Business financing expert Michael Yasny reveals what most new owners get wrong, and how to fix it before it costs you everything.
GROWTH PILLAR: Sales & Revenue
WHO THIS IS FOR: SMB owners / Solopreneurs / New business owners / Leaders building systems
WHAT THEY'LL GAIN: Real financing strategies, the team of three every business needs, and the cash flow decisions that keep your doors open.
Most new business owners don't run out of ideas. They run out of money — and they never saw it coming.
Michael Yasny has spent decades helping new businesses, growing businesses, and businesses in financial trouble find financing they didn't know existed. In this Canada Growth Network session, he breaks down exactly what it takes to set up a business the right way — before you open the door.
Michael covers the team of three every owner needs on day one: a corporate lawyer, a business accountant, and a business advisor. Not a coach. Not a general practitioner. The specific people who understand commercial documents, tax setup, and alternative financing.
He explains why you should incorporate on day one — and the one question you ask your accountant to find out if they're worth keeping. He walks through how family financing works, what a real loan structure looks like when you pull equity from your home, and why asking for less money than you need is one of the most dangerous things a new owner can do.
Michael also covers pricing strategy, what happens when you try to grow too fast into big-box retail, how to handle supplier disputes without burning relationships, and why paying your team more often costs you less.
This is a practical, no-fluff session for anyone thinking about starting a business — or anyone who opened one and is wondering why the money keeps disappearing.
Connect with Michael Yasny:
Website: Money Consultants
LinkedIn: Michael Yasny
Books: Michael Yasny on Amazon
— PARTNERS ON THIS EPISODE —
Canada Growth Network — A business community where SMBs and solopreneurs get real connections and access to GoHighLevel CRM for $47/month Canadian.
Profit10™ — Take the free Profit Snapshot and find out what's really holding your business back across ten key drivers.
Property Wizard Podcast with Fred Crouch — Practical real estate and wealth-building conversations for anyone who wants to put property to work.
Next Steps
Michael (00:05)
So ⁓ we're gonna discuss what goes into starting business
Michael (00:08)
a business.
Well, obviously first you have to have an idea and you have to have an interest in some business. Be passionate about that business before you even get into it. You have to have the passion.
Michael (00:10)
I first
Michael (00:14)
But you need to
Michael (00:19)
Why do I say that? Because I got a very
Michael (00:20)
That's a
strange question asked.
Michael (00:22)
Asked
me by a group that I was going to speak to before, and they sent in questions. And one wrote, Do I have to be passionate about?
Michael (00:26)
One person
Michael (00:28)
about
the business I'm going into.
Michael (00:30)
But I couldn't believe somebody would actually
Michael (00:32)
If you get up in the morning excited to
Michael (00:34)
<unk> You cannot survive, you cannot.
Michael (00:37)
Grow.
Michael (00:38)
go
to work.
Michael (00:39)
And so
Michael (00:40)
That's the passionate.
Michael (00:40)
First thing, be about
the business you're looking into. What business you're gonna start, you need to start discussing that business with your family.
Michael (00:44)
Now after you've decided
You need to practice.
It's really important that
Michael (00:50)
That your
family's on side. If they're not on side, you're in trouble.
Michael (00:55)
Because you're gonna have to
Michael (00:56)
Rely
on your family when you start your business. Rely on if you're married, your spouse to earn more money or understand that problem going forward because you need to use that money for your business and you can't take it out.
Michael (00:59)
You're gonna have to re
Michael (01:04)
There's going to be a cash problem.
Michael (01:10)
Your family should know, your children should know you're going
Michael (01:12)
That you're
Michael (01:13)
Miss some events.
Michael (01:14)
sometimes because you're not working thirty five, forty hours a week, you're working sixty, seventy, eighty hours a week on your new business.
Michael (01:20)
And it's really important you're not gonna be
Michael (01:21)
to know you're making
money in the first year.
Michael (01:23)
So things are going to be
Michael (01:24)
tight. So you better be passionate and you better have your family on side. And family in in have those
Michael (01:28)
Now if you're not married
you know, constraint
Michael (01:33)
Points
on your money outside.
Michael (01:34)
From the
Michael (01:35)
Then do you have a fair
Michael (01:37)
family,
your family, your parents, your siblings that will live there almost rent free or rent free, so all your money goes back to your business. You need to find that because cash is king in a business. And if you have to take the money out of the business to pay all your bills, you're not gonna survive unless you have all the money you need to start the business. People don't have
Michael (01:40)
In essence, let you live
Michael (01:53)
You're not
Michael (01:57)
Which most people
Many of you are
Michael (02:00)
Making or developing a
Michael (02:01)
Business
plan for your business.
Michael (02:02)
And that's terrific. However, a business plan will never.
Michael (02:06)
Get you a penny's worth of financing from outside sources such as a bank or other lenders. It will help with families and friends that may lend you money, but it will not help you with a bank. And will prevent you from getting financing if you don't do it properly. At the end of the first year, is making money.
Michael (02:16)
But a business plan
And I see a lot
True.
Michael (02:29)
And I can tell you
Michael (02:30)
Maybe.
Michael (02:33)
But everybody puts it down because they think their lenders want to see that. See that you actually know everything in your expenses. They have financing. Financing nice business. Financing because you have security. You don't have to security. You have to find other financing.
Michael (02:37)
No, the lenders want to see
That you understand real you're not getting bank.
Michael (02:46)
Because you started it.
Michael (02:48)
You're getting back.
So that business plan is going to help
Michael (02:55)
Tell a story of do you understand the business? Do you understand how it's going to grow?
Michael (03:00)
Do you understand all your expenses and and I can tell you most
Michael (03:02)
cost. Most
people don't.
And that needs a
I think is really the most important thing before you open the door. Your team together. Your team is three people. Your team is a lawyer, corporate lawyer, not your brother in law, the real estate lawyer.
Michael (03:09)
And that is putting your
a letter caller.
It's a corporate
Michael (03:18)
commercial lawyer. A commercial has litigation has
Michael (03:19)
lawyer.
Michael (03:21)
Experience
Michael (03:23)
that experience.
Michael (03:23)
experience in their office documents. Whether it's a agreement that you're gonna sign if you borrow money, whether it's cont that you're gonna sign for leasing, how do you understand the leasing
Michael (03:25)
They understand commercial documents.
Michael (03:26)
Merci.
Michael (03:31)
Contracts.
agreements, you need a proper
Michael (03:37)
Lawyer in place.
Michael (03:38)
The second one is you need an account setup.
Michael (03:40)
accountant in place who will help your
business from the accounting point of view. Are all your books ready to go? Do you know how to send in your tax remittance each ⁓ each month, each quarter for HSD? How do you do your source deductions? how you do payroll
Michael (03:44)
All right.
How you set up your business for a shred, scientific research.
Michael (03:58)
and educational development. That's a really important thing in some businesses and you need to set it up properly. That accountant and he's one question you ask the accountant when you're picking accountant. And it's just one question. Now they have to have they have to be a business accountant. They're not just a personal accountant.
Michael (04:04)
So get here's the one.
But the question is this should I
Michael (04:16)
incorporate on day one or should I wait until I get bigger? If they say incorporate, that's your accountant. If they say, find a new accountant.
Michael (04:22)
Wait.
Michael (04:24)
Y incorporation is your first line
Michael (04:26)
Line
of insurance. It takes you away, it separates you from the business and anything that happens that goes wrong with the business unless you specifically give a personal guarantee.
Michael (04:33)
Specific
Michael (04:35)
But if you're sole proprietor, you're giving a personal guarantee on everything.
Michael (04:39)
That
you do, including liabilities, not just signing for rent and things like that. You're often especially some personal guarantees or really explain them to you. Sometimes you have to sign them, you have no choice, such as getting money from a bank. You don't have to sign them with your landlord. And in today's economy, you probably don't have to sign them, you can just say no, because there's a lot of vacancies.
Michael (04:54)
But you don't have to sign
Michael (05:03)
Now the open up the door yet because you have to find financing. That's the next thing on your list.
Michael (05:04)
You've come up with the idea, spoken to your family, you have an open
You're accountant
Michael (05:12)
is not
going to help you generally find the financing, neither is your lawyer generally. Your business advisor is that third person in the group.
Michael (05:18)
That business advisor
Michael (05:20)
Is not a business coach. Business advisor and a coach two different things. A business helps you financing the financing business, not just one area such as leases or mortgages. They've made a living doing it for the last three, four, five years. So it's factoring, purchase order financing. They understand bankruptcy laws, which is really important to understand. And security.
Michael (05:25)
Business advisor helps you understands fun.
They've done everything and they
They understand they
Michael (05:46)
interest and where it works and where it doesn't and how much you should be paying for it too much.
Michael (05:50)
How much is too much and how much isn't too much?
Like in my book, I should now factoring at 45.
Michael (05:54)
So five
percent interest is cheaper than the bank at three percent, apples to apples. A bank the factoring is three percent a month with a yield of five percent. And I four is a lot cheaper than a limited three percent line of credit at the bank, as you're in the business of making money not seeing how much interest you are paying. You want to be fair, you want to grow your business. So
Michael (05:58)
Then we
is three percent a year and the yield of forty-five. I can show you how forty-five percent
So that's where a bus advisor comes in and helps you sort of determine how you're going to try.
Michael (06:21)
Business advisor comes in. ⁓
How much you charge
for your product? Your accountant's giving you the figure out how much you're going to charge for your product. Business.
Michael (06:29)
Numbers you have to
Michael (06:31)
Charge.
Michael (06:32)
Because one important thing it's none of your business
how much your clients will
Michael (06:37)
pay
for your service or your product.
Michael (06:38)
It's only your concern.
Michael (06:40)
in your business of how to stay in business that find a new business.
Michael (06:41)
How much you need to charge in order if nobody will pay you that.
speaker-1 (06:47)
Hmm?
Michael (06:47)
The advisor is going to help you cost order for you to be trying
Michael (06:49)
Deal with big box if you're trying
to sell the grocery chains or Home Depot or any large company like that. Before you give a price.
Michael (06:56)
that because you have to understand you go in and price
what really happens when you sell to one pretty simple straightforward but if you don't know
Michael (07:02)
One these big box stores.
Michael (07:04)
For it.
Michael (07:06)
You're
going to go bankrupt.
Michael (07:07)
And you're gonna go bankrupt because you're gonna tie up all your money with the big box store and you're not gonna be able to have the money where you do make money. So you need that advisor to help you understand what you should be charging to
Michael (07:10)
Big money to service your smaller clients.
understand to that
to Walmart or wherever it may be.
Michael (07:22)
So that's that's really important.
Michael (07:23)
Business
advisor helps you client.
Michael (07:25)
when you can't collect from a client
or when you have a client or when you have a supplier who's demanding money that you don't. This happened during COVID.
Michael (07:32)
Don't have.
It's not just by accident, but COVID brought it to the to the forefront.
Michael (07:37)
I had vendors call me clients that call me up we produce
Michael (07:39)
Yeah, they can't collect. I have
We need the from
our supplier, but he won't sell to us because we owe the money and they want the sixty thousand before they'll ship to us again. We don't out of business.
Michael (07:49)
But that
also hurts the venue.
Michael (07:53)
vendor
because if the client is out of business, the vendor doesn't have one has one less client.
Michael (07:56)
client.
So how do we fix that? How do we work on debt? How do we work with everybody to get back on side? So the things that I did at that time is that I went to the
Michael (08:01)
Everybody.
Time.
vendor and I say listen to pay you but the you can sell to them. Well we don't want to sell to them until they pay us. I say listen business you're not getting paid. Yes
Michael (08:09)
The client does not have money to pay. The client needs you and you
They're
So why do we do this?
Why don't you sell two
Michael (08:21)
The client, COD, invoice by five or ten percent. And over that six, twelve people have bought from you C O D, so no credit worries, you've made a profit.
Michael (08:22)
An upcharge your
And over the next eighteen months, the client will
And they will have paid off the fifty, sixty, hundred thousand dollars they owe you because you upcharge the invoice. Now everybody's happy.
Michael (08:38)
Sometimes
the vendor would say, Well, what if they've stopped paying me? Well meanwhile you sold for six months and you collect debt for six months.
Michael (08:41)
They stop paying you, they stop paying you. Meanwhile, because your alternative was
pay the money to your lawyer, hope they're in business when
Michael (08:51)
When you
get the judgment in two or three years, and there are
Michael (08:53)
Business
to pay you.
Michael (08:54)
Or you can sell right and keep them in business and make money all the way through. Because you didn't make any money while you sued them, you just spent money. That advisor that can come both sides to help you out with laws, that which your lawyer should know and your accountant should know.
Michael (08:59)
Money.
So it's important to have from all
That understands bankruptcy.
But you have to understand these different things to make your business work because everything's going and you can't possibly put together the
Michael (09:13)
work because it's gonna come at you. Possibly know everything. But if you the
proper team, they know everything. And all you have to do is be smart enough each week, each month, them and let know what's going on.
Michael (09:21)
All you have to do each day, each month, follow up with
Every time a document comes to you
Michael (09:29)
My lawyer has to review it.
speaker-1 (09:31)
Now.
Michael (09:31)
It's a great tip to say that because crooked persons looking for you to sign
Michael (09:33)
And I
A person buying something
doesn't want you to go to the lawyer.
Michael (09:41)
The straightforward business go to your
So it's a tester. And they're there to prepare. Now many, many people
Michael (09:48)
protection. Well
say I can't afford it at the beginning. This the future and setting up your business properly is you pay me to fix your problem down the road.
Michael (09:52)
I can promise you that a few thousand dollars that you spend is far less than what you pay me.
Michael (10:01)
Okay. And you will find out you'll be in a lot less problems if you set properly at the beginning, as opposed to trying to fix a problem down the road.
Michael (10:04)
Set up your company
Michael (10:09)
And that's where your team comes into play. Rely on your team. They have experience in different areas and you get to use them to help you grow your business.
Michael (10:09)
That's
That's
Yeah.
Again pricing your pro
Michael (10:20)
Product
or service is really important. The least you don't necessarily the most expensive. You've sold a product for twenty dollars and it didn't work. And instead of lowering it to ten dollars, they raised it to seventy dollars and they couldn't keep the product in stock. Because there's a perceived value sometimes.
Michael (10:22)
You don't want to be the least expensive. There have actually been companies out there who
And I learned this learned from
every company you work.
Michael (10:44)
for I don't care if you're making
seventeen dollars an hour. Questions in there. Ask then everybody's job because that's going to help you in the future.
Michael (10:47)
Ask everybody who and understand.
But I had a
Michael (10:53)
Producted
when I was real young, I made a fur headband. Cost me eleven dollars to make, two foxtails and a piece of elastic.
Michael (11:00)
And I sold them for twenty nine ninety five. My Mink Earmas Fox Earmas I sold for more because it cost me more to make. I didn't know
Michael (11:06)
I just
Michael (11:07)
I figured
out what I would charge.
Michael (11:09)
you know, ⁓ bump it up based on what it costs me.
Michael (11:11)
Well, not everybody thought that twenty nine ninety five made it real fur. They thought it was fake fur. So they
Michael (11:14)
Maybe next
year I raised it to thirty nine ninety five and sold.
Michael (11:20)
Sold
more. The following year I raised it to forty nine ninety five and sold way more to the point where I couldn't get enough.
Michael (11:25)
To keep up with the demand better fifty
dollar product than a thirty dollar product, even though it cost me the same amount and it was the exact same price.
Michael (11:35)
So sometimes you have to understand but you're in business to make money. Go back
Michael (11:36)
Your market there. Back
to your accountant, go back to your business advisor and discuss what you want to do and why. Sometimes you have projects that cost you a dollar and you sell for a dollar fifty. You have product you sell buy for a dollar and you sell for two dollars.
Michael (11:44)
Charge and
Michael (11:45)
Sometimes products.
Sometimes you
Twelve dollars. But it's a combination of
are going to help you understand your expenses.
Michael (12:01)
Of getting those products in, whether you import them, there's duties, there's not duties, there's transportation costs.
Michael (12:03)
Yeah.
How do you fix that? How do you buy
Michael (12:09)
Buy from overseas without paying up
front. And I say up front.
Michael (12:12)
front
a lot of companies who have tried us by China and other countries, those countries say
Michael (12:17)
you got to send us the money up front or fifty percent up front and fifty percent when we're ready to ship. And I think, no, don't do that.
Michael (12:23)
And that's
Michael (12:23)
being
a business advisor. You have to put the money up in a letter up in a letter credit where the product credit letter credit isn't cashed until the goods are on boat and you have the bill of ladings. Actually two ways. One, you don't pay for something that isn't shipped.
Michael (12:26)
Up put it up in the letter of credit.
Michael (12:30)
Okay.
Michael (12:34)
That protects the goods.
And two, anybody that needs money in China order.
Michael (12:42)
up front to do your order
doesn't have money to deliver to you. So they're taking your money hoping you're gonna you hope you're gonna get your product. But they're using that money to probably build somebody else's item yourself.
Michael (12:47)
Okay, and you
So protect yourself. Ask questions.
You don't have to pay you do not have to follow the rules.
Michael (12:58)
rules
of the clients that are selling to you. They don't have to follow your rules. There has to be a compromise. How to protect yourself. And the are going to help protect you. They're going to help determine your price. The services that you're giving start off with a lot of different items that they sell or the product or services they offer. Finding out after a year which aren't
Michael (13:02)
But you have to understand how the people with the experience are
But it's about finding out after a year or two which ones are making you money and which ones.
And then what happens is you cut off you don't keep
Michael (13:23)
the
ones that aren't. Where they can get the service somewhere else or just say you don't do it anymore. Or you just try to
Michael (13:26)
You tell your client.
charge
a lot more money for it. my father my father and he wrote
Michael (13:34)
was an orthodontist. He was
writing for the Toronto Star and he wrote about TMJ problems with your jaw, which drives people crazy and most of them don't have it, but they kept coming to my father because he read the article. He kept coming, but at least he was making to handle this problem that came to him by did it, but he didn't do it purposely. But he raising the prices to try to get the people to leave.
Michael (13:46)
He couldn't handle the business. He kept raising the price and it still kept more money.
Michael (13:54)
You know.
Michael (13:54)
It
just kept changing
So don't carry a product just to satisfy your clients if you're not making money.
Michael (14:01)
Product because
again, you're in business to make money. That is the purpose of being in business. It is to make money. Okay. The service people need are you
Michael (14:12)
people need you
the best at it. Being the best at work.
up ⁓ warranting your products there's lots of different ways for you to be the best it doesn't have to be
Michael (14:20)
And it doesn't because
you're the least expensive or the most expensive. Be the best and have that conversation and deal with your team to figure out how you can be the best at it.
Michael (14:29)
You know, there's ⁓ you know, you have to
Michael (14:31)
that
it's setting up your business, where you're gonna locate it, the size, the equipment, the employee. one thing I learned the hard way when I was in that fur business, two thousand money I wasted was the best two thousand dollars I ever throw down a toilet. The best two thousand I learned very valuable lesson. Just because you're the president doesn't mean you don't do the work. And I was the president of a company, mine was twenty two or twenty three years old, so I thought it was a big title.
Michael (14:36)
Please
thousand dollar
But I watch T V
Michael (14:57)
Well
I paid two kids to do work for me after the two thousand ninety percent of the work over again. And no business after that did anybody if I could do the job.
Michael (14:59)
And then after thousand dollars, I had to have to did I hire any
Until I couldn't do the job, I couldn't.
Michael (15:10)
did it. When I could,
that's when I hired somebody.
Michael (15:13)
Now who do you hire?
Michael (15:14)
Well you want the best price.
Michael (15:15)
person so you have to pay the best
when I was in that fur business I had a
Michael (15:19)
Detail
place.
I pay fifty minimum wage.
Michael (15:22)
A lot of money. Well, a lot of money, but percent was more. And people kept asking me, How do you keep getting people to show up? Nobody shows up, or one out of ten people show up from the ad. I said because I pay more. It wasn't because I was paying more money. That money was very valuable to me that I could be at the
Michael (15:32)
Money than you do.
Very valuable to me in the sense that I could not afford to be down at the
retail store Monday to Friday. So I could count on.
Michael (15:42)
So I had to have somebody got k
Michael (15:44)
Workful.
Michael (15:44)
And if you're getting paid 50% more than somewhere else for doing the same kind of minimal labor job, you're going to work for me. Right? If everybody so so sometimes you have to hire and pay more money because you make
Michael (15:54)
And more
money.
Michael (15:57)
So therefore it's less money. If it's cost me an extra hundred and ten dollars a week.
Michael (16:00)
week.
I could not afford to be down at this for a hundred and ten dollars. I hadn't make everything.
Michael (16:03)
Place.
So it's really important that you what the best
Michael (16:08)
Figure out what
kind of employee is for you. Is it the smartest? Is it the hardest business?
Michael (16:13)
It all depends on the business
again, I said my father was an Orthodontist, he's probably the first
Michael (16:17)
one
that ever had hygienists put brackets on teeth, the little square pieces. Now every orthodontist does, but it's probably the first one. And hygienist at that time we paid $200 a day. My father paid $300. And my mother doing the bookkeeping went nuts.
Michael (16:24)
Genesis that
Michael (16:31)
You know, two hundred dollars even if two dollars out of her pocket, right? It's always out of her pocket.
Michael (16:32)
week and you know, if it's forty five weeks in the year it's nine thousand per pot.
Michael (16:38)
But ⁓
Michael (16:39)
⁓ my father said to her, I can't afford the
Michael (16:42)
⁓
Michael (16:46)
Here we make money.
Michael (16:50)
So,
Michael (16:51)
So the nine thousand dollars extra, eight, ten thousand dollars, whatever it may be, it's nothing because we make more money because we have the
Michael (16:54)
The extra we pay a year.
right people working for us.
Michael (17:00)
And sometimes when you pay somebody fifty percent more, they might do double the amount of work or may
Michael (17:04)
Make
less mistakes. Mistakes cost money.
Michael (17:07)
⁓ you need the right people again in that team understand you know, one of the ways
Michael (17:07)
You need to understand things and ⁓ people
finance their business sometimes personally because they're bootstrapping it, they may take out a second mortgage on their house to lend it to their business.
Michael (17:21)
Well this is where you
Michael (17:23)
You go
to a commercial lawyer instead of a real estate lawyer.
Michael (17:26)
A commercial will be
Michael (17:27)
able
to do the following for you, which no real estate agent lawyer has ever done or thought about, neither is any mortgage program.
Michael (17:34)
But I tell everybody that's gonna take
Michael (17:35)
money
out of their home to put it into the business. You do it as a registered loan. You take a general securities agreement out on your business. Doesn't matter what position and you can always move it back down if a bank comes or anybody else.
Michael (17:47)
You take out that general securities agreement with a document that
Michael (17:48)
Which is a
really call it a personal guarantee aga against the business. In the United States it's a UCC one.
Michael (17:53)
And I
So that basically now your business owes you money per and you have to charge your your company at least one percent
Michael (17:57)
It's a registered security document.
percent higher
than you're paying for your second mortgage. But your company's not going to pay all the fees, all the interest, all the legal
Michael (18:10)
That's
gonna be in the loan. Why do I say do it? Well, not every business.
Michael (18:15)
This way. Works
Michael (18:17)
Well,
Michael (18:18)
out.
And that
Michael (18:18)
Now
that money can't be paid back.
Michael (18:20)
by your company. So you're on the hook for because it's on your house.
Michael (18:23)
Thank
you.
Michael (18:24)
But if you have that document in place, you now have what in Canada is an A book.
Michael (18:29)
Allowable
business loss because you set it up properly with legal documents. And now your accountant doesn't have a problem writing that off your personal income tax over the next number of years.
Michael (18:38)
So protect yourself. Understand legals. When you have the right lawyer, they'll be
Michael (18:42)
Yeah,
but
Michael (18:42)
to explain these things to you.
Michael (18:44)
So always surround yourself with people, always pay the best people that you get their bill. And I promise you this: 95% of the time, 100% of the time.
Michael (18:48)
They
If it's not a it's
always been a hundred with me, but let's keep a little
time your future bills will be for less money and you charge for every time you call pick up the phone and call your accountant or lawyer for two or three or four minutes. Reason they're getting you're the person they want to do business with. And you just add one extra thing that I always add it to the
Michael (18:59)
You will not be charged
Michael (19:03)
Three.
Michael (19:05)
being when they send out an invoice they know being paid right away.
When I call you up, ⁓ if you can't pick up the phone, you call me back before you call your phone.
Michael (19:14)
You pick up the
Michael (19:14)
You pick up the phone.
before your wife
or your children back. If you do right away, don't do that and I have to wait two or three days to get to co I will find a new lawyer. There are plenty of them. There are plenty of accountants.
Michael (19:22)
that I will pay you right away. If you don't
we turned.
But if you pay them, they'll have no problems picking up the phone. Because you're the best client. Even if you're not the biggest, you're the best. They never worry about getting paid. Really important and will save you money in the long run.
Michael (19:34)
You're the best client. Yes.
Now we've spoken t I guess general, maybe I've
business is a different setup. More important to have, you know, the team the th team of three. But there are other avenues of financing you get when you're a business business, such as factory purchase order financing. EDC's more interested in helping you out. EDC BDC is interested helping out EDC is insurance. They can help you out. There's more avenues because when you're a business to be where you can go and people can lend money and it's
Michael (19:45)
the
⁓ is there's more money.
Michael (20:10)
larger numbers than if you're opening up a small variety store or a small restaurant. There's different financings. And again, that's where your business advisor comes into play. Now or
Michael (20:18)
on a business ⁓ on a restaurant or even a small machine
you can get what's called an SBL loan Canadian small business ⁓
Michael (20:27)
This is one.
In
the States it's a different name. It goes a little bit higher, I forget what it's called with an S. S. B. A. in the States.
Michael (20:35)
called an SBA
and you go for these loans because you don't have to guarantee as much. So in Canada you have dollars, but you're only guaranteeing to guaranteeing twenty-five percent. But if you don't know about it, you're gonna go in dollars
Michael (20:39)
much. You can only up to half a million dollars.
No go and get a half a million dollars,
you have to guarantee the whole half million dollars, you have to qualify for half a million. Where if you know what you're doing and your business advisor would know it, you only guarantee five percent. You qualify for twenty five percent.
Michael (20:56)
You're only having qualified.
These are important things.
Michael (21:01)
to understand for the financing and growth of your business and the survival of your business. Now again, most important when you go to friends and family.
Michael (21:06)
Financing some
Michael (21:09)
You're asking them for money. They're gonna look at your business plan, but really they just wanna believe in you. You need to understand your business completely. You asked for is one thing.
Michael (21:15)
But how much money do you
And two, what are the repayment terms?
Michael (21:19)
And these are really important.
Michael (21:21)
So if you need two hundred thousand
Michael (21:23)
You ask for $200,000. You don't ask for $100 because you think that's all anybody's going to give you. They only give you $100. But if you ask for $100, that's all your maximum you're going to get.
Michael (21:25)
You don't
They may only but if you only ask
If you ask for two hundred, you might get to it. If you ask for a hundred
Michael (21:34)
budget. But here's the important thing
when you needed two, and you'll always need the two if you really thought you did. Go back six months, a year later for the other
Michael (21:41)
And you have to clear hundred,
they're gonna ask what's the problem. But if they gave you the two at the beginning, they don't ask that question because you didn't come to them for more money. When you're dealing
Michael (21:51)
Now go with
a bank get a some forgiveness as far as only having to pay interest for six months, then principal. You're born from friends and family, you want to be paying either nothing or interest or repayment for at least two years.
Michael (21:53)
You gotta pay.
Michael (21:54)
You might
But when you you really just want
Yeah.
Michael (22:04)
But no
Michael (22:07)
And the reason you want to wait for at least is you want two so that you have the opportunity.
Michael (22:08)
These two years, financial statements.
If you're making money to go get outside financing from a bank or other institution, but you need a time frame and you don't want to be paying back. And you don't want to be promising that because if you can't pay it back, now that doesn't look good. Now back, take their money back because you've been paying interest.
Michael (22:17)
See that
If you can't pay, they may not take paying them interest.
But if you owe back money and you let's say after a year,
Michael (22:31)
year
you're sitting with 200,000 in the bank and you owe 200,000 to the family members. Pay them back $200,000. Pay them back $50 or $100, do so. You don't know when there's going to be a hiccup. So you don't have to pay that money right away just because you have it. You do have to follow whatever rule how you borrowed it. Minimum before there's any repayment. Explain why I need to put the money back in the business.
Michael (22:36)
Do not
Wanna pay?
cash is
to pay back
But you just want a board two years. And you're
Michael (22:58)
And as long as they don't see you driving brand new cars, they'll be okay with that.
Michael (23:01)
The came with
So be smart about how you borrow money. Always ask for what you need.
Michael (23:06)
Need or
for more than you need. Never ask for less because you think that's all that's going to come your way. You will get in much more trouble because when a business runs out of money, the doors get closed. The key to keeping your business going. And when you're new in business,
Michael (23:08)
Never
Money is
Cash is king and
Michael (23:22)
Profit
is down the road. So protect yourself.
Michael (23:26)
Don't promise things you can't.
Michael (23:27)
Can't
deliver. Don't
Michael (23:28)
Take
on crazy money.
And sometimes a partnership.
Michael (23:31)
Is more expensive? Sometimes less expensive because you have is it a silent partner? Is it a working partner? A silent partner is never silent, and you want a working partner that does something that you don't do.
Michael (23:32)
It's less you have to decide what kind of partner you have.
Hmm.
Remember you don't want a partner that if that partner can bring the table
Michael (23:46)
does the same thing as you. Partner the money to the table,
that's the kind of partner you need, if you need money. If they bring an expertise or a license, that's the kind of
Michael (23:53)
They bring an apartment.
But remember this, when you sell equity in your always more
Michael (23:58)
Business. That's always more
expensive than the interest you're paying for the money you're born that you need. Because the partner never disappears. You can always pay off the debt if you just borrowed it. So be careful take on a partner and give up equity. Sometimes it's a really good, sometimes it's not. Again, that's where you talk things over with your accountant and your lawyer and your business advisor. You don't have to make
Michael (24:05)
But you
Michael (24:08)
Careful before you take
Good idea.
it out make
a decision that night and anybody the pressure to do that
Michael (24:23)
You to do that
is not the partner you want. You can just make up your own mind, no, and find a new partner. Be careful what you do. Do it. Because today you want to do it and you're all excited. Set it up properly, or you'll be closing the doors before you know it. Do it properly, and you have the best chance of surviving when most businesses don't. And most businesses don't survive because they didn't have the finance, the proper financing in place.
Michael (24:29)
Be ready to do don't jump in because
Properly.
Or the owner didn't work hard. It really did. It's really true. A lot of times the owner doesn't work hard.
Michael (24:52)
Because they're the president, they're the owner. I know that firsthand, being twenty-two years old and having a business. That first thing, that lesson.
Michael (25:00)
And
I'm telling you, I remember that lesson to this day because it worked it was just true. And these are things that go into
Michael (25:02)
Hey.
Starting
a business and you don't have to open it up on next Monday. You take your time and you do it properly and you will have the best chance of