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This summer is well underway, and while some people might take these warm months as a time to just relax, we have a few readings that may benefit your business in the coming months. Call it summer homework.
1. Women-led startups are better investments
In Canada, just five per cent of tech companies have a solo female founder. Not a stellar number. If companies with male and female co-founders are factored in, that number only jumps to 13 per cent.
A new study out of the U.S. this spring shows the size of this lost opportunity. Businesses founded by women ultimately deliver higher revenue — more than twice as much per dollar invested. “For every dollar of funding, these startups generated 78 cents, while male-founded startups generated less than half that — just 31 cents,” stated the report, authored by the Boston Consulting Group in partnership with MassChallenge, a network of incubators providing support to startups.
What makes women a better investment? Female founders and their presentations to potential investors are subject to more challenges and pushback, which sounds bad, but on the upside, women are more likely to accept challenges as legitimate feedback to improve both their pitch and their product. The study also found that male founders were more likely to make bold projections and assumptions — overpitching and overselling — while women were more conservative and realistic. Finally, for products and services marketed to women, female founders have a better knowledge and understanding of their customers’ demands.
- Related video: Why diverse teams are better»
“By understanding the kinds of biases that put women at a disadvantage, VC [venture capital] firms and investors can make more objective funding decisions,” stated the report.
Takeaway: To the women out there thinking about starting a business, the fact that female-founded businesses deliver more revenue than male-founded startups as investments is a stat you may want to keep in your back pocket the next time you’re looking for an investor.
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2. New regulations coming for food companies
The Canadian government is about to roll out massive changes to the country’s food safety regulations. And many small food businesses may find themselves spending more time and money to meet the new requirements.
The Safe Food for Canadians Regulations is expected to take effect in January 2019. It provides national standards for food and beverages, replacing separate rules for dairy, meat, ice wine, fresh fruit and vegetables, and other products. Food businesses that import or prepare food for export, or to be sent across provincial or territorial borders, will now need licences. They’ll also need to be able to trace suppliers, even those in other countries, just in case unsafe food ends up on our store shelves.
Businesses with sales exceeding $100K will be required have a written preventive control plan that explains exactly how they will keep their products safe. There are some exemptions for smaller business that don’t sell outside their province.
The Canadian Food Inspection Agency has created interactive tools for businesses to determine whether they’ll need a licence or a prevention control plan.
Takeaway: Make sure your food business is prepared for the January 2019 deadline.
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3. Going green saves money
There is a movement afoot to teach small- and medium-sized enterprises (SMEs) that reducing their carbon footprint looks a lot like reducing costs.
About five years ago, several customers of Burnaby-based BC Comfort Air Conditioning — which designs, installs and services HVAC systems — started asking the company if it had a climate-mitigation strategy. “We really didn’t have one,” said president Robert Noel. “The thinking was that going green was more expensive.”
After enrolling in a program that works with SMEs and other organizations to reduce their greenhouse gas emissions, Noel discovered that his conscientious customers were onto something. The company did its first energy audit in 2012, and since then has been able to reduce fuel consumption by 25 per cent and paper use by 41 per cent, delivering an annual savings of $57,000. Not bad for an operation of fewer than 100 employees. They found that the more they reduced their carbon footprint, the lower their operating costs were.
The biggest savers
- Switching the fleet over to smaller vans is easier on fuel and, as a bonus, easier to park.
- Using GPS for navigation streamlines routes and cuts down on time spent looking for addresses.
- Replacing incandescent lights with LEDs at HQ cut energy costs, as did insulated bay doors, doubling the wall insulation and installing a new more energy-efficient roof.
- Using an electronic document management system, which has technicians using iPads, has dramatically reduced the amount of paper used.
None of the upfront costs exceeded $200,000.
The one effort that was something of a disappointment? The organic recycling program. “It’s hard to recycle food waste from a small office,” said Noel.
Takeaway: Even if your business doesn't qualify for government incentives, going green is good for the environment and your bottom line.
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4. Sleep tight, think better
Entrepreneurs who get a good night’s sleep and let themselves recover from the stresses of running things are more likely to experience enhanced creativity the following day.
That’s one of the findings from researchers in Germany and the U.K. who studied the flexibility of entrepreneurial creativity. The researchers had 63 entrepreneurs keep a diary of their daily creativity and work-related problem solving over 12 days. The researchers interviewed them and assessed the quality of their sleep through monitoring devices they wore on their wrists at night.
The study found that an individual’s creativity varied greatly over the course of the week. The more recovery time they had, the more creative they were likely to be.
- Related read: New ways to help your company break out of a rut»
Looking for an outside-the-box creativity solution? The study also found that entrepreneurs generate more novel ideas when they reflect on solving problems outside of working hours.
Takeaway: Get some sleep! Prioritizing rest can boost your creativity and will ultimately benefit your company.
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5. The new trend in loyalty programs
Customer loyalty programs have come a long way since the “buy 10, get one free” punch card. Loyalty apps are everywhere and many point of sale solutions have some sort of loyalty program — points, gift cards, cash-back, promo codes — built right in. But is a loyalty program right for your business?
“You have to take two steps back and decide what you want to get out of it, because you don’t want to just do it for the sake of doing it,” said Darryl Julott, program manager at Digital Main Street, a service that helps Toronto bricks-and-mortar SMEs get online. “I’ve seen such a huge increase in the number of programs and providers … and it’s easy for SMEs to get confused about what will be valuable for their business.”
For example, while a good loyalty program can provide more data about customers, unless there’s a plan for managing it and using it properly, “it can almost be a disadvantage,” said Julott, because of regulations for handling personal data.
Team up with local businesses
One big trend now is neighbourhood loyalty programs, where a multiple businesses pool their resources to create incentives to shop in their area. But Julott warned that such a program needs to wow consumers right out of the gate: if some businesses aren’t participating or if the offers aren’t fresh and intriguing, then nobody’s going to open the app, let alone download it. “You need a very general, points-based system that applies to everyone,” he said.
Takeaway: Loyalty programs aren’t always beneficial. Research to find out what type of loyalty program would best benefit your business.
Paul Gallant is a Toronto-based journalist and editor who writes about Canadian small- and medium-sized enterprises, international business, urban development, travel, technology and social change. His work has appeared in The Globe and Mail, the Toronto Star, Canadian Business, The Walrus and many other publications. He is executive editor at BOLD, an international travel magazine for Canadians.