The Journey of the Do – Stage 3 – Banking and the Product

You can choose to follow this stage by stage, or you can find your own way. Either way – just do what you’ve set out to do. You’re one of the 5% who is taking an idea and putting it into action.

If you need a refresher on Stage 1 (idea to action) and Stage 2 (testing and research) click the corresponding link.

This week we’re really getting into it. This is is the part where you’re going to be spending a bulk of the money, but you have to spend money to make money. By this point, my wife and I have spent under $1000 on the business. This is a venture wholly funded by ourselves, and we’ve set a distinct budget, and timeline for sales. We’re not spending more than $5000 on product (your number may vary), and if we don’t see a steady growth in sales over the first month, we’re going to cut bait.

Your sales cycle may take a bit longer, but either way you should have a date set for an out. I’ve seen SOOOO many start ups keep thinking they’re going to make it, and they burn through money with no real exit plan. Set a date, a realistic expectation of sales, and if you don’t hit it. GET OUT! Or pivot to something else.

Banking

You should probably have a relationship with a bank for your business. For whatever reason banks don’t take too kind to small businesses. Banks like to see a track record of growth before they start handing out loans, etc… However, there are some options out there for the little guys. If you’re only going to be conducting business in one province you may want to check out your local credit unions. They offer some great products, and services you won’t find at a major bank. However, they are somewhat behind when it comes to technology. Do your due diligence, and set up meetings with numerous banks, and credit unions to see what they can do for you when it comes to a business bank account.

My wife, and I have settled on RBC and their e-account. As the majority of our transactions are going to be online this was the best fit for us. Plus, we’re going to be conducting business across Canada (at least selling nationwide), so a credit union didn’t make sense. The credit unions even told us a national bank would be better for what we’re trying to do. Again, we wouldn’t have known this unless we set up meetings, and asked questions. SET UP YOUR MEETINGS!

Product

Kids sweater, sweater

I’ve always been fashionable.

You need products or a product to sell (whether it’s a service or an actual good). This is where the bulk of your money will go. We’ve contacted numerous wholesalers in the US, and Canada regarding their goods. If you have to go through wholesalers, just Google “Clothing Wholesalers” or whatever you’re interested in selling. If you’re developing your own product, then my suggestion would be to find 3 potential clients, whether their friends, family, etc… and test your product or service on them. Do your homework to see if your idea is going to fly. Really focus on Stage 2. In my case – my wife and I know there’s a market for our products. We still did our testing, and research (and continue to do so), but we didn’t have to do as much.

If you’re importing goods you’ll need an import/export number from Revenue Canada (remember US fans – I’m Canadian). Go to the CRA site or search “Import/export number.” Another thing to keep in mind – the dollar. With the Canadian dollar where it’s at my wife and I are trying to go through as many Canadian wholesalers as we can. If you’re importing goods from the US, you may qualify under the NAFTA agreement where you don’t have to pay a duty. Talk to your wholesaler(s) about this. On clothing – you’re probably going to pay a duty which is 18%. Plus you have to factor in GST (and HST if outside of Alberta), and shipping. My wife and I have figured we’d have to add about 40% to the wholesale cost if we import from the US (based on taxes, and duty fees).

My wife has really taken the reigns on the product side of things. Here’s the kicker – we actually have a plan when it comes to the product (get ready marketing people).

My wife, and I have a woman in our minds every time we look at product. She’s a late 20’s professional working in an office building downtown. She’s a 9-5er, and she likes to go out every now, and then. She wants something she can wear to the office, that doesn’t make her look like a skank while still having personality, and she can wear the dress, shirt, jacket, etc… out for drinks after work without looking and feeling like a stone cold business person. Every time we come across an article of clothing we always ask, “Does this fit into her closet? Does it have the personality of this woman? Would she really wear this?” If the answer is Yes, we get it. If it’s No, we don’t. That’s how focused we are on the product side of things. This focus is also what’s going to aid in building our brand (and your brand if you follow this strategy).

Next up – The Brand!!!!

Love you,

Jordan ‘The Guy with the Bow Tie’ Rycroft

Ps. So far we’ve spent about $1000 on product. That brings the overall total close to $2000 in biz expenses.

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