Everyone is well aware that having a finance department is essential for any business in all industries to progress. However, when comes to startups its more about when is the right time to set one up, and who will be responsible for overseeing the company’s finances. We’ve seen the difficulties many startups are having with this conundrum and came up with a few tips to help you get started on setting up your finance department.
When a company is just getting started and can’t afford an accountant one of the best moves is look into accounting software programs. Options such as QuickBooks is reasonably priced and will do the number crunching for you. Most startups do their own accounting using multiple spreadsheets, ledgers etc. but technology has created a way for startups to save time on doing math and more time on marketing the business. Utilize the ability to let a computer do the work for you and start figuring out a way to get paid from any outstanding receivables.
Live within your means when it’s time to expand. As the business grows in revenue, you’ll need more help handling the finances, and hiring an accounting firm can be very time costly experience if you don’t know what you’re doing. Research both large and smaller firms, be clear about your expectations and budget when speaking to their agents. Do not discredit smaller firms because on occasion they can produce the type of financial assistance you require within your budget and building business relationships never hurts. A lot of startups can get swept up in the appeal of a large financial firm taking over but unable to maintain the costs associated. There is nothing impressive about going with a big firm if you don’t have the big budget to match it. Keep it simple.
Finally, consider hiring contract, part-time, or freelance bookkeepers to complete your finance department. Not every business needs a full time dedicated finance department. Take advantage of these options and seek outside help who can pick up some of the workloads where your business may be falling short. It’s usually just as effective and keeps costs low while you wait for your business to take that next step up in revenue to hire full-time staff.
Mr. Frank Cianciulli: Well, as a bootstrap startup, by definition, I’d say it’s do-it-yourself.
Mr. Matthew Ley: Okay.
Mr. Frank Cianciulli: And obviously from a financial perspective it’s important, but I mean let’s face it; I mean if you’re just getting started there probably isn’t a lot of revenue just yet. There probably isn’t a lot of accounting to be done, and it’s actually, you know, from just a controls perspective or really understanding your business, at least I did it myself with, you know, a couple of our guys, our sales guys for the first year or two. You know, entering your own receivables and payables and bills and invoices into our, you know, there’s great accounting packages that are really easy to use. QuickBooks comes to mind. It’s so user-friendly. You don’t have to be an accountant to use it. The reports are amazing. You press a button. So I’m more of an advocate that you should try and do it yourself and save the overhead.
Mr. Matthew Ley: Well, you know, people go to school for many years to be an accountant. You can’t walk into being a CA. What is the benefit of you doing it yourself in those early days?
Mr. Frank Cianciulli: I think it just gives you a lot of visibility into your business.
Mr. Matthew Ley: Right.
Mr. Frank Cianciulli: You know, sometimes if you rely too much on accounting and you don’t understand the numbers, you know, we rely on accountants to — or you know, our accounting department to give us best practices and forecasts and help us make business decisions. But sometimes that doesn’t translate. You know, oftentimes accountants are black and white, but there is a lot of nuance to business that you as the operator, the owner, know more than they do.
Mr. Matthew Ley: Yeah, and I mean the last time I saw a balance sheet before I started looking at them in the business was probably my grade 11 business class back at St. Jean de Brébeuf in Hamilton — a little bit of a shout out there. So I mean I remember the principles of it, but getting a completed financials was, I had to learn again when I got into business for myself.
Mr. Frank Cianciulli: Well, let me just give you one example that I faced early in my business career. When, you know, because we kind of took our eyes off let’s say receivables. So [unintelligible] our cash, and then when I ran a report from QuickBooks, you know, I said oh my gosh, we’ve got customers that haven’t paid us in 120 or 180 days, and that really forced us to get on top of receivables and roll out a process. If I didn’t have the visibility I mean I assume at some point, you know, a financial professional would have said hey, someone’s got to get on top of this.
Mr. Matthew Ley: Your DSO is out of control.
Mr. Frank Cianciulli: Exactly. But that being said, you know, if you have the wherewithal there is wonderful services out there. I think CFO For Hire, or there’s a few different companies that basically provide you outsourced at I think fairly reasonable prices. Freelance bookkeepers is probably all you need, as well, and effectively — so I’m not saying, you know, there’s not ways to hire kind of part-time help that will be very cost-effective. If that’s an option, yeah, I would recommend that within the first 3 to 6 months, especially if you have no financial wherewithal. And you want to be focused on growing the business, so I think that is a valuable investment. I’m just telling you what we did. We definitely did it ourselves for the first year.
Mr. Matthew Ley: So you did it yourself, and then you went to one of these outsourced organizations, or did you bring in somebody?
Mr. Frank Cianciulli: No, we brought in — we brought in someone after about your one, year two. You know, it was a little bit longer. It was probably a year and a half in, and we were experiencing a lot of growth, so we managed a lot of revenue. When I say we it was kind of me and one of my operations guys.
Mr. Matthew Ley: Okay. So after a certain point in time — and you would have experienced this in your first business because you guys did grow really quickly. You were in $5 million in a couple years into the business. You’ve got to bring in the big guns at some point, right?
Mr. Frank Cianciulli: Correct.
Mr. Matthew Ley: So you’ve got to bring in like the BDOs or the PWCs to do what’s referred to as review or an audit. So at what point do you need to bring them in, or why would you? And at what point is the review versus audit make sense?
Mr. Frank Cianciulli: Yeah, those are great questions. So yeah, first and foremost, like we talk about as far as hiring, you know, seasoned talent and when you bring them in, it’s the same thing with your accountants, or lawyers or any of that thing. You know, when you’re a startup you don’t need the big four. It’s overkill. You know, people say well it looks good that you’re with KPMG. I get that. You know, at some point when you’re large enough that makes sense, but there are so many amazing small accounting firms that are more than able to handle your needs, and they’re more geared toward small businesses. Their prices are a lot more reasonable and fair, and you can get access to them very well. And it’s easier for them to understand your business. So I would recommend until, you know, depending on your business, but I would say up until $5 million or even $10 million in revenue, a small, a smaller accounting shop or legal firm is what you need. At that point then I would look into potentially the majors.
And the same thing review, Notice to Reader or an audit, you know, audit usually if you’re preparing your business for a sale is when you would want an audit. So as a startup I don’t think you’re thinking that yet. You shouldn’t be. Even a review engagement is really only necessary if you actually bring in some kind of financing, like bank financing. Otherwise a Notice to Reader, very cost-effective even with a big six accounting firm is probably only a couple thousand bucks.
Mr. Matthew Ley: Okay, so a Notice to Reader, you know, when do I need that, or why do I need that?
Mr. Frank Cianciulli: Well, you’ve got to file your taxes even if you’re not making money. So they’ll do a tax prep. And a Notice to Reader basically is showing you that yes, we’ve confirmed the numbers are accurate, but they haven’t — the difference between a Notice to Reader, review and an audit is just different levels of essentially checks and balances or confirmation of every single expense. So really it’s not really until you’re a public company that you even do an audit. Even very, very large private companies, especially if they don’t even have any kind of debt, are even doing Notice to Readers or reviews.
Mr. Matthew Ley: Okay, so when you started the business it was, you know, what we remember from when we were kids. You’re a little bit older than me. Everyone paid by a check. The check went into the bank. You know, there was a person that you gave it to, and then you sent your checks out and you signed them. But we’re in a different world now, and risk that some guys starting their business — or gals — starting their businesses right now have that you didn’t is this cyber threat, the fraud that is going on there.
Mr. Frank Cianciulli: Very concerned, yep.
Mr. Matthew Ley: You were telling me that you even got hit by this, and your organization is quite large and a lot of controls in it now. Does that mean that maybe we need more financial, like call a larger financial organization sooner now to protect ourselves?
Mr. Frank Cianciulli: No, I mean I think you just need best practices as far as, you know, things like signing authority, things like how to authorize a wire, you know? I mean if you let someone in your accounting department, you know, be the sole person to sign a check or to wire funds, I’m not saying they would intentionally fraud you from an internal perspective, but things can happen. People are hacking emails now, and you know one of the big prevalent scams, so to speak, is, you know, an email from the CEO to the finance department saying hey I need you to wire funds to this supplier. And you know, they’re in your email, so it looks like it’s coming from you. Next thing you know your financial person just wires a bunch of money that you can’t afford to some fraudster. And so the key is to just eliminate, try and eliminate human error. And that’s where processes and controls come in.
Mr. Matthew Ley: It’s interesting you bring that one up because, you know, we’ve looked into it, and that is actually targeted at folks like yourself, an entrepreneur, because in a larger organization the CEO is not going to ever make that request, but when you’re in the business like you are or [unintelligible] —
Mr. Frank Cianciulli: You’ve got to play [unintelligible].
Mr. Matthew Ley: Yeah, you’re doing all of that.
Mr. Frank Cianciulli: You know, you’re flying by the seat of your pants.
Mr. Matthew Ley: Exactly. Or sometimes your credit card is being used for whatever it might be. The money is not as clean as it is in a large publicly-traded company, so they target people, people like yourself.
Mr. Frank Cianciulli: That have less infrastructure processes.
Mr. Matthew Ley: Yeah, exactly. They’re counting on you to —
Mr. Frank Cianciulli: To make an error.
Mr. Matthew Ley: To make an error, and in some cases they are right, but it’s not just that. It’s everywhere. So it is definitely something to look at.
Mr. Frank Cianciulli: So those [unintelligible].
Mr. Matthew Ley: Yeah, definitely. Okay, so with that we will be moving on to another review or an update from season one. And just like the world has changed since Frank started his business and cyber threats are a bigger deal, so has the buyer changed in the sales organization. And last year we talked about always be selling, and now we’re going to talk about always be selling in the modern world. Until that point in time, stay lean, guys. Like, share, invite your friends, loved ones and coworkers to watch the show, and we’ll see you next time.
The process of hiring a new employee can be complex and tiring, let alone if your business is a start-up. Start-ups are unique business’ and rely much more on their staff achieving their goals and overcoming challenges that most larger business no longer require.
A key strategy in hiring for a start is, hire for potential not just track record. Past success is always great, but in a start-up, industry potential may be greater. Look for a person who has a strong interest or passion for the type of work your start-up is doing and see if their values align. Measure what potential you can unlock their skills and determine if the job position will give the applicant a chance to succeed and you’ll likely see results.
The culture fit is crucial. This is usually the hardest to pinpoint but it’s always important. Basically, it’s the fit between personality and organization. You will need to examine the behavior, attitude, and mentality of an applicant to see if they’re the right culture fit for your business. There is no guide to fitting into the right culture, it’s more of a feeling and unspoken understanding. Trust in your hiring staff to make the right decision and ensure they ask applicants questions non-work related to find out more about their personality.
Lastly, look for trainable people. Regardless of experience and culture fit, you will always need to train the new person. In a start-up industry training is essential to continued success. If the applicant is hesitant to new ideas or training styles and prefers to do things “their way” you may be setting you and them up for failure. Furthermore, ensure their ability to adapt to changing environments since the start-up field is constantly changing. Being unwilling to be coached or help coach others is how most new hires fail in their first year with a start-up.
Mr. Matthew Ley: Welcome to Boot Strap: Insights for the Self-Funded Entrepreneur with Frank Cianciulli. My name is Matthew Ley, and I will be your host. On season two of Boot Strap one of the things we said we were going to do is look back at some of the most popular episodes that elicited the most engagement from you. Our first episode, “People and Hiring Best Practices,” talked about what type of employee you should be looking for when starting a bootstrap startup. And one clip brought up a lot of comments, and we’re going to play that clip for you right now.
“Anyone who has ever been through The Wish Group or met Frank has probably heard him say at one point in time, that Frank prefers ignorance on fire to knowledge on ice.”
So comments like that, and Frank, I mean you echoed them later in the series when you said that one of your big Frank-isms is that you prefer ignorance —
Mr. Frank Cianciulli: On fire.
Mr. Matthew Ley: — on fire to knowledge on ice. But you know, when you talk to people out there about the current employment landscape, a lot of these people are coming in with not a lot of experience, or younger, and we hear a lot about how they’re just different. It’s hard to find that diamond in the rough who is going to succeed this way. Do you got any experience or any examples in the last maybe two years of someone who this happened with?
Mr. Frank Cianciulli: We do, we do. And you know I just want to preface that by saying, you know, a lot of people at our generation and older will always say that, you know, the new people coming up, or you know we talk about millennials, don’t have that fire. It seems to be missing. And I can’t comment on that because I don’t have a reference point 30 years ago to compare. But I will say we’ve, you know, a great example is a guy we had that, you know, relatively young, but no B2B experience, didn’t understand anything about our product, but you know, you meet with him, and I’m sitting across from him, and I’m looking into his eye, and I just know there is the fire. There is a hunger for knowledge. And he wanted to grow and learn. And you know it’s hard not to take a chance when you find someone like that.
Mr. Matthew Ley: Right, and I’m assuming you had opportunities maybe to hire from competitors at this stage.
Mr. Frank Cianciulli: Of course [sp].
Mr. Matthew Ley: You’re not an early-stage startup anymore. So what happened? How long ago was that, two years ago?
Mr. Frank Cianciulli: Yeah, about two years ago, yeah.
Mr. Matthew Ley: So you know, talk to me about his first year, you know, what happened in that year and maybe where he’s going to [sp].
Mr. Frank Cianciulli: Yeah, and typical — and that sometimes, you know, especially in a startup you think oh, do I go with a guy that has the experience, that maybe has a book of business he can bring over? But you kind of know that they’re not going to be stars. And so, but with this guy so you knew year one it’s all about learning, learning the products, getting comfortable on the phones. He definitely wasn’t afraid of the phones, which was excellent. That’s what you want in sales guys. And then year two it really — I mean he had some success in year one, but year two is really where he started coming into his own. You know, and just recently he said he’s never made more money in his career, and by year two, and in year three we’re looking at this is a guy that, without question, would have outperformed any senior guy that I would have hired.
Mr. Matthew Ley: Yeah, so you’ve got to be pretty happy with that, two years to that level.
Mr. Frank Cianciulli: We love when that happens. That’s like a professional sports team drafting a young player that turns into a star within the first couple of years.
Mr. Matthew Ley: How does he feel? Like what — is he — I mean is he a kind of guy that’s really into what’s going on in the company?
Mr. Frank Cianciulli: Oh, he’s become a cultural warrior. He’s taken on so much leadership, as well, where you think hey, some of the things that he does, taking ownership over calls, I mean man, the guy is even coordinating our office move this past month. These are some of the things I would have hoped my veterans would’ve kind of jumped all over, but you know the thing with ignorance on fire, especially once they then acquire the knowledge, is you’ve got a cultural warrior. You’ve got an all-star. So really great companies have to have that kind of — I call it a farm system, where you’re incubating your own talent. And there’s more loyalty there, too, as well. I mean I know everyone’s always afraid of having those kind of people being a flight risk, but there’s ways to maintain and to retain those people.
Mr. Matthew Ley: Yeah, and I mean it’s one of the reasons why you lose anybody out there is when either side feels there is an inequity, right? As an employer you don’t feel like they’re doing their job, and as an employee they don’t feel like the company is giving back the effort that — to the effort that they’re putting in sort of thing. You brought it up. It’s constant growing concern, right, when bringing in entry-level employees there is a knowledge that, you know, they’re in an entry-level. They can easily jump to another entry-level for maybe $5,000 more, or closer to home, or on the subway line, or whatever it might be. Are you — clearly you’re still hiring entry-level employees in different businesses. What are you doing today to ensure that, you know, they grow into like this guy that you were just talking about?
Mr. Frank Cianciulli: Yeah, and I don’t know that I’ve got, you know, the answer that will solve that problem, although I can share our experiences that have helped us. You know, I don’t know if it’s just a millennial thing. I think people of all ages, you know, when you’ve got a hot job market and people and recruiters are calling them, and it feels good when someone wants you and is offering you more money. That being said, what I’ve learned with even millennials is that if you show them a path to how to grow, because oh they feel entitled, and they want to be VPs immediately, no they don’t. They don’t. But they at least want to see a path, and so that’s something we’ve been doing as well. We let them know exactly what’s expected and where they should be in year one, and what the behaviors and what success looks like in year one versus year two and year three, and what the leadership potential — some people aspire to leadership, and that’s great. As long as they can see that you’ve got a plan and you recognize that skill in them, then they’re vested to stay.
Mr. Matthew Ley: Right.
Mr. Frank Cianciulli: You know, and then obviously pay them as you go. Again, I hate to use those sports analogies all the time, but if you’ve drafted a rookie and he’s been a star, you know, you sign him to a cheap entry-level contract.
Mr. Matthew Ley: Yes, exactly.
Mr. Frank Cianciulli: But then you’ve got to pay him.
Mr. Matthew Ley: Yeah, you’ve got to pay up when he comes of age, right?
Mr. Frank Cianciulli: Exactly.
Mr. Matthew Ley: Or, you know what, be ready to let them go. And in some businesses the economics of it doesn’t justify having a lot of those high-priced players.
Mr. Frank Cianciulli: That’s right.
Mr. Matthew Ley: Doesn’t mean they didn’t help you for two or three years, and you know, going to be happy for them to go off somewhere else and be successful.
Mr. Frank Cianciulli: And you know what, there’s something to be proud of that, as well. You know, I mean like every business we’ve had people that have moved on to great opportunities, and I’m proud of that. I mean, if we were able to help, you know, shape that person’s skills and careers and help them realize their goals and dreams and indirectly help their families, that’s what’s wonderful about being in business and being an entrepreneur is that’s your way of giving back just in itself, creating employment and helping shape people’s lives.
Mr. Matthew Ley: And that’s actually — you know, a lot of you out there, we know those are you, people who have come through The Wish Group, because a lot of you left comments in season one. Okay, next episode we’re going to get back to some of your questions and the stuff you were talking about, and again, a lot of questions about finance, so what we’re going to do is we’re going to dive in on basically how to set up your financial organization. Do you DIY? Do you bring someone in? Do you use a rental player? All that and more on the next episode of Boot Strap. Until that time, guys, keep it lean. Share this with your friends, family and loved ones, or anyone you think might be interested.
Mr. Matthew Ley: Welcome to Boot Strap: Insights for the Self-Funded Entrepreneur with Frank Cianciulli. My name is Matthew Ley, and as always, I will be your host. On this, the first [sic] episode of season two, we’re going to dive into one of your big questions from last year, and that is how to get your funding right when you are a bootstrap company. Frank, when I hear funding I think banks, I think angel investors, venture capitalists, none of which makes me feel like it’s a bootstrap. What do you mean when we’re — what do they — you talking about when you say funding in this environment?
Mr. Frank Cianciulli: Well, I mean, you know, getting access to any amount of money that can allow you to launch and survive until you can drive business. So yeah, everything you mentioned are different forms of financing. I think most people believe that banks would be there, you know, if you have a great idea, where they’re not. Banks typically do not fund — the most brilliant idea you can come up with, banks do not fund for that. Banks give you money when you don’t need money anymore. So for the most part, whether in Canada or the US, you’re tied to your own capital, friends and family or what we call angel investors or venture capitals. And again, venture capital for the most part, at least in the last few years, has been geared towards technology. So again, most people that got really great business ideas but aren’t really as sexy still struggle to get access to capital.
Mr. Matthew Ley: Right. And you’re doing a bootstrap business, so you might be using your credit card, your mom’s credit card. I mean Jeff Bezos started his business in his parents’ garage, right? He had that first server sitting there. What recommendations do you give to someone? They’re out there. They’ve got an idea. Like when you started, they knew they could be successful in an industry. How do you decide whether or not you go out and get a — go for, you know, a couple million dollars and cash up or do it, you know, much more bootstrap?
Mr. Frank Cianciulli: Well, rule of thumb is always, you know, get as much money as you can whenever you can. That being said, a lot of entrepreneurs want to keep a lot of their business. So the more money you go and raise when you don’t have any revenue yet, as people observe if they ever watched Dragons’ Den or Shark Tank, is the more of the business you give up — because they say well, your business has no value. Well that kind of sucks. The whole point of building a business is so you can have equity in it and own it. So that’s why I’m more of a bootstrap guy and say listen, I don’t want to take anyone’s money unless I absolutely need it. So every dollar’s got to stretch a long way. So as far as in my case we did raise some money with friends and family, but only as much as we needed, and ultimately the real access to our capital, and which most people should really focus on, is sales. Sometimes you can do a lot of presales even before you launch your business, and we can talk about that.
Mr. Matthew Ley: So presales before you launch your business, so you’re — I guess you’re out in beta or something, or you’re just kind of getting started?
Mr. Frank Cianciulli: Yeah.
Mr. Matthew Ley: And then you use that money to fund, I guess, what you do next.
Mr. Frank Cianciulli: Yeah, I mean if I were, you know, if I had an idea, and you know I wouldn’t necessarily wait to raise money, rent an office, hire some people and then start my prospecting. There’s no real reason in most cases you can’t at least get that proof of concept and have some customers say hey, listen, this is an idea I’m thinking of. This is how I think it will help your business. I’m going to be live on this date. Can I count on you at least at that time to come and talk to you and really, you know, get you into beta or actually buy my service? That will give you an indication of how quickly you’re going to come out of the gates and give you a better idea of your actual performance or pro forma going forward.
Mr. Matthew Ley: But isn’t sometimes that’s a problem, you know, in many cases the more you sell, your cost of goods sold go up, your infrastructure needs to increase, and then you get into a situation where you’ve got to pay people a lot of money?
Mr. Frank Cianciulli: Yep, and now we’re talking about another great — that leads into another great source of financing is your vendors, which is, you know, not always easy, especially if you’re a startup because, you know, the suppliers might not know whether you’re good for the money. But oftentimes you would be surprised, especially with startups. You’ve got suppliers that are big enough to support you because they see the potential that you’ve got, so it’s going to be a — you’re going to be a big piece of business for them. They might extend you 60- or even 90-day terms, and that helps a long way because then if you sell something hopefully you can get paid by your customer before you actually have to pay your supplier.
Mr. Matthew Ley: And I would — when you started and you had vendors when you started [unintelligible], right?
Mr. Frank Cianciulli: I did.
Mr. Matthew Ley: I imagine you had, you know, a real conversation with your vendors about where you were at —
Mr. Frank Cianciulli: Absolutely.
Mr. Matthew Ley: — so they recognized the importance of maybe not being your bank, but of extending you those types of terms.
Mr. Frank Cianciulli: Well, it kept me — you know, when we were late they kept calling. We’re not your bank. In our case we actually made them partners. You know, we actually made them partners in our business. Therefore they were tied to our success, and they, you know, they got value out of helping us or being our bank, so to speak.
Mr. Matthew Ley: Right. But that is an interesting form of funding, right? You find a strategic partner, they get a piece or whatever for it, and as a result you can alleviate some of those cash stressors [sp] early on.
Mr. Frank Cianciulli: I mean there’s two components to basic business, right? You’ve got to become profitable. But sometimes even if you’re — because some entrepreneurs say oh my God, I’m profitable, but we’ve got no money. So there’s two components. There’s being profitable first and foremost, and then cash flow. But if you’re consistently profitable, obviously cash flow will catch up. But while you’re getting started you’ve got to walk the fine line of both. So obviously trying to collect money as quickly as you can is important. That sometimes gets neglected when you’re out there trying to just sell and survive and grow your business. You kind of forget about collecting, or you don’t have the process in place to collect that cash flow quickly. But there’s other ways to stretch, right? We talk about vendors giving you maybe some extra terms. Credit cards are popular that way, you know, because you get an extra 30 days, give or take, if, you know, if you’re able to pay certain expenses to your credit cards as well.
Mr. Matthew Ley: Perfect. Well, part of that is the discipline within finance, and I would recommend if you haven’t seen it that you check out our discipline episode from last year. But later on this season we’re going to get into how to structure your finance organization in a bootstrap startup and answer some key questions there. But next week we’re going to go back. Last week — last year one of our most popular episodes was the — I think it was episode one, actually, people hiring and hiring best practices. And you said some things about the type of people you like to hire in a startup, which really resonated with everyone. And so we’re going to do a deeper dive on next week’s episode. Until that time, please leave your comments below, share this with your friends, family or loved ones, and keep it lean.
Mr. Matthew Ley: Welcome to Boot Strap: Insights for the Self-Funded Entrepreneur with Frank Cianciulli. My name is Matthew Ley, and as always, I will be your host. Today marks the start of season two of Boot Strap. That’s right; we’re back. We had a lot of really positive feedback and a lot of questions from all you entrepreneurs who have been watching. Some of the key questions we hope to answer this year is more of a dive into the finance side of being a bootstrap operation, as well as giving a little more color, some stories about Frank’s last 15 years in business that informed some of the ideas we shared with you last year. All right, with that out of the way let’s get started. Frank, thanks for having me back for Boot Strap.
Mr. Frank Cianciulli: Well, it’s great to be back.
Mr. Matthew Ley: So we did get some great feedback. What are the things that you heard after we released the series last year?
Mr. Frank Cianciulli: Well, I heard a lot of positive feedback, and what was most reassuring and exciting was the varying, you know, people from all different types of backgrounds that gave me some feedback, whether it was, you know, an entrepreneur who was just kind of getting off the ground, or someone who was scaling their business very quickly, to very large business owners got some value out of it.
Mr. Matthew Ley: We even got some from employees at other companies.
Mr. Frank Cianciulli: We did, and/or, you know, I’d be interviewing a candidate for a role at Wish Group and say oh, you know, I caught those videos and it was really — you know, I shared with my spouse, or my friend, or a gentleman who runs [sp] a business. So yeah, it was great to hear that people are getting value because that’s the whole point. We’re hoping someone gets value out of these.
Mr. Matthew Ley: Exactly. You know the one thing I heard — I mean I talked to our PR guys, and they were talking about how this really is unique. There’s a lot of talk about entrepreneurialism in this country right now, but the idea of how to do it bootstrap was something that they had not really seen.
Mr. Frank Cianciulli: Yeah, and I think — and I think we mentioned it in one of the episodes early in season one, was that, you know, there’s no such shortage of experts or reading material on the internet about tech startups or some of these exciting crypto currencies in AI. But for most business owners, I would say 90%, 95% of them, you know they’re out there bootstrapping it. You know, they’ve got some similar challenges of cash flow and how to manage and find good people and how to generate more sales. They’re not out there doing multiple rounds of finance. So it’s not as sexy, but it’s very relevant.
Mr. Matthew Ley: Exactly.
Mr. Frank Cianciulli: So I’m glad that, you know, I’m obviously glad that people see value in that.
Mr. Matthew Ley: Well the other big feedback that I got personally was on just how bright and maybe awful my socks were last year, so I’ve tried to tone them down for this season. Now let’s get started with a bit of a broad question. There is a lot of talk about entrepreneurialism in Canada. What do you think is the state of affairs? Is it a good time to start a business in this country?
Mr. Frank Cianciulli: Well, I’ll say that it’s never been better.
Mr. Matthew Ley: Okay.
Mr. Frank Cianciulli: You know, I still feel that Canadian entrepreneurs are frustrated with the lack of governmental support, not only government support, but from banks. Everyone complains about the banks, in general in the investor appetite in early-stage companies isn’t quite where, you know, we need it to be, at least compared to the US where there’s lots of capital. But it’s improving.
Mr. Matthew Ley: Okay, so [unintelligible] the government is sort of getting on board. I mean we have heard some, I guess some moves they’ve been making that are going to affect small business that seem anti-employer, but you feel like they are backing the entrepreneur, or they’re ready to get involved maybe?
Mr. Frank Cianciulli: You know, I don’t want to get into my opinion on the government. I really think there is a lot of room for improvement there. But what I am seeing improvements, which I’m happy to see, is in the venture capitalist community. Still very small compared to the US, but growing. We are now starting to see many more entrepreneurs that have successfully scaled and exited their businesses that are turning to mentorship and let’s call it becoming venture capitalists themselves, which that was the trend that began 20, 30 years ago in Silicon Valley. That’s what has made that such a hotbed.
Mr. Matthew Ley: Right. There’s been some formalization of this, as well, like incubators. I’m not sure if MaRS counts. I think there some government involvement there.
Mr. Frank Cianciulli: Yeah, MaRS is a good one [unintelligible].
Mr. Matthew Ley: But there is more of that Silicon Valley type, you know, shared spaces or whatever they might be.
Mr. Frank Cianciulli: Yes, and that’s also very encouraging because with Silicon Valley, you know, obviously there’s so many venture capitalists in Silicon Valley, but they’re not money guys. They’re not bankers. These are gentlemen that have, you know, sold their businesses for billions of dollars. So you’re not just getting money. You’re getting access to their contacts. They’re obviously brilliant guys that have done it before themselves, and they’re entrepreneurs at heart. That’s in their DNA. So when you get funded in the Valley from a venture group that they’ve all been on board to these great startups, that they invested early in the companies like Google. Your odds of success go way up. In Canada historically it hasn’t been there. Even if you are accessing early-stage capital it’s maybe friends and family that don’t really know anything about business; they just want to support you.
Mr. Matthew Ley: Exactly.
Mr. Frank Cianciulli: Where so now we’re getting these entrepreneurs, and they’re also packaging it up in some great programs. CoFoundersLab comes to mind, Creative Destruction Lab comes to mind because you’re basically getting a brain trust there. So you’re getting access to capital, but they’re also putting you through a boot camp and coaching you and helping you how to scale your business beyond just providing some office space, which is also valuable.
Mr. Matthew Ley: Right, yep, and that’s not dis — I mean, that’s not dissimilar to The Wish Group. I mean you’re not just putting seed money in, but you’re helping young entrepreneurs basically get their businesses off the ground.
Mr. Frank Cianciulli: Exactly. So you know obviously at Wish Group we’ve done very well at starting up companies and scaling them very quickly. So we provide a nice infrastructure for you to do that, from whether it’s finance, marketing, IT, and most importantly access to our clients and our brilliant leaders, such as yourself because iron does sharpen iron, and it’s always better for a young entrepreneur, as they are out there embarking on their entrepreneurial journey, to be able to mentor and speak with someone who has already walked through the minefield.
Mr. Matthew Ley: Yeah, and as a young entrepreneur I’ve said it many times on this show and elsewhere, couldn’t have done it without that, just like most people can’t do it without some sort of funding.
Mr. Frank Cianciulli: You got it.
Mr. Matthew Ley: And that was a big question that you guys had. So what we’re going to do on the next episode of Boot Strap in season two is we’re going to dive in on funding. We’re going to hear from Frank and learn how he funded his first business and some dos and don’ts of funding a bootstrap startup. That’s all the time that we have today, so make sure that you comment. Let us know what you think. Any questions that came to your mind, we’ll be answering those, as well as share this with your friends, family or loved ones and keep it lean.
Are you living your best life?
If you’re not sure, use my blog about 5 Steps to Define Your Own Success to evaluate what matters to you and how you’re working to achieve your own version of success.
Once you know how to define success in a way that is meaningful to you, you can use your Success List to guide your career decisions.
Whether you’ve been working for years, or are just getting started, regrets can always set in.
We often think about the “what-ifs” and convince ourselves that the grass is truly greener in another job, but this isn’t always true.
Really quickly, I’ll go over the most common mid-career regrets:
- Not Designing Your Own Life: Listening to other people’s advice instead of your own desires.
- Not Investing in Yourself: Take the time to invest in your knowledge, health and soul.
- Missing Out on Moments: A Work-life balance doesn’t always lead to happiness, think through the moments of your life that you’re happy to be at work, and the moments you want to experience outside of work.
- Not Being Authentic: Being too focused on other people and how you are perceived instead of learning more about who you are and what you believe in.
- Searching for Happiness Instead of Creating It: Learning about your authenticity will help you learn how to create happiness in your life.
- Letting Fear Prevent Change: Doing your research and thinking through decisions is good, but letting fear keep you from making that leap is not a risk you should take.
- Not Addressing Toxic Situations and People: Time is your most valuable asset and spending it in situations or with people who don’t build you up is a waste of your valuable time.
- Being Trapped Around Money: Save up a cushion of savings that can last you 6-9 months of unemployment to help temper the fear you may have around changing your career.
My Tips to Avoid Mid-Career Regrets are:
1) Continue to strive for growth
Even if you love what you’re doing, at some point you are going to have to put in hard work. It might be work that challenges you mentally, physically or emotionally, but it will challenge you.
You may think you want an easy job, or just to turn your hobby into a paid gig, but waking up each morning and looking forward to the day ahead often comes from experiencing continued growth through challenges.
Even something you love can become difficult when you turn it into a job, because when you do an activity all day long and depend on it for survival, the playfulness can disappear quickly.
Continue to strive for grow in your career in personal, professional, and spiritual ways.
Personal growth can come from trying to be early into work on a regular basis, or getting along with a co-worker who knows how to get under your skin.
If you’re a workaholic, personal growth can also come from learning how to find a better balance between your work life and life outside of work.
Professional growth can come from a mentor, and if you don’t have one yet, I highly recommend seeking one out.
Professional growth can also come from company lunch-and-learns, reading books or blogs about topics you’re interested in knowing better, going to conferences, or enrolling in continued education courses.
Spiritual growth can come from starting your days with gratitude and meditation, or finding time at work to have a quiet mind to centre yourself.
Whatever your personal journey is, you can make room for spiritual growth in your career.
2) Take More Risks
Naturally, our brains are designed to keep us safe. Taking risks of any kind can feel dangerous, even if the “danger” isn’t as real as it seems.
Our aversion to take risks is our brains way of trying to maintain a status quo, keep us in our comfort zone and feel safe. However, it is also what causes us to be stuck, resist growth and thus fall short of meeting our full potential.
Do your research and seek out advice from mentors/peers/family you trust, but in the end you need to make your own decision based on what you know is right for you.
When we ask for other people’s opinions they sometimes project their fears onto us in a bid to keep us safe.
Being authentic and designing your own life may not come easy, but part of living your destiny and not your shadow career is being able to live with and even embrace uncertainty.
If you know that it is time for you to move on, to learn something new, to change your career direction or to start your own business, you will not be fulfilled until you take action.
3) Make Lateral Moves for Happiness
As a society, we are obsessed with climbing the corporate ladder.
Sometimes moving sideways, onto a new ladder, will bring you much more happiness and fulfillment.
Take time to look up; where is your career heading, and does that bring you excitement or apprehension?
Searching for happiness at the top of a corporate ladder can lead you to become disappointed and cause you to miss out on important moments in your life.
So every 1-3 years, take some time to consider how far you’ve come, the path that you’re on, and where you want your future to go.
A lot of people make career decisions without knowing what they’re working toward. If you make a decision that is only based on moving “up” you will most likely experience career regret.
Take the time to consider the type of work that plays to your strengths, develops some of your weaknesses and work that energizes you. Find ways to add more of that in your work life, and you will experience less regret.
Time you enjoy spending is never time wasted.
4) Consider Your Overall Wellbeing
A work-life balance doesn’t exist, we bring work home with us emotionally and physically.
Sometimes we spend so much time working it feels like we never go home at all.
Do you know why you’re working?
Is it to make more money, or is it bigger than that? While we do need money to support ourselves and our families, being trapped around money can keep us from making changes to get away from toxic situations or investing in ourselves to move towards a more authentic life.
There will be pros and cons to every job you have, in whatever career you’re in.
Weigh them carefully to understand what matters most to you.
In the end, your career path, your success, and your happiness depends on you.
Use your definition of success and your personal Success List to guide your career decisions.
Even with all of this knowledge, you may still find yourself feeling some mid-career regrets. Just know that your time has not been wasted.
You can learn valuable lessons from every experience in life, and mistakes do not lead to failure unless we fail to learn from them.
That old saying, “do as I say, not as I do” isn’t going to cut it in business.
As the CEO, boss, and/or manager, your employees, associates and clients learn how to act from the examples you set.
“Serious leaders understand that, both by design and default, they’re always leading by example.” (Michael Schrage, HBR)
While you have worked hard already to get yourself into a position of leadership, you cannot slack off while your teammates are watching.
Refusing to lead by example alienates your people from you, feels like a betrayal for them, and decreases morale.
Setting a double standard of asking for more from your team than you ask of yourself will quickly build a team who resents each other, refuses to go the extra mile, and lives for the weekends.
Accepting your position as a leader and leading by example sets the tone of your workplace, encourages passion, loyalty and trust among team members, and ultimately develops future leaders.
Leading by example builds trust and makes people want to follow you because people are more likely to follow those they trust.
If you are in a leadership position, you are responsible for the morale of your team. “The culture of an organization is set by its leaders, and if those leaders are not consistent with their positive messages, both explicit and through their actions, it impacts the culture.” (Kevin Dee, The Eagle)
You need to lead your team toward success by being the first one to go the extra mile. “It’s difficult to resent managers who roll up their sleeves and wade into the trenches when they need to, and who share the same sacrifices their teams do.” (Victor Lipman, Forbes)
Refusing to lead by example is a quick way to lose loyalty and reinforces higher turnover. Employee retention is one of the biggest issues in Human Resource management. Taking the time to build trust among your team will help you even more in the long run.
To understand how strong your current leadership is, ask yourself how you lead by example and write down a few concrete examples.
If you find it difficult to think of examples, don’t be discouraged. Start today and consider how you can build your team up through your actions.
Leading by example takes practice, but that extra effort will pay off by helping you build a stronger team and a better company.
Early in the beginning Wish Group didn’t have a Public Relations (PR) strategy. We did what we could and bootstrapped our way through.
In our first venture, we were partnered with Tony Lacavera of Globalive and he was recognized as #1 on the PROFIT Hot 50 list.
That was such an inspiration and I saw Tony get a lot of PR from that recognition.
So that’s my first tip, apply for awards.
You may feel like you’re not big enough to win an award or doing enough amazing things to stand out, but you could be pleasantly surprised.
Learn how to apply for awards because things like the PROFIT list have you competing against companies that started in the same year as yours, and they measure growth as a percentage instead of purely revenue.
Over time we have learned about a lot of other awards, such as Greatest Place to Work, Best Employers, etc. While we’re bootstrapping and don’t offer a lot of perks, we realized that what we do offer here is better than other companies.
Applying for awards is also a good process to go through to set goals for your business as you grow.
You might have blinders on while you’re working away in your business, and awards can help you feel good about where your business ranks amongst your peers. It can help you validate that what you’re doing is working.
Awards are also team activities, and winning them has a positive effect internally for your team. This in turn benefits your customers and clients too.
Once you start winning awards and getting some PR, it can become more of a domino effect.
Another Tip for Bootstrapping PR is Give Back.
We’ve done some things for our community without having PR in mind, but they ended up generating a lot of positive PR for us.
Growing up as a business in Liberty Village has been great, and the community has helped us grow. We wanted to do something to give back to our community, so we created an event named Calling on Liberty.
The event showcased a lot of local Liberty Village artists and raised money for the local community.
Just Tell Your Story.
You might think no one cares to hear what you have to say, but you would be surprised.
People want to hear what you have expertise on.
Get Digital and Social.
The newer digital and social media world can be intimidating, but it’s an amazing medium for telling your story.
Connect with your audience.
Even doing a video series like Bootstrap and sharing clips will help you get your story out to more people.
I wish I had started my video series years ago!
We are living in a very content centered world, and you’d be surprised about how many well-known magazines are hungry for content you can deliver.
Just get started somewhere.
For this episode of Bootstrap, click here: http://wishgroup.ca/s1e12-get-your-pr-right/