs on the site, your chances of finding a partner are higher than ever. Alternatively, you can meet and connect with different incubators, and perhaps find yourself a nice new workplace.

Education

Entrepreneurship is not easy. Do you have trouble gaining traction, finding the right market for your company, getting funding, or virtually any other issue related to start-ups? The International Start-up Festival provides great keynotes and presentations every day, with speakers such as Terry Jones and David Segal. Whether you need inspiration or information, you are sure to find a presentation that will be of interest to you.

By networking with other entrepreneurs and investors, you will also be able to discuss some of your ideas and get feedback or suggestions. Anywhere you go, you will learn something that will help you grow your start-up. If you don’t, you’re probably spending too much time partying.

Media

With media passes already sold out for this event, you can expect a full coverage from a multitude of different media organizations. Mingle with reporters and get your start-up featured in the media: you direct a large amount of attention to your start-up, and gain more customers.

ProMontreal Entrepreneurs, is a Patrons of the festival, and sponsors a starving start-up to attend, because we have seen first hand what attending the festival could mean for a start-up. If you are attending, come say hi!

This type of event is very beneficial for Montreal, as it brings international attention to the city and its start-ups. As an entrepreneur, you will be able to make priceless connections that are very hard to get outside of the festival. Attend as much keynotes as you can, but don’t forget to have a good time!