Toni Desrosiers is the founder of Abeego Designs Inc., a Canadian company offering a reusable beeswax food wrap which keeps food stored in a safer way for a longer period of time. Toni is one of the 5 top SheEOs of 2015 who have received a 500k interest-free loan together through sheEO radical generosity program. Here, Toni kindly shares her start-up finance advice on how she has created and grown Abeego with her own savings and business loans.
Pinkfolio: How did you fund Abeego in the beginning, and how were you able to work full-time for Abeego?
Toni: My $1200 of savings was the initial investment for Abeego. I kept working full-time at my previous job while I developed the idea of Abeego. Once the Abeego product started generating revenue from word of mouth, local markets, and eventually the online market, I moved to part-time and eventually quit my old job. My personal credit card was my lifeline as soon as I quit my job and was my main “financing tool” for two years, until I was able to get my first small business loan.
Pinkfolio: Lots of start-ups and small business owners have challenges in balancing their personal and business finances over time. Can you offer any advice on this?
– Get educated. A solid bookkeeper trained me when I started Abeego. I did my own bookkeeping with spreadsheets and simple software for the first two years. Now I have a bookkeeper, but I am always on top of my finances.
– Keep your personal expenses and business expenses separate. Use separate cards and bank accounts for each so you won’t blur the line between what is a business expense and what is a personal expense.
– Build a little financial safety net. I have a bit of savings that can support me and my family for five months if our business isn’t profitable for a period of time. It is a peace of mind that allows me to take the necessary risks to grow Abeego and still sleep at night.
- As soon as your business starts receiving money, set up a business account to separate your finances. Consider an account with online banking since it requires a lower fee.
- Building up an emergency fund is essential for small business owners. If you want an even bigger safety net, get an approval for a line of credit. You will be able to borrow with a lower interest rate than a credit card.
Hidden costs of free money
Pinkfolio: Any start-up finance advice for those who are starting a new business?
Toni: Free money can be very expensive. Government support and grants are great, but you can make actual money in the time you are writing these applications. Go out onto the street and markets. Meet actual people. Sell your ideas and products to grow your start-up.
- Something to note: Not many venture capitalists invest in a pre-revenue business – they tend to invest in growth, not just ideas.
- Most government grants are very competitive to obtain, and will typically ask you match their financial contributions. You are more likely to get a grant when your small business has a sales revenue or raised funding.
Retirement planning for entrepreneurs
Pinkfolio: Anything about finances that you’d like to learn about even more?
Toni: I’d like to build my own retirement plan. I’d like to find a financial advisor who understands the entrepreneurs’ perspective since my planning should be different from those with regular income. I consider putting my money into Abeego as the best investment. However, my long-term plan should be carefully reviewed and balanced with other investment options.
- Making a regular monthly contribution to a retirement account can be a great start. Remember the concept of ‘dollar cost averaging’.
- Toni came up with the idea of ‘contributing by percentage’ in case of income fluctuation. This is a great idea, but don’t forget to check your maximum retirement saving contribution of the year from your tax agency.
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