7Mar
The Link Between Poverty and Entrepreneurship

Often overlooked in discussions about economic development, entrepreneurship and business activity play a vital role in promoting growth. Entrepreneurship and startups have the potential to play a significant role in poverty reduction. Startups can help to lift people out of poverty and promote long-term development by creating jobs and stimulating economic growth. According to the worldwide Entrepreneurship Monitor, small and medium-sized businesses (SMEs) make up more than 90% of all businesses and more than half of worldwide employment. Startups can help relieve poverty through providing underprivileged individuals access to financial services

China’s remarkable story of lifting approximately 600 million people out of poverty since the late 1970s, following Deng Xiaoping’s market reforms, underscores the transformative potential of entrepreneurial ventures. Today, the idea of entrepreneurship resonates more than ever among the young generation, many of whom now aspire to start their own businesses.

In regions like Quebec, learning about entrepreneurship often occurs outside the formal school curriculum. However, a shift is noticeable in many economies that have recognized entrepreneurship as an effective strategy for poverty alleviation. Despite the challenges of financial scarcity, entrepreneurial initiatives can often achieve remarkable results with limited resources.

Developing Economies

Entrepreneurship not only uplifts individuals but also significantly contributes to economic development. It is a potent tool for poverty alleviation. Traditional jobs hinge on a country’s overall economic stability and access to higher education. But in many developing countries, quality education may not be accessible, and a fragile economy might not support traditional job growth. Entrepreneurship transcends these obstacles, offering opportunities for personal growth without the prerequisite of formal degrees.

Industrialized and Emerging Economies

Industrialized and emerging economies are increasingly acknowledging the value of entrepreneurship. With unemployment on the rise since 2001, European Union governments have launched various initiatives, providing entrepreneurs with education, advice, infrastructure, and funding. These efforts aim to foster a conducive environment for entrepreneurship. According to the European Commission, these measures have already shown signs of success, helping young people transition out of unemployment while creating economic value.

International Organizations

Major international organizations endorse entrepreneurship as a powerful tool to alleviate poverty and reduce unemployment. The World Economic Forum has long emphasized entrepreneurship’s importance, implementing programs to foster entrepreneurial spirit worldwide. According to the World Economic Forum, small and medium-sized enterprises in countries like France and the United States have significantly contributed to growth and employment generation.

Role of Charities

While charities provide essential short-term support to impoverished regions, they can inadvertently hinder long-term development by creating dependency. An entrepreneurial approach, on the other hand, promotes self-sufficiency. For instance, sending used clothes to needy countries is a well-intentioned act, but it may inadvertently discourage local entrepreneurship in the textile industry.

However, supporting entrepreneurship in developing economies requires more than just individual initiative. There are fundamental gaps in skills, capital, infrastructure, and regulation that often stymie entrepreneurial success. Reliable infrastructure is critical – an entrepreneur can hardly operate a factory without dependable electricity. Here lies a potential new focus for charitable organizations: investing in infrastructure, capital, and skills development, they can foster an entrepreneurial environment that promotes long-term growth and self-reliance.

Traditional charity models, while generous, can inadvertently encourage dependency. A shift towards supporting entrepreneurship can stimulate social change and help eradicate poverty. Thus, charities should transition from providing immediate relief to building an entrepreneurial climate that encourages self-sufficiency, resilience, and prosperity.

31Jul
The PME Recruitment and Talent Retention Guide

talent, recruitment, guide

Whether your start-up started off as a solo project or with a co-founder, there will come a time where you will have to hire other employees to support your operations. ProMontreal Entrepreneurs` (PME) has created a Recruitment and Talent Retention Guide in order to help you with this difficult and important step in the life of your start-up. Here is just a snippet on the important matters the guide will address. If you would like to download a free copy of the full version of the guide click here.

Pay attention for cultural fit

Of course, having tangible skills and expertise is necessary. However, your potential employees must fit in with your work culture. Asking the right questions that will bring out your candidate’s personality is key. Here are just a few behavioral and situational questions that are crucial to include in your hiring process:

Can you tell me about a past experience where you had to take charge?
Name a time you failed and how you handled it.
Have you ever dealt with a company policy you weren’t in agreement with? How?

Test skill not credential-

Don’t shy away from hiring new university graduates. Because they are just entering the workplace they are motivated, and more importantly, they are coachable. Coaching employees means investing in helping them work smarter instead of harder. You may be asking yourself “what if we train them and they leave?” This is a risky train of thought. What you should be asking yourself is “what if we don’t and they stay?”

Look for passion-

Passionate employees will go through the hurdles with you. Working at a start-up can come with having to go through uncomfortable and unexpected changes. Therefore, it requires much teamwork. You want someone that will be as motivated as those they are working with, not someone that requires to be motivated by others.

Hire Slow and Fire Fast-

You will be more thankful in the long-run when you’ve hired the right people carefully, and let go of unnecessary baggage quickly. As stressful as times may seem, and as urgent as matters may be, remember that your resources are valuable, and so is your time.

This is just a glimpse of what you will learn from reading our Recruitment and Talent Retention Guide. Your employees are one of your biggest investments. They not only work in order to attain company objectives, they are a representation of your business. Having the right people by your side goes a long way.

18Apr
The Challenges of Being a Social Entrepreneur

Let’s start off by addressing that being an entrepreneur is difficult. However, being a social entrepreneur brings about its own set of challenges and obstacles. It combines social impact with sustainable business growth. Social entrepreneurs are faced with having to solve or alleviate a real-world issue while also maintaining positive financial performance. . Here are the two main challenges social entrepreneurs face. Though considered challenges, many have overcome them in the past.

1. Competing on prices while having enough money to make a social impact
In order to remain competitive, social enterprises need to take advantage of creative pricing strategies. Social entrepreneurs need to establish a pricing strategy that will consider price point, allowing for enough revenue to serve their chosen cause, without compromising their customers’ expectation of their product. Though social enterprises have to overcome additional challenges when pricing, they can use original pricing techniques that are not as readily available to other start-ups. Social entrepreneurs should strategically highlight their cause and mission. Socially conscious consumers who agree with this mission will be willing to purchase at a higher price point in order to support the cause. Furthermore, bundling will incentivize sales. Shoe company, Toms, has made great use of this. For every shoe sold, a pair is donated someone in need. In order to build and grow brand equity, social entrepreneurs should also look into certification. For instance, being certified as fair trade, or B Corp will help maintain a positive reputation and better positioning.

2. Quantifying your impact
Measuring impact for social entrepreneurs can be complex. Not only do you have to establish metrics for your business performance, you have to measure your social impact to prove credibility, as well as attract investors and potential business partners. Impact investments are investments that not only yield financial return, but social and environmental return as well. With the rise of the number of social enterprises, credible organizations have developed frameworks to standardize the calculation of social impact. The IRIS Framework consists of an organization’s description, product description, financial performance, operational impact, and product impact. If your mission is to have impact on a global scale, The Global Impact Investing Ratings System (GIIRS) gathers a range of information with regards to company’s work, size, sector, and region. These assessments are carried out annually and validated by the GIIRS.
Many resources are available to Montrealers looking to take a step into social enterprise. Luckily, numerous grants, and funding opportunities are available, that do not require giving away equity or paying back an investor. YES Montreal, Futurpreneur, Quartier de l’Innovation and PMEMTL all offer workshops and/or grant opportunities for social enterprises in the city, just to name a few.

With millennials harnessing the wave of activism and social awareness, social entrepreneurship has risen for the past decade. They are working towards incubating ground-breaking innovations, alleviating life-threatening issues, and pioneering some of the future’s most resourceful projects. While it is true that many obstacles can interfere with business operations, the key is taking advantage of the resources available your given city and finding creative ways of overcoming these challenges.

18Feb
How to Read an Income Statement

financials

For many new in the business world, reading an income statement can be a confusing and intimidating experience. However if you know where to look you will realize that it is not as intimidating as it may appear. Understanding an income statement is a very important skill to have for entrepreneurs as it aids with making sound business decisions. Basically, an income statement tells you how much money came into your company during a specific period, how much a business spent in order to generate income, and how much profit a business has after having paid all expenses. Here are a few points that will make income statements easier to understand.

Income statements cover a period of time

Before you delve into reading the income statement, make sure to take note of the specific time period covered. Questions you should be able to answer for the said period include: What are the revenues of the company during the period? Have the revenues increased or decreased over the last few periods? What are the various components of cost? How profitable was the company during this period? What are the earnings attributable to a share or the Earnings per Share?

Income statements follow a simple formula

Income statements may have slight variations, depending on the company. However, they all possess the same data. Essentially, total revenue, total expenses, and net income (Total revenue-total expenses= Net income). Additional information is simply added in order to give the reader a more detailed depiction of financial status.

Don’t let the jargon throw you off

What can make income statements difficult to understand is wording. Keep in mind that businesses can use different words to describe the same concept. For instance, the term “sale” or “income” can be used instead of “revenue”. The word “expenses” can be used instead “costs.” “Profits” and “net income” are also interchangeable.

Expenses are often split into different parts

Expenses tend to be broken down into components. Cost of Goods Sold is the direct cost attributable to goods sold. Selling, General and Administrative Expenses combines payroll costs, except for what has been included in labour costs. Depreciation and amortization are charges with regards to fixed and intangible assets that have been capitalized on the balance sheet over time. Sales & marketing, as well as Research & Development costs are also almost always included in income statements.

Keep an eye for cash flow

Comparing an income statement to a cash flow statement is highly recommended. The reason for this is to see if the profits earned are supported by the cash coming into the company. High profits on an income statement paired with low cash flow can imply weak quality of earnings. Know your key drivers and manage them. Keep a careful eye on areas that affect cash flow: accounts receivable collections and inventory turnover. How are you doing compared to past performance and your peers? Watch key areas that affect profits, net and gross margins, labor and fixed asset utilization. Though this is more acceptable with start-ups since they likely have to make substantial inventory investment before collecting from customers, this is something that should improve over time.

Take note of the profit margin and earnings per share

The profit margin will give you an indication of the percentage of revenue that is left for shareholders after expenses are paid. Earnings per share will tell you the portion of earnings you would be entitled to if you owned one share.

Income statements can be very intimidating if you are a first-time business owner. If you are an entrepreneur needing help with your financial statements, remember that some aspects of running a business are not worth saving money on. There’s no need to turn yourself into a CPA, but you must be able to read financial statements, talk with better qualified financial people and assess your company’s performance.This will lower your stress level and get the job done efficiently.

13Dec
6 Tips for Reading an Income Statement

The income statement is one of three financial statements that you need to become familiar with (the other two are balance sheet and cash flow statement). Understanding an income statement is essential in order to analyze the profitability and future growth of your business however reading an income statement can be intimidating to many people. Especially, if you’re at the early stage of starting your first business. To make the process slightly easier for you, here are 6 tips you should consider while looking over any income statement. It may not be as difficult or as confusing as you think it is.

1. Every income statement follows a simple formula
There is one formula that every single income statements follows:
Revenue- Expenses= Profit.

2. Income statements cover a period of time
The income statement will inform you of the amount your business has made over some time. usually, The statement will represent how much was made over a month, a quarter or a year. The “year-to-date” reflects business activity since January 1 to the present date (usually end of month).

3. Multiple names for one item cause complexity
Don’t let the financial jargon throw you off. Confusion can stem from the vocabulary used in in statements. People can use different terms to describe the same things. For instance, the words “sales” and “income” can be used interchangeably, as opposed to revenue. The term “profit” can be used instead of “net income”. “Expenses” are sometimes called “net income”.

4. The breakdown
Often times, expenses are split into multiple parts. Furthermore, profit is calculated at interim levels. For example, expenses will often be broken down into revenues, cost of goods sold, gross margin, selling, general and administrative (SG&A), and profit. Cost of goods sold are costs directly related to the products sold. Materials bought to make a product fits within this category. SG&A are costs not directly related to the making of the sold good. For example, salaries and office supplies are calculated for this.

5. Gross margin percent should be relatively constant
Gross margin is revenues less cost of goods sold. Also referred to as gross profit, gross margin is the money you receive from the products and services you sell, minus what it cost you to deliver them. It is essential because that the cost of goods sold move with revenue. The gross margin percentage is your gross margin divided by revenue. It should remain relatively constant over time. Any dramatic change with this regard should be seen as a red flag.

6. Dollars spent on SG&A should be relatively constant
Any significant and abrupt change in SG&A should be considered as alarming. It should remain constant overtime, and all dramatic and unjustifiable change should be looked into.

Understanding how to read an income statement is important, as it summarizes the overall financial health of your business. Not only is it simple once broken down, there are also many tools available online for you to deepen your knowledge on the matter.

19Oct
Businesses You Didn’t Know PME Helped Propel

Over the past 18 years PME has helped guide many diverse businesses to success. Often, entrepreneurs come to us with just an outline of what they aim to achieve. With added assistance from our program leaders, mentors, and committee members, we are able to turn this vision into reality. Here are just a few notable mentions of companies that have been able to turn ideas into lucrative business opportunities with help from PME.

Budge Studios
Not only do they have millions of downloads for their games, they have become members of the PME committee. The mission of Budge Studios is to thrill, educate, and entertain children around the world through creative and innovative apps. They have won numerous notable awards for their accomplishments. This includes the Google Play ‘Best of 2016’ App Selection Award for their app, My Little Pony: Harmony Quest. Additionally, they won the Apple Store Best of 2016 for Miss Hollywood Vacation Canada. Budge Studios may be in the business of creating games but their business strategy and objective is rigid and direct. It’s all about being family friendly and universally playable.

Naked and Famous Denim
Naked and Famous Jeans has come a long way since we first met Brandon Svarc. Simply put, the company focuses on one thing only. As they so eloquently state: “No marketing, no washes, no pre-distressing, no nonsense. Just excellent denim at a reasonable price.” Naked and Famous Jeans uses Japanese selvedge denim which is woven slowly and painstakingly on old shuttle looms. Svarc travels to Japan numerous times a year to find new fabrics, and denim mills. Nicknamed the Willy Wonka of denim, he has been interviewed by popular publications such as GQ to share knowledge about his expertise. With all their products made and sewn in Canada,their sole purpose is to sell the highest level of quality to their end-user.

Copower
CoPower is where impact investment meets Wall Street. We met founders David Berliner, Larry Markowitz and Raphael Bouskila in 2013. Since then, CoPower has continued to strive and make the world a greener and more sustainable place. CoPower’s team works with clean energy firms to identify clean energy and energy efficient projects that generate steady and predictable revenue streams. CoPower is all about impact investing. For those of you who are unsure of what this is, impact investing is a strategy that involves the investing in companies and projects with the intention of generating measurable, positive, and environmental benefits alongside financial returns.

Revols
Not only are Navi and Daniel kick-ass entrepreneurs, but did you know they had the biggest kickstarter campaign in Canadian history? Revols has come a long way since its founding in 2014. Navi and Daniel were endlessly frustrated with finding the perfect pair of earphones. While they understood that ears are as unique as fingerprints, all custom-fit earphones came with a high price-point and long wait times. The dynamic duo decided to take matters into their own hands and create Revols: a pair of wireless customized earphones that provide the same comfort and sound benefits as traditional custom-fits, at a fraction of the cost and time.

All in all, PME has had some pretty driven, and ambitious entrepreneurs come through its doors. This is just a glimpse of many of our success stories. We provide them with the most essential tools entrepreneurs need in order to succeed.

4Sep
Reflecting on the Past 18 years

Rosh Hashanah is a time for reflecting on the past, and anticipating what is to come. As this year is ProMontreal Entrepreneurs (PME)’s 18^th anniversary, this Rosh Hashana is rather special. PME has come a long way since 1999. What started off as a small initiative to support Montreal-based businesses, has become a community movement that has much to be proud of. Over the years, the PME program has helped countless people scale their businesses, receive business training and coaching and connect to investors and mentors. Through our PME fund, we have helped propel and create over 71 startups that have created over 800 jobs and have an estimated value of over 45 million dollars.

Without question, making PME a success takes a village. Thankfully for us, the village behind our success is one of support and unity. As a matter of fact, one of our greatest assets is our PME committee, comprised of a dedicated group of community leaders working to help our entrepreneurs reach higher levels of success. Along with our group of accomplished and knowledgeable mentors, the committee assists our entrepreneurs in solving the short term and long-term problems of their businesses. The bond built between all parties affiliated with PME reinforces the values of education and community.

Though the past 18 years have given us much to be proud of, we equally look forward to new beginnings. As PME expands and branches out into new endeavors, this will be another year of new challenges and accomplishments. In order to further reinforce PME’s mission of helping young entrepreneurs, we hope to develop new ways of collaborating with diverse entrepreneurs by helping them ignite their business ideas.

All in all, while we will continue to bring life into business in this coming year, we wish all members of the Jewish community a shana tova!

27Aug
Taglit’s Startup Innovation Center

In its short history, Israel has managed to become one of the world’s few startup capitals. It has become the startup nation with the third most companies listed on NASDAQ. Given Israel’s population of 9 million, various internal and external conflicts, and lack of natural resources, it has accomplished what most would consider to be impossible. Tel Aviv has built a reputation that reflects more than its beautiful beaches. Just go visit Taglit’s Innovation Center to see exactly what we are talking about.

The Innovation Center at the heart of Tel Aviv aims to display new advancements of Israeli Start-Ups in different fields. In collaboration with the Tel Aviv Stock Exchange, Taglit-Birthright built the “State of Mind” Innovation Center. It provides an opportunity to talk about the fact that this sliver of land has over 4,000 operating startups. Visitors can learn about Israel as an international leader in technology, engineering, and philanthropy. More specifically, ground-breaking inventions for agriculture, medicine, transportation, security, and outer space are displayed. What is unique about the Innovation Center is that it emboldens user interaction. The center puts up touch screens, tutorials and prototypes, allowing for visitors to explore and understand various innovations. This way people can understand exactly why the country is deserving of its “Startup Nation” title.

Each Taglit-Birthright group that visits the Innovation Center begins by exploring the interactive exhibition, and continues with a meet-up with a Ieading Israeli entrepreneur. Here are the names of just a few start-ups displayed at the Innovation Center that is destined to make revolutionary impact.

Electroad: This technology uses energy from the road to power electric vehicles using that road. Copper chains are inserted into grooves in the asphalt, then connected to a power converter on the side of the road that links to the city’s electric grid. This will revolutionize transport.
Pillcam: A tiny camera in a capsule. After the patient swallows the capsule, the camera can reveal any abnormalities and supplies essential medical diagnosis. A tiny wireless camera contained in an easy-to-swallow and disposable capsule about the size of a vitamin pill transmits images as it travels through the human body. This inventions makes excruciating exams, such as colonoscopies, much more endurable.
Skyfi: It is the world’s most advanced nanosatellite with larger cover area and bandwidth. This allows for better connection between more people, allowing us to become part of a global village. Basically, this is a much cheaper way of spreading internet globally.

Each startup begins with a need. Taglit Birthright had an unmet need to show groups the innovation side of Israel; and thus the center was born. The center was originally intended for Taglit participants, but curiosity and interest arose quickly. Now the center also hosts governmental and business delegations from all over the world, a variety of private and group tourist organizations, and all kinds of people who want a glimpse into the Israeli innovation scene.

Former Prime Minister Golda Meir famously said the God had made a mistake in sending the Jews to the only country in the Middle East with no oil. While it is true that oil may have made things easier, lack thereof has, without a doubt, forced Israel to find new and innovative ways to survive and transcend all expectations.

9Feb
The Importance of Brand Building

As Jeff Bezos so eloquently said, “Your brand is what people say about you when you’re not in the room.” The statement seems straightforward. But the process of building your brand is the difficult part. As an entrepreneur, you should commit to building a brand identity that resonates with your target market. So many people forget that businesses, especially those that are B2C, must have and portray a brand identity that will be the foundation of all future marketing initiatives. There are essentially 3 ways to build a brand: creating brand elements, secondary associations and marketing programs. However, before you start pouring your heart into your marketing strategy, take a moment and devise a market research plan. Investing in thorough market research is the only way to brand successfully.

How does an entrepreneur build a brand that will resonate with my customers? Though large corporations have more resources to create and develop a brand identity and conduct appropriate research, the process is practically the same. There are 6 steps to the marketing research process (click on the hyperlink for more details). (1) Defining the objective and problem (2) Determining research design (3) Designing and preparing the research instruments (4) Sampling and collecting data (5) Analyzing data and (6) Visualizing and communicating results. Though this seems complex, the hassle is definitely worth the effort. Following these steps, by conducting quantitative and qualitative research, will let you get to know your customers and their expectations of you. This implies conducting surveys, looking into credible secondary data, running focus groups, conducting interviews, testing for brand recognition, testing for recall, and associations. The goal is to know your customer enough to develop a brand identity that will appeal to them, compared to that of the competition.

If you don’t present your brand identity to the right people in the right manner, you missed the opportunity to acquire them. This will be time consuming and costly to reverse the associations people have already made with your brand. This is not to say that you can’t change your brand identity in the future. To the contrary, many successful companies have had to make brand-related changes in order to remain relevant over time. For instance, Victoria’s Secret was rebranded countless times before their angel wings took over retail, Apple nearly went bankrupt before becoming a staple in tech, and UPS used to be big and boring before it became personal and innovative. But, changing your brand image is costly and takes time. Keep in mind that you are a start-up, and will likely have a limited budget. Doing it right early on, will save you money, time and stress.

Whether you are an established business or start-up, there really only is one way to start off the branding process, and that is through market research and knowing exactly who you are targeting. We can’t stress this enough. Get to really know your customer early on. Drafting a brand narrative is strongly recommended. The objective of marketing is to create a lasting relationship, called customer retention, with the customer after the actual transaction has been made . You will only be able to do this once you’ve identified your customer’s problem, their expectations, and built a brand identity that they value.

12Jan
When to Say “No” to an Investment Offer

startup, investment, VC, venture capital Finding an investor is challenging. So it is understandable that when you are ready to start accepting term sheets that you would be tempting to accept your first offer after having reached out to countless investors. Though lack of financing can cause you to overemphasize the pros of accepting an investment offer, remember that there is much more at stake when dealing with an investor than your finances. Sometimes simply saying ‘no’ or ‘you are no the right fit’ is the smartest move. In order to evaluate compatibility with your potential investor, there are two things you should focus on:

The Term Sheet

It’s not just about how much money you get, but about how much you are willing to give up for it. Your term sheet is an agreement that establishes the terms and conditions at the base of an investment. It addresses information pertaining to the identification of parties involved, initial purchase price, contingencies that may constitute changes in your agreement, time frames for decision making, equity, etc. It is your responsibility to know and understand its content. In most cases your term sheet is the starting point for negotiations. Investors, backed with their professional experience and legal team, will draft term sheets in favor of their interests. Be ready to come to the negotiating table equally prepared. If you do not see eye-to-eye on an important matter, it may be best to walk away from the offer.

What your investor can offer you

Money will help businesses grow. However, it should not be the only thing that the investor has to offer. The reputation of the venture firms is often taken into consideration. Having a credible investor attached to a startup can assist with credibility, which can be helpful in forming business partnerships and hiring new employees.Many investors wind up taking board seats, so for these roles it can be helpful to find someone with industry experience or an expertise in scaling startups. Investors can help with problem-solving and can also make introductions. A good investor should be available to communicate with you, offer expertise, and give you honest feedback on your operations when needed. You should also look to see if said investor has a contact pool that you may be able to leverage in the future.

Declining an investment offer doesn’t mean you are closing the door to a particular relationship. Explain your business needs are for the time being, and express to an interested investor that you look forward to doing business with them in the future. Refusing to accept an investment offer does not have to be a negative experience. Show gratitude, explain your reasoning, and exchange pleasantries on your way out. You never know when you may cross paths in the future.

Pay attention for cultural fit

Test skill not credential-

Look for passion-

You will be more thankful in the long-run when you’ve hired the right people carefully, and let go of unnecessary baggage quickly. As stressful as times may seem, and as urgent as matters may be, remember that your resources are valuable, and so is your time.

1. Every income statement follows a simple formula There is one formula that every single income statements follows: Revenue- Expenses= Profit.

Understanding how to read an income statement is important, as it summarizes the overall financial health of your business. Not only is it simple once broken down, there are also many tools available online for you to deepen your knowledge on the matter.

Electroad: This technology uses energy from the road to power electric vehicles using that road. Copper chains are inserted into grooves in the asphalt, then connected to a power converter on the side of the road that links to the city’s electric grid. This will revolutionize transport.

Skyfi: It is the world’s most advanced nanosatellite with larger cover area and bandwidth. This allows for better connection between more people, allowing us to become part of a global village. Basically, this is a much cheaper way of spreading internet globally.

1. Every income statement follows a simple formula
There is one formula that every single income statements follows:
Revenue- Expenses= Profit.