If you are one of the thousands of Canadians that are entering the realm of entrepreneurship but need to have a full time gig to support your real life, you aren’t alone. Whether you call it “Moonlighting” or a side business, or Plan B there are risks and opportunities to leading a dual life of sorts. If you choose to have a business as an alternative revenue stream, there are a number of funding avenues to pursue that won’t take a big chunk out of your savings. Here are five options that you should consider, based on specific side business scenarios.
Government Funding Programs
There are many government funding programs at the federal, provincial and regional levels. There are niche programs for manufacturers, industries such as Life Sciences and Aerospace, and others for youth entrepreneurs, regional programs and more. Government agencies such as Industry Canada, the National Research Council, and the Canadian Foundation for Innovation and the National Science and Engineering Research Council of Canada have a spectrum of funding, tax rebate, and strategic partner programs. As many programs as there are, there are a number of organizations across Canada that can help entrepreneurs navigate government funding programs. Some examples of these companies include Mentor Works, Fundica and others that you can find on this Backbone Magazine article.
If you have a full time job and are starting a side business, a financial institution like the Business Development Bank of Canada (BDC) or other chartered banks might be the path of least resistance. The bank will likely appreciate the lower risk factor since you have a more secure income stream, and there will be less paperwork to do compared to a government grant application however interest rates apply and you need to pay off the loan. The BDC offers an annual contest for young entrepreneurs to win $100,000 for their new venture.
Friends, Family, and Fools
OK so you probably won’t get much help with financing your business by calling people fools, however sometimes it helps that people are a little bit “off the wall” to invest in a part time business. Get some family to help you with your business, and maybe do them favors in return. When you are a big success, cut them in on your riches. That’s what family is for after all!
With friends, maybe get them involved in your business as an early adopter of your product or service. Form strategic partnerships or get them to give testimonials for your side venture. Even more important than funding, you need moral support and who better to give you props than your BFFs?
Freelance work, In kind transactions/bartering
If you could provide your service for clients on an ad hoc basis, and make small amounts of money doing it, why not? If you could provide that service in exchange for other services that you need in life such as graphic design, chiropractic or car repairs, that is kind of the same thing as funding right? Form relationships with people that are willing to exchange their expertise or sweat equity for yours. Aim for bartering relationships with people that are bakers, accountants or housekeepers. Those services are always helpful.
There are a number of new crowdfunding options that are available to inventive Canadians with products or business models that can return value to investors that buy in on your idea. Kickstarter, FundRazr, and IndieGogo offer enterprising entrepreneurs the opportunity to source not only funding, but early adopter customers and/or a public platform for promotion. Crowdfunding is not a model to be taken lightly, and entrepreneurs should secure patents or otherwise secure their intellectual capital before publicizing their product on Crowdfunding platforms.
There are many ways of funding a side business, and one of the best ways is to work very hard in your full time role to secure your future and possibly earn a raise which could come in handy. At some point, you will need to take a hard look at your full time employment, compare it to where you have taken your side business and decide which career will take you forward to meeting your career goals.