Financial Literacy Month in partnership with Scotiabank – Taking the Fear Out of Finance

*The following content should not be considered financial advice. Before acting upon the following information, we recommend you seek the guidance of a qualified financial or business advisor who can take your unique needs into account.

Financial management and funding are consistently the number one pain point for Canadian entrepreneurs. Powered by Scotiabank, in recognition of Financial Literacy Month, Startup Canada is shedding some light on this complex, multifaceted hurdle countless founders face across the country. Through the curation of specialised financial resources for small businesses and speaking to leading early-stage entrepreneurs across the country about their financial journeys, we can take the fear out of finance together.

In a 2018 study, it was found that less than 20% of Canadians believe they have strong financial literacy – with over 40% rating theirs as poor. Financial literacy is something that impacts all Canadians, including entrepreneurs.    

This four part series will take a deep dive into four key topics of financial management and planning for startups: 

1. Feasibility & Foundations.
2. Financing That Works for You. 
3. Performance Monitoring & Optimization for Profit. 
4. Retirement & Succession Planning. 

Business Planning, Feasibility & Foundations

When you’re an entrepreneur, even getting the foundations in place for your new venture can bring a mountain of hurdles and headaches. Feasibility and business planning are common pain points for Canadian founders, with 58.6% of respondents of Startup Canada’s most recent census noting that business planning is a top area of support they need in order to grow. What’s more, 41.7% of respondents indicated they currently have negligible revenue and are still refining their concept. 

For startups there are a number of key foundational elements to consider and implement, even before launch. The following is helpful for getting you started, curated from Startup Canada’s Business Owner’s Toolbox: 

ELEMENT	WHAT’S INCLUDED	WHY IT’S VITAL
Ideation and Business Planning	Business Model Canvas: Composed of nine building blocks that show the logic of how a company intends to deliver value and make money. The nine blocks cover the three main areas of a business: desirability, viability, and feasibility. This model is similar to a blueprint for implementing organisational structures, processes, and systems. Ideation Process: Analysis of market demand (why consumers will do business with you and not your competitors. It’s also important for you to understand if there’s a real need for your product or service) and skills/competencies (do you have the skills to implement your idea and transform it into a successful business?). Techniques for ideation include: brainstorming, prototyping, and the 6-3-5 method.	Business Model Canvas: As opposed to the traditional, intricate business plan — helps organisations conduct structured, tangible, and strategic conversations around new businesses or existing ones. This is a time-saving, helpful tool before you’re ready to complete your full business plan. Ideation Process: A creative process and a crucial step in your design thinking process, where you as an entrepreneur can put yourself in your customers’ shoes and understand their needs, desires and problems.
Market Research	SWOT Analysis: SWOT stands for strengths, weaknesses, opportunities, and threats. In doing effective strategic planning, your company should focus on: building on strengths, converting weaknesses, maximising response to opportunities, and overcoming threats. Competitor Analysis: Identify your competitors, analyse their strengths and weaknesses (price point, customer service, size, etc.), and strategically identify your competitive advantage. Primary Research: Can take the form of internal analysis, like outlined above, or it can include primary surveys of potential or existing customers through: surveys, focus groups or observations. Secondary Research: Involves making use of existing information. In this age where data feeds every decision, it will be easy to find existing data on the industry, customer base, and product line that your business is focusing on.	SWOT Analysis: A form of primary research, a successful SWOT Analysis will give your organisation and team clarity and direction when you’re in the early stages for strategic planning. This process can be repeated at every stage of your business, when launching a new service/product, or when there are shifts in a given market. Competitor Analysis: A successful competitor analysis will help you in identifying and defining your competitive strengths – attributes that make your business stand out from the competition. Primary Research: Helps you and your organisation to understand your USP (unique selling point) and gather pointed, applicable feedback on your business specifically from potential customers, stakeholders, and other key ecosystem players. Secondary Research: Increases your market and industry awareness on a large scale - industry data is typically taken from much more substantial survey pools conducted by professional research institutions. While you may have to pay for some of these studies, it can pay off.
Testing, Validation, and Feasibility	Testing: Now that you’ve determined the demand for your product in the market, it’s time for you to gather your feedback with the tangible product or service in the market. You can either ask your internal team to assess your offering, or create a campaign to gather external feedback also known as beta testing. Consolidation of Feedback: After you’ve gone through market research and product testing, you need to make sense of the feedback you’ve received. Try to find common trends whether positive or negative. If responses show that people are facing the problem you’re trying to solve, they could use your product/service without any major issues, and are ready to pay the price you’re asking for, then you’ve successfully mastered your Market Validation study!	Testing: Surveys surrounding a hypothetical product/service are great, but feedback on your go-to-market offering is vital - you may catch areas for improvement, bugs, strength and unexpected advantages, or issues with government regulations. Consolidation: Data without analysis is just data. Data with analysis is information that may give you a competitive advantage and help propel your business’ growth trajectory. Take the time here - it’s worth it.

For this segment, Startup Canada was pleased to sit down with Lourdes Still, founder of Masagana Flower Farm and Startup Women Advocacy Network (SWAN) representative for Manitoba, to learn more about her business planning  journey – how she pivoted to feasibility in the early days, her process for projecting income and managing expenses, and her advice for other early-stage founders just starting out with the foundations.

SC: Tell us about you and your business! Who are you, and what does your business do?

LS: My name is Lourdes Still and I am a flower farmer, natural dyer and an experience guide at Masagana Flower Farm. It is a seasonal flower farm, a dye studio and a new experiential tourism destination located in Southeast Manitoba. I grow flowers that I can use not just for floral arrangements, but especially for dyeing my handmade naturally dyed textile goods such as silk scarves and pillowcases. Recently, I pivoted to experiential tourism I call the “Tinta-A Dye Your Own Wearable Art Experience” – TINTA Experience for short. It is a four hour engagement at the farm where my guests learn about growing flowers, picking blooms themselves while touring the garden, and then use these materials to dye their own silk scarves. They also learn about surface design and dye their own cotton shawl with indigo. All of these experiences are with my guidance and at the end of our creative time together, we’ll wind down and get nourished with a salu-salo spread at my table. Salu-salo is a festive, Filipino tradition of celebrating by gathering and eating together. I hope my guests leave the farm feeling refreshed and inspired. In this women-led, Filipina owned small business, I believe that no matter who and where we are, creating magic and growing joy is right at their fingertips. Part of my work is the advocacy for an eco-conscious lifestyle and inspiring others to turn their lawns into garden beds. 

I hope that our garden provides respite from fast-paced city living. We are located about an hour’s drive away from the centre of Manitoba and 20 minutes from the closest town – Steinbach, Manitoba. It is in Treaty One territory on the traditional territory of the Anishinaabe, Cree, Oji-Cree, Dakota and Dene peoples and the homeland of the Metis Nation.

SC: Speak to your experience with finances and funding in your business – was it something that scared you? What were your biggest worries or anxieties associated with money?

LS: Yes, it is something that intimidated me, worried me and even caused me anxiety. Even before I started writing my business plan in 2020 one of my main worries was if I would be able to get my credit score up at all. Because if I didn’t get my credit rating up, I wouldn’t be able to get the funding to start up my business. Long story short, I got my credit score up and ended up getting the funding I needed but then my fears shifted to “Will I make enough business to pay it off?”. Worries always find their way into my head! It also felt like a very grownup decision. Those were my biggest fears and where the intimidation was coming from.

SC: In 2018 you took a course to equip yourself with the knowledge to run a flower business, but quickly realised it wasn’t feasible with just Manitoba grown flowers. Beyond a gut feeling, walk us through how you realised this before you were in too deep and it was too late.

LS: 2018 is when I decided to register Masagana Flower Farm as a business. At that time I was working as a flower buyer for a wholesaler company and we were importing flowers from around the world – I was mostly involved with the supply chain aspect, buying from Colombia, Ecuador, all over South America and bringing them to Canada. At the same time in my life, I was really into the Slow Food Movement. So one day it dawned on me while I was buying flowers internationally – the entire premise of the Slow Food Movement is connecting people who grow their own food – is there possibly a Slow Flower Movement? Funny enough, there was. So after that it was no longer about the pretty flowers I could make and grow, but rather it became about the search for flowers with a lower carbon footprint, grown with the landscape and workers in mind, and a clientele that serves and shares my values. This is when I flipped the script and became purposeful in my craft, firm in my convictions to work with local resources, and believed clients and business would follow. I really wanted to live in the intersections of my passion, my purpose and my values while also honing in on something I was really good at.

I wrote my business plan throughout the 2021 year in the midst of the pandemic, and by this time I knew that I wanted to explore how this flower farm could be a viable year-round business in Manitoba’s short growing season. Two years previous to this I learned about eco-printing at a fibre farm not very far from my own farm. At this fibre farm they raise their own sheep, shear them, make yarn from the fleece that they gather, and then colour the yarn from flowers they grow. This was a lightbulb moment for me – hey, maybe I can still operate a seasonal flower farm in Manitoba but I need to diversify my offerings to include natural dyeing. So I continued to grow flowers and in 2020 I started to play around with the colours from the flowers we were growing, and in summer of 2021 we began offering the experiential tourism experience to guests. This experience is a natural marriage between two of my passions – growing flowers and inspiring others with different, unique uses for the flowers they can grow in their own green spaces.

Also in 2021, I happened to hear about a pilot program for creating new experiential tourism in my region. It was spearheaded by my rural tourism organisation called Eastman Tourism. Through this program, they really helped me solidify how I could pivot to an agri-tourism business model. This became an integral part of my business plan – it helped me to confidently pivot into something that has not been done before in Manitoba or, I dare say, in Canada.  

Eager to learn more about feasibility & business planning? Explore from Scotiabank: Featured Resource: Is Your New Business Feasible?  Before you launch, step back to make sure the elements to succeed are in place. Featured Tool: Business Plan Writer.   The most important user of your business plan is you. Use this interactive planning tool to create your custom business plan.

SC: How did this realisation change Masagana’s trajectory, specifically in terms of how you run the business from a financial planning and management perspective?

LS: What helped me write the business plan and project cash flow was an online workshop by Futurpreneur. That really helped me write a good business plan and then their cash flow template became my tool in planning my revenue generating activities. Then with Eastman Tourism, one of my favourite things about the pilot project is that they helped me calculate the true cost of the Tinta experience – it really informed me about the selling price of what is now my main income generating business activity. It helped me feel like numbers can be your friend, as opposed to something that would continue to intimidate me. It puts things in perspective – that finances are a part of my entrepreneurial journey and that it doesn’t have to be so scary. Utilising those tools and having access to mentorship helped me feel confident in pricing my products and services according to the value that I can deliver to my customers and guests.

Want to learn more about financial planning and management? Explore from Scotiabank: Featured Resource: Set Your Business Up With This Checklist. This checklist will help you get set up properly and make sure everything is compliant with relevant government regulations before your new business gets started. Featured Resource: Understand These Tax Regulations Before You Start Your Business.   Whether you intend to have an accountant handle your taxes or you plan to take care of them yourself, it’s a good idea to take some time to learn how taxation in Canada works for small businesses.

SC: You subsequently pivoted to expand your services to include natural dyeing. How did you go about market research and calculating demand for this?

LS: I actually don’t have a textbook answer for this. It was a combination of inspiration and following a gut feeling. I have a love-hate relationship with social media, just like many other small business owners,  but it was actually Instagram that helped me discover other natural dyers across the world. One winter it led me to this farm in Indonesia where they offer three day natural dyeing retreats. Guests stay at their farm, they feed their guests with food grown at the farm, and almost all the materials they use are sourced locally.. That really amazed me and helped me to imagine how I can offer something like that here in Manitoba – that was the second light bulb moment for me and the creation of Tinta Experience began.

Like I said, I don’t know of anyone using the exact same business model that I am with the flower farm, natural dyeing, and tourism aspects all combined. It ended up being a combination of that inspiration, just trying it out and feeling like people were hungry for something like this.  I think what contributed to the success of the Tinta Experience was its timing. We were at the height of the pandemic two years ago and we couldn’t really go outside our provinces yet, let alone fly elsewhere, so Manitobans were really keen on checking out places and events within the province and a lot of them supported local business and new tourism offerings like mine.

Interested in market research and validation? Explore the following from Scotiabank: Featured Resource: Easy and Effective Market Research.   Good market research will help you better understand what customers want to buy, and what they’re willing to pay, putting you in a better position to be their preferred choice. Featured Resource: 5 Ways to Understand the Competition.   The more you know about your competitors, the better you’ll get at running a successful business.

SC: I know you said that you don’t have a “textbook” answer for this, but when working on a service offering that didn’t really exist in the exact format you envisioned the steps you took are market research – doing the work and going to the farms and seeing what worked and what didn’t, researching competitors and others you admired, and getting connected with an industry specific support organisation is a great way to set yourself up for success. It sounds like you did the legwork to build your foundations and then dove into the specifics of the business plan, cash flow forecasting and feasibility.     

LS: Yes, exactly. I’ll also add that I’ve found a real difference in brand storytelling. A great business idea, financial projections and forecasting are very important of course, but so is how we present ourselves and our brands to customers. My website and the way I host the TINTA Experience is sprinkled with my personality – it really comes from what gives me joy. One of the reviews that I got this year said that they felt like they are family. How I host strangers is exactly how I would host family and friends, and I think that the lived experience of my guests with me at the farm makes a big difference.  

SC: Agreed, there are so many different factors at play when it comes to your industry along the intersections of tourism and hospitality.

LS: Yes, and in any industry there is always a trial and error process – I think it’s important we normalise that. With the Tinta Experience I was fully prepared to have to tweak it, make adjustments, or fully remake the entire thing – but that was fine as long as I was prepared and protected while doing it. The first year I offered it was in summer 2021 and I had 81 guests in the six week period it was on, so that was vital information I included in my business plan.    

SC: Great point – iteration is always important to plan for. What is your method for estimating/projecting costs and expenses, versus revenue? How do you protect your business?

LS: Regularly visiting that cash flow template – the forecast that we did for a given year and also looking at the new numbers for the current season to help us plan for the upcoming year. Checking on my costing formulas for the products I am putting out there – the silk scarfs or tourism experience as a whole – is also big. Another is weekly mentor calls. It’s so important to be honest about what is going on not only in terms of the business and the projections, but the feelings around it as well. For me it has been really important to process with someone else.

Going back to the costing and the numbers, I have created an Excel file for calculating my costs in order to achieve the profit margins that I want to – that helps me apply the markups that I need to. It has helped me build my confidence when putting new prices out on my website because, ultimately, those decisions were based on numbers. It’s a nice feeling to know I am charging the true value of my products and services.  

Interested in estimating expenses and protecting your venture? Explore from Scotiabank: Featured Resource: Start Up Costs for Business.   Every business is unique and will have their own start-up costs. Featured Resource: Saving to Startup.   Use this article to learn how to calculate your start-up budget and make a savings plan you can live with. Featured Resource: How To Protect Your Business Idea.   Starting a business begins with a great idea, so it’s natural to worry about protecting it. Here are some suggestions to help protect your business idea.

SC: One of the Startup Day 2022 keynote speakers said – as I’m sure you are aware because you were there – women entrepreneurs undervalue themselves regularly and advised them to double their monetary amounts when asking for funding. I’m sure it’s all too common in pricing as well, so it’s a great system to regularly revisit those pricing formulas and make updates. 

LS: Yes, it’s crucial – especially now. It’s so important we keep an eye on the markets we are in, evaluate cost of materials, inflation rates and so on, and then make adjustments so our prices and profit margins reflect this.

SC: So is a reevaluation of your pricing something you do annually, quarterly, more frequently? How often do you look at those numbers? 

LS: Good question. It entirely depends. Typically in forecasting I look at it annually but things can change fast and opportunities come along so adjustments are made whenever necessary. For example, if I have a market coming up I will take into account the demographic and spending habits of the customers at that particular market and then adjust pricing before tagging the products.  

SC: What advice do you have for other founders when building, and iterating, a realistic business and operations plan?

LS: I think based on my own experience facing your fears is the only way through the uncertainties. We can be intimidated, worried and anxious but I think we can not move past those feelings if we’re not doing anything about it. It’s okay to have all sorts of feelings around money and the uncertainty of it, especially if your business model is new. But, at some point, you have to decide when you want to take the next steps. You know, failure is a part of entrepreneurship and sometimes failure is the only way to learn. Take a look at where your entrepreneurial skills are at, be honest with yourself, and then be laser focused on what you want to achieve.

It also really helped me to surround myself with mentors, like minded people, communities and networks that encourage me when things are tough and will be there to celebrate with me when things are good.

Interested in accurately planning for success? Explore from Scotiabank: Featured Resource: 5 Ways to Get Your Business Off the Ground.   Successful entrepreneurs understand that behind every great business idea is extensive research and sound planning. Here are some ways to start planning to get your business off the ground.

SC: If you could talk to your younger self about the anxieties surrounding money and financial management you discussed above, what would you tell her?

LS: The young Lourdes will need to get to the bottom of her fear of money. I hope that I talk about it more openly with people that I trust. I think that is the only way to change her relationship with money and finances. She will need to learn that money is a tool for reaching her goals, but she also shouldn’t let it define her. In her life she did have bad credit at the beginning, but there are always ways to turn things around and she will. If she has a plan and believes in herself, she will get to the other side and will be equipped to grow her business.  

SC: Why is financial literacy crucial for founders to get a good grasp on early? How does it give you a competitive advantage? 

LS: Financial literacy is one of those tools that you need to move your business plan forward. Once you get over that fear, the numbers are actually there to help you make informed decisions. That’s actually what happened to my business. I’ll be honest – I have certain flower crops that I love seeing in the garden but I had to let some of them go because they weren’t good for my bottom line. For example, my tulips. When you plant tulip bulbs, as a flower farmer, your investment is literally buried in the ground for seven months of the year in Manitoba. So this year I had to remove them from next year’s crop list and focus on other products that were a good return on investment. How did I have the courage to ditch a product? By looking at my numbers and realising I needed a much faster ROI and this particular crop wasn’t doing that for me.   

SC: What’s the most actionable piece of advice entrepreneurs can take from this conversation and implement in their businesses immediately?

LS: Revisit your costing file. If you don’t have one, make one. Are you pricing your products or services properly? Because if not, you have to do something about it. Once you fix it and implement it, tell yourself that you are worth it – you are worth every penny. 

SC: Any other words of wisdom before we go? 

LS: I just want to encourage women identifying business owners to live out the intersectionality of their own passion, purpose and values – just try it out. Like I said in this interview, sometimes failure is just a part of it. You can define success in your own terms and I encourage them to live out their truths and show up unapologetically in their business. 

SC: Thank you so much for your time today, Lourdes!

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