According to research by RBC Economics, the share of self-employed 15-to-24-year-olds has doubled over the past two decades.
“The rise of the gig economy is likely influencing these labour market trends,” writes Laura Cooper, an economist at RBC and author of the report. “Technological growth has coincided with an increase in self-employment within the professional, scientific and technical sector, where human capital tends to be the primary input.”
In turn, Canada has seen a record rise in young people pursuing the contractor route, rather than becoming a full time employee of one company, with contract employment accounting for 12.8 percent of all youth employment in 2015, says Cooper.
Amidst the burgeoning trend, an ecosystem has arisen to support and guide this Generation as they turn inspired ideas into inspiring businesses. Whether you’re an entrepreneur-to-be or just curious about the startup sphere, here are some key considerations for navigating the ecosystem on your way to building a successful business:
Build Your Foundation
The difference between starting up and a “Startup” is a business plan — it’s the foundation of turning an idea into a business. Every business plan should include a brief description of your company and where you anticipate it will stand in the marketplace; a sales and marketing plan for targeting customers; a description of how your business will operate; your strategy for human resources including key initial staff and HR policies; and your action plan for the next three years. It should also include an executive summary outlining the reasons you are seeking financing as well as the facts and figures that back up your plan.
Sounds daunting right? Organizations like non-profit Futurpreneur Canada have identified templates and workshops to help you start on the right foot. This includes the Rock my Business Plan, a Foundation for an Entrepreneurial Canada program series in partnership with RBC supported by RBC Future Launch, which helps young entrepreneurs build a business plan through one-to-one coaching and guidance from a business development expert..”The Rock My Business Plan series is a great place to get support and ask all the questions that might be holding you back from starting or moving forward with your business idea,” says Mellisa Mills, a program participant and owner of Spread’Em Kitchen Co. in Vancouver. “It helped give me confidence to trust my idea and move forward.”
Find Your Funds
So you have a plan, but how’re you going to fund your business? An entrepreneur who truly believes in their idea could be willing to put their own money behind the project. But that doesn’t mean it has to be entirely self-funded. Crowdfunding sites like Indiegogo, GoFundMe and Kickstarter can be valuable tools for raising early stage capital from friends, family and believers interested in your project. Other resources like Futurpreneur and BDC can provide loans to help startups get off the ground.
The initial round of funding is referred to as “seed funding” and is often augmented through pooled investments called venture capital funds. Many of these “VC funds” have agendas or specific types of businesses they like to invest in. The RBC Generator, for instance, has earmarked $10-million to invest in ideas aimed at tackling social and environmental challenges. MaRS Discovery District has created this list for finding VC funds and angel investors.
Need to Co-Work, Accelerate, or Incubate?
A valuable resource for entrepreneurs can be the network of co-working spaces, incubators and accelerators making up the wider startup ecosystem. These different spaces can provide a home and resources for entrepreneurs in different stages of their career.
A co-work space or hot desk, is typically a hub where entrepreneurs can rent a desk or office. They don’t take equity and funding is seldom a part of the equation. However, many offer a good chance to cross-pollinate with like-minded entrepreneurs and attend workshops and seminars to expand your skill-set. WeWork is a prime example of the model, with spaces across Canada.
Accelerators provide you with office space but usually don’t charge for use of the facility, instead taking a percentage of your equity once you accept funding. Accelerator programs vary in length but are usually less than a year — 500 Startups Canada, for instance, is a four-month program whereas Launch 180, is three months. These sorts of fast-track programs allow entrepreneurs to tap into experienced mentors and guidance to help secure funding.
With incubators, you may or may not be charged for the facility or you may fork over a percentage of your equity. Like an accelerator, you’ll have access to mentors and guidance and help with funding. Entrepreneurs typically scale their business within these spaces over the course of one to five years.
Betakit’s Canadian Startup Map is a good place to start the search for the right space.
Know Your Network
A spirit of collaboration and camaraderie resounds across Canada’s hottest startup markets like Toronto, Montreal and Vancouver. For fresh-faced entrepreneurs, the serial business builders in those markets can make for vital mentors. Organizations like Futurpreneur or the Women in Biz Network can act as gateways for young entrepreneur looking for guidance. Ten Thousand Coffees, seeks to connect young people with professionals for coffee dates across the country, while TiE Global takes a more decentralized approach, connecting ambitious youth with mentors at chapters around the globe. Getting out there and networking through meet-up events is also a good way to find like-minded entrepreneurs. But, with events happening weekly, be wary of a common hang-up for entrepreneurs: devoting too much time to socializing and not enough to building your business.
With no shortage of resources for helping young entrepreneurial Canadians, it’s a good time for those considering starting their own business. Whether you’re looking to craft a business plan, fund your idea, find a home for your business or expand your network, the resources are there — and now you know where to start.
This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.