Scotiabank Financial Literacy Campaign 2023
*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.
Barriers surrounding financial management are consistently top pain points for small business owners in Canada. Throughout November, in alignment with Financial Literacy Month, Scotiabank and Startup Canada will be breaking down key aspects of this complex, often overwhelming hurdle many early stage founders face. Through the curation of tailored financial resources, the case studies of leading founders, and the expertise of applicable support organizations, we can work together to empower more entrepreneurs in Canada with the financial know-how and tools they need to succeed.
This month-long series will break down four topics critical to the financial literacy and wellness of early stage entrepreneurs:
- Accessing Government Grants for Your Business
- Funding for Black Entrepreneurs in Canada
- Finding The Right VC or Angel Investor
- The Importance of Business Advisors
The Importance of Business Advisors.
According to the 2022 Startup Canada Census, 44.6% of entrepreneurs do not know what financial support programs and channels are available to them – forcing the average founder to spend over 530 hours conducting their own foundational research. The good news? There is an engaged network of professionals across the country who have dedicated their careers to connecting the dots for founders.
For the final segment of the 2023 Financial Literacy Campaign, Startup Canada explored the importance of business advisors with Yamila Franco and Mike Conklin. Yamila Franco is a serial social entrepreneur and financial educator via her most recent venture, the National Financial Literacy Campaign – a network of professionals working to promote financial inclusion and awareness across North America. Mike Conklin is a Senior Small Business Advisor with Scotiabank, dedicating his career to empowering Canada’s entrepreneurial community through reliable, informed and tailored advice.
The Role of a Business Advisor:
SC: What is the role of a small business advisor, Mike?
MC: A small business advisor is there to guide and advise our clients in all things related to business banking. This can be everything from opening their first business account, to helping our clients with complex financing needs such as purchasing an existing business, or even helping a founder become an entrepreneur. We are here to help guide the client through many different steps in the business startup phase. We can also help introduce them to other professions that they may need, such as accountants and lawyers. All of these professionals, including your banker, are important pieces to the financial health of any small business.
SC: Yamila, can you tell us more about your role as a financial educator and social entrepreneur?
YF: The reason I became a financial educator was, number one, as an entrepreneur and as a woman in business, I realized finances were my biggest challenge. Number two, I didn’t see a lot of people like myself who were also in this industry. Most people in my community, even people born and raised in Canada, don’t understand core financial fundamentals – they don’t understand money management, investing their time and money, and so on. That’s what led me to my role.
I’m part of the National Financial Literacy Campaign, and I’ve been an entrepreneur for about ten years now since I first came to Canada. But my true love and passion is that I can impact people’s lives by helping them understand and navigate the Canadian financial system – how to save money, how to make more money, how to make informed decisions. Those things will have a generational impact down the line. It’s part of the legacy I want to leave. I believe that if we do business, it should be business that will eventually leave the world in a better place. What’s a better way to do this than to empower people to make informed decisions that empower them to be financially secure and independent? This, in turn, can lead to more social impact businesses, mission-focused programs and community initiatives – it’s all part of a cycle of continuous, better change.
SC: How does Scotiabank support entrepreneurs in the area of financial advising? What can founders expect from you?
MC: Entrepreneurs are the risk takers and the true innovators in our communities. We support entrepreneurs by allowing them to continue following their dreams while adding some structure and processes. We work with our customers to help them understand the policies we have and to help them build a healthy financial plan for their business. We also have many specific programs at Scotiabank intended to help entrepreneurs that fall into certain categories. For example, we have the Scotiabank Women Initiative, we have startup companies through our franchising division, agriculture specialists, healthcare professional specialists, and skilled trades, just to name a few.
As a former small business owner myself, I understand that most clients always have their business top of mind – they think about their business from the time they get up in the morning until the time they go to bed. Understanding the client’s business enables me to perform a thorough review of their business banking needs. Not only do I advise clients on the appropriate in-branch products and services they should utilize, but I also use Scotiabank’s many different specialists. We also have cash management services and Scotia Wealth Management, to name a few more. Scotiabank also has many strategic partnerships we can tap into to assist our clients.
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SC: What are some ways entrepreneurs can determine their ideal advisor? What factors should they consider?
YF: What I needed, especially when starting out, was empathy. I needed to find somebody who would actually understand where I was coming from. Again, if you’re looking for advice on growing a company and fundraising like I was, friends and family are often not an option.
A common understanding or shared lived experiences was really important to me. It was also important that they understood my values. Culturally, I make decisions, and I include my family in them. In an advisor, I look for shared values, and the biggest one is trust. Another factor I considered and decided to lean into was that you could also find advisors not affiliated with a specific financial institution. You can find people who work with multiple institutions, and those people can help you open doors that you didn’t necessarily know were available before.
When is the Right Time to Onboard an Advisor?
SC: For yourself, and other businesses you’ve worked with, what have been some of the key signs/moments that you needed a business or financial advisor, Yamila?
YF: I’ll begin with my own experience. My first company ever was in biotech and clean tech. My approach to business, at that time, was to just jump in and figure things out as I went. However, it turns out that business is really expensive. A big triggering moment was, honestly, when I found myself $20,000 in debt – I didn’t have a credit history and was new to the country.
I was referred to someone who was hosting financial literacy workshops and immediately felt how welcoming and open the group was to what I needed at the time. I needed a sense of comfort, a sense that I wasn’t the only one struggling or needing to ask questions.
Everybody wants to look like they know what they’re doing, but I’m pretty sure most people don’t. I came to understand that having people in my network who are financially secure, independent and knowledgeable would only be a benefit to me.
When somebody doesn’t understand taxes, wealth transfer, wills, power of attorneys, etc. what are they even going to ask an advisor? How are they going to look for help when they don’t know that help exists? That’s a big part of my current role – starting the conversation and creating curiosity in people.
SC: When is it time for entrepreneurs to onboard the help of an advisor? Are there any indicators?
MC: As early as possible! Moving from a founder to an entrepreneur means that the client is ready to put their idea in motion. I have tips and tricks that will help my customers in different scenarios, such as a startup business looking for a low-cost bank account or an established business that either needs a quicker way to process payments or better options to execute their payables.
How to Best Leverage Your Advisor:
SC: Mike, how would you recommend that entrepreneurs best prepare for a session with a small business advisor to leverage their time best?
MC: I would recommend that entrepreneurs come to the initial meeting with an open mind, an appetite to learn, and a clear idea or plan of what their business model will be or is currently. We can help the entrepreneur with a business plan if they don’t have one already, but an entrepreneur bringing a business plan to an initial meeting is a great indication that they have done their due diligence as far as market research.
The other thing is they should come thinking, “what will my business look like in one year?” We’d like to get an idea of what they perceive their business would be looking like 12 months from now and also five years out – when they’re through the startup phase and possibly into the growing stage.
SC: What types of topics and business areas can small business advisors help founders with? For example, is an advisor solely for funding-related inquiries, or can they ask about business development, wealth or other areas?
MC: We can help founders in a variety of ways. We can start with simple education on the different day-to-day business bank accounts, a simple business visa card, or an operating line. Are advisors fully related to funding inquiries? No, we can also help them with creating a business plan, we can help them with business development and growing the business. We have Scotia Wealth, where we work very closely with our partners to determine if that would be a good fit for our business customers, and, again, that reliance on our specialists as well. What a founder can get directly from me at a branch is not only the products and services that we offer here, but access to all of the different services and specialties that Scotiabank offers as a whole.
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SC: Yamila, how have you and the entrepreneurs you’ve worked with leveraged financial advisors?
YF: With my work, we focus largely on education – and one thing I have noticed is that experience and insight are lacking. So, someone might understand different account types, tax strategies and so on, but they may still lack the experience to really make sound decisions. Apart from initial education, it then comes down to “how does this apply to me?”. Somebody with experience – an advisor, a financial professional or an agent – can help you connect the dots and consider the education application, while also weighing what is best for you.
For me, this looked like telling a professional about my specific circumstances and goals – I want to be able to support my family in the form of time and money. If you’re coming from a remote community, a certain demographic, or anything in between, it’s the same experience – someone who knows where you are coming from will be better able to help you succeed with the support that’s available to your specific community.
SC: What’s something entrepreneurs should consider asking a small business advisor that not everyone does?
MC: I would advise that the entrepreneur asks what we recommend. They should come to the meeting open minded, with an appetite for advice, and a reliance on the experience of the small business banker that they’re sitting in front of. The client knows their business inside out, and bankers know the business banking space the same way. So, together, we should be able to come up with a smart solution and a plan to implement it into action!
How is Small Business Advising Changing with the Needs of Founders?
SC: Mike, in your opinion, how is the area of small business advising and the needs of entrepreneurs changing?
MC: With COVID-19, we faced a higher reliance on remote consent as far as a way to execute credit agreements or any other types of bank documents that need signatures. COVID-19 also gave us the ability to learn, very quickly, how to get things done in a remote environment where the business owner may not be able to come in and sit down.
The change, as a result of that, is that we have a much larger reliance on online banking. Scotiabank has a platform called ScotiaConnect, which is digital banking that is quite a bit more secure than what the typical online banking program would look like. It also gives the client many different options as far as being able to run their business remotely from anywhere. We can also put the customer in touch directly with our specialist teams.
These platforms save a lot of time. As an entrepreneur or small business owner, their time is money. So the less time they can spend sitting in their banker’s office, the better – that way they can devote more time to the needs of their business.
SC: How is Scotiabank evolving with these changing needs to best serve small business owners?
MC: Scotiabank is becoming much more fluid as far as being able to respond to a customer’s inquiry, whether it’s for a service related issue or a product, we are able to execute a lot of our tasks by way of E-signature or remote consent.
Scotiabank is always looking at ways to improve their services as well. We try to stay on top of the needs of all our clients. For example, we partnered with a Merchant Services company, which is the largest payment processor in North America. With them, we offer some very competitive solutions for handheld devices in order for our customers to be able to accept payments on the go.
Referring back to ScotiaConnect, which is our digital banking platform for business. It offers users much more as far as online-enabled services – it gives the business owner the ability to do bulk payments by way of electronic funds transfer, they can manage their payroll, they can do direct deposits with their tenants, and so on.. It’s an ability for the business owner to really take charge of their own affairs.
Another thing we’ve done, and this is due to COVID-19, is connecting our small business advisors in different parts of the country who will work together to ensure the customer’s needs are satisfied. That could mean that a Halifax-based advisor could contact their counterpart in Calgary to assist with a client. The old bricks-and-mortar perspective of the business owner comes to the branch to do all business is done – it’s out the window. So, not only do I rely a lot on our specialist advisors, but also on my small business advisor counterparts throughout the country in order to help our clients in the best way possible!
Other Considerations:
SC: What advice would you give to entrepreneurs seeking a financial advisor service or relationship, Yamila?
YF: Many people, today, go online and are faced with marketing and advertising relating to financial expertise. To me, this is intimidating – how do I know what’s real? I really believe in referrals as a way of connecting with a financial advisor. I will go to somebody that I respect and ask, “Can you connect me with the person guiding you and helping you make financial decisions?” or “Who do you access when you want to understand insurance?”.
Also, while parents and other non-formal advisors are great at times, I would recommend seeking referrals that are licensed professionals in your industry. The finance space changes very quickly – an industry professional will be up to date on those elements.
SC: Are there other organizations you have accessed in your business advising journey?
YF: I’m a big believer in supporting local and building our local economies. We tend to go towards the biggest organizations for support – likely due to their scale of marketing – but forget that great networks exist locally as well. My first piece of advice would be to find what is local to you and get plugged into that community, as this can also help with client referrals and contribute to your regional economy.
My second piece of advice would be to explore mentors. One mistake I made with my first company was tapping into too many different places of support. In doing so, I felt like I had no time to really dive into the full suite of their programming and services.
SC: Mike, would there ever be a need for an entrepreneur to have multiple business advisors? If so, what might that circumstance look like?
MC: Certainly – we have what’s available at Scotiabank, and we have a number of different specialist advisors as well. If we have, for example, a dentist who is setting up shop in town, I’d be more than happy to sit down with them, and we would get their day-to-day banking needs fulfilled. But our healthcare specialists also have access to different products and tools where they are more accustomed to helping a dentist build a practice or purchase a practice. We would have a situation where I could be their main conduit to their business banking, however, there is a great symbiotic relationship that we have where I rely on the expertise of specialists. Basically, in the end, it’s all about helping the client and making sure that we are able to give them the best advice possible.
SC: Are there any other pieces of advice you would like to share with those reading this piece, Yamila?
YF: My main piece of advice – as I know this will be read by business advisors, founders, and aspiring entrepreneurs alike – is to remember that, regardless of titles or licences you may hold, we are all people at the end of the day. To succeed, we need to know each other and hold empathy for each other. I find that when life gets busy, we forget to connect. We literally forget to consider and understand other people’s needs.
This concept is particularly applicable to social impact businesses. My organization, for example, supports a lot of charities around the world in the form of donations as part of our social impact initiative. The hope is that our social impact will create more accessible opportunities for others in the future. In circumstances like this, your advisor needs to be on board with the social impact element. From the perspective of social impact, we can’t use the same measurements of success as a more traditional business because we are missing a lot of the picture and a lot of the story – but both can be profitable and successful, especially if your advisors are on board with this vision and purpose.
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