Cultivating your own business

The word startup gets thrown around a lot in Kitchener-Waterloo. But what does it actually take to start a startup?

We talked to representatives from Communitech and the Waterloo Region Small Business Centre to get a glimpse into the world of startups. Rob Clement, small business advisor at the Small Business Centre, and Angela Larraguibel, director of startup services group at Communitech, talked about their experiences working with individuals breaking into the industry.

What are Communitech and Waterloo Region Small Business Centre?

Communitech is a not-for-profit innovation centre that supports tech companies located in Waterloo Region.

In terms of their offerings for startups, they provide two years of service at no charge. During this time you will be assigned a lead advisor who will liaison and advocate on your behalf.

After this time, if your venture displays growth, they will consider giving you another year of free assistance. You can also pay a membership fee of $300 for companies with one to five employees.

They also offer educational programs, such as Business Fundamentals, which is a six-part series that acquaints individuals with entrepreneurship. They also run networking events and provide human resource consultation.

The Small Business Centre is a primarily government-funded organization dedicated to assisting entrepreneurship in all industries and at all levels.

This means they support individuals who are in the first stages of investigation, who perhaps don’t even have an idea yet, but know they want to get into entrepreneurship, as well as existing businesses who want to expand.

What are some first steps?

According to Clement, the process of starting a business begins with identifying some needs in the community and what your own skills and interests are.

The idea for the startup will emerge out of the intersection of these.

“Come into the centre and we’ll sit down and talk to you about the things that excite you, the things that are interesting to you, the things that get your creativity and your passion flowing,” he said.

“And then look at what sorts of things you can offer the community at large to capitalize on those particular passions and that particular mindset.”

Is there a set process?

Both Clement and Larraguibel noted the development of a startup is differently paced for everyone. Individuals come from all walks of life — some are working on their business while still working full time or are in school, while others are able to devote a vast amount of time to their project.

Regardless, Larraguibel said they start everyone with an orientation session before working through a lean business model canvas.

This is a one page business plan that’s meant to help individuals easily identify where the gaps are in their idea. They also encourage their clients to attend the Business Fundamentals series.

“We always describe it as a gym membership model, so the more you put into it the more you’re going to get out of it,” she said.

Clement continued that the process and length of time this takes depends on what the business idea is.

Where planning, viability and market testing all come into play for all startups, that’s really where the similarities end.

“Some people can jump in and do a quick business model canvas and then do a quick launch with some viability studies and evolve the business based on customer feedback,” he said.

“Other people require more in-depth resources in the beginning and then they’d look at putting together more of a formal business plan, possibly looking for bank financing, that sort of thing.”

What credentials do you need?

According to Clement and Larraguibel, formal business training isn’t necessary to get your startup going.

“I would say the majority of the people we encounter have a pretty strong academic background and usually a very strong technical background, but perhaps not so strong on the business side of things,” Larraguibel explained.

Clement said there are generally two groups of people who approach the Centre.

One has a particular passion they want to provide the community with, the other sees a problem that they want to solve.

They come to the centre, though, because they’re inexperienced in the business world.

How much money do you need?

It depends on what your idea is. From a tech perspective, Larraguibel said it depends on elements such as whether the startup requires software or hardware or how crowded the marketspace is.

Clement echoed this, explaining that it depends on what you want to do with your business.

Smaller businesses might need more money in the beginning to get it off the ground, whereas scale-up startups can be developed on a smaller budget, but will eventually require more investment.

What are some difficulties people are met with?

From Clement’s perspective, some of the problems people have with startups arise from their lack of business experience.

“A lot of times they get into it where there’s a situation that the business has to work, or there’s no room for failure,” he explained.

“And that can really tie yourself to something. If you’re looking to get into it, slow growth, organic growth is always the way you want to do it. Forcing the issue can be really difficult.”

He highlighted the importance of being willing to take the longer route.

The shoestring method, as he called it, involves individuals recognizing they don’t have enough money to launch their startup, but going through with it anyways.

While a lean model involves using your money to do smaller things successfully and using these experiences as learning opportunities that can then be leveraged later on. This method, he said, is much more successful.

For Larraguibel, validation is key for individuals who have an idea for a startup. This means going out and talking to potential customers about their needs and desires.

“The entrepreneurs that come to us, they’re really driven and passionate individuals,” she said.

“And that’s a really admirable quality, but you have to temper that with reality in that there has to be a good fit for it in the marketplace.”

Opportunities for students

The Small Business Centre offers two programs that are specific to students who are interested in trying their hand at entrepreneurship.

The Summer Company program provides post-secondary students with financing, training and mentoring to assist them with running their own business for a minimum of 12 weeks in the summer.

They’re given money at the start of the summer to invest in their business, money at the end of the summer to compensate for the possibility that the business didn’t do well, and they’re able to keep all the money they earn.

“At the end of the day, the worst case scenario is you get 12 weeks of business experience and you’ve discovered whether this is something that excites you and is interesting to you or not,” Clement said.

The Starter Company program is for post-secondary graduates who want to launch their business full-time. The program also provides individuals with training, mentoring, and a $5,000 grant.

Other advice

If you’re interested in starting a startup, Larraguibel recommended attending events like Startup Weekend Waterloo Region, hackathons and other networking events for entrepreneurs.

“All of those sorts of things — come out to them, get a flavour for what’s going on in the community and start having a discussion with people about their experience with it,” she said. “They’re going to learn a lot that way.”

She also advised individuals to familiarize themselves with the resources available in the Waterloo Region. Clement noted the goal is to help individuals be successful and so they’ll quite often refer individuals to other resources that might better suit their needs.

He recommended keeping an open mind even when it comes to what your business plan might look like. Every business plan will look different.

“Take some time to think about what you want to accomplish in your business and build from there,” he said.

What other startup resources are available in K-W?

Waterloo Region Manufacturing Innovation Network

Laurier Entrepreneur

Velocity

Accelerator Centre

Kitchener Waterloo Chamber of Commerce