small business

When Does a Startup Stop Being a Startup?

By Mark Evans in Startups 2 Comments Tags: , ,

This may be a question of semantics but here’s a question for you: When does a startup stop being a startup? At what point does a startup become a small company or a plain and simple company?

It’s an interesting question because it’s easy – and probably lazy – to describe less established high-tech companies as startups. As well, the word “startup” is lot sexier and appealing than “small business”.

So how should a startup be defined? Does it have to do with the evolution and life-cycle of its product? Is it the number of employees? Is it linked to revenue? Does it have to do with how long a company has been around? Can a startup have 10s of thousands of customers even if none of them actually pay for a service?

For example, is Freshbooks a startup despite the fact it has been around for several years, it has 80 employees and sales of about $10-million give or take a few million dollars? It’s sometimes called a startup but it’s more accurate to call it a small company.

For the sake of argument, here are some possible criteria for startups:

1. Less than 20 employees. Once you get more  than this number of employees, a company starts to have “departments”
2. A product still in development (pre-launch) or in market as a beta for less than six months.
3. No sales or sales of less than $1-million, which means it’s a mini-business as opposed to a small business.
4. It’s less than a year old, although there are companies that do go from zero to sixty in less than 364 days.
5. No customers or only a handful of customers, who may or may not be significant clients dollars-wise.
6. It has raised more than $5-million in venture capital. With this kind of cash, a company can support having a large team.

For more thoughts, check out this Q&A on Quora, as well as a recent blog post on Business Insider.

Can Small Businesses Do Social Media?

By Mark Evans in Social Media, Uncategorized 5 Comments Tags: , ,

For all the talk about social media levelling the playing field for small businesses, here’s a question that doesn’t get much attention: Can small businesses effectively embrace social media? If so, how?

This struck me during a recent visit to Dave’s on St. Clair, a relatively new restaurant/bar in downtown Toronto. In talking to the owner about the restaurant’s efforts to spread the word, it was no surprise that social media came into play.

There are a couple of realities facing Dave’s: first, and perhaps most significant, is they don’t have a lot of time for social media. When you’re the cook and chief bottle washer, it can be challenge carving out the time for social media. Then, there’s the issue of selecting the most relevant social media service and effectively promoting it. These are both major issues and hurdles for small business owners, who have so much on their plates.

Assuming a small business does embrace a specific social media service (for Dave’s, it is Facebook), they have to figure out how much content to create and what kind of content (menu updates, deals, special events, photos, etc.). And they have to do it on a regular basis if their social media activities are going to gain a foothold and generate some traction.

As important, small businesses need to activity promote their presence on social media to ensure it resonates with as many people as possible. It means everything from putting the icon on their Web site to putting it (and/or the URL) on business cards, bills/invoices, business cards, marketing collateral, a sign on the front door and, of course, word of mouth. It’s a lot of work that needs to happen on a regular basis to get any kind of traction.

The bottom line is social media involves a lot of time and effort. This is a challenge for any company, particularly small business owners who never seem to have enough time or resources for operate the business. For small businesses, however, that do commit themselves to making social media happen, the benefits can be significant.

Catching the Online Accounting Wave

By Mark Evans in Web 2.0 6 Comments Tags: , , ,

When I was started ME Consulting, one of the biggest challenges was finding an accounting system that met my needs. To be honest, most of them have way too many bells and whistles for a one-person operation. This means your choices are pretty much limited to a few options, especially if you have a Mac. In the end, I selected Jumsoft’s Money – a little-known desktop software application.

Over the past few months, I’ve been looking a number of online accounting systems, including Xero. Today, a new player officially enters the fray: Toronto-based Wave Accounting. It’s good to see a Canadian start-up getting in the market, especially one that seems to have lots of potential given how many applications are going into the cloud.

While I haven’t had much time to try Wave Accounting, first impressions are good. It’s relatively easy to set up, although the process to get up and going needs to be smoother. The service seems to have all of the necessary ingredients, including a way to send invoices.

The price structuring is flat at $19.99/month, although volumes discounts are offered for six and 12-month plans. In an ideal world, it would be good to see tiered-pricing to meets the needs of different sized companies – along the lines of what Xero and ClearBooks do. That said, the prices are reasonable, especially for small companies looking for an online service that lets multiple people access an accounting system.

Kirk Simpson, one of Wave’s co-founders, said Wave was started because there’s a major opportunity for a service that meets the needs of small business owners – given 65% of them are using spreadsheets for at least part of the accounting needs.

The target audience, he said, is employees with five employees or less. “We don’t ever see ourselves going after mid and large size companies – ever,” he said. “They have customized needs that require a more robust solution. We see this solution working for both self-employed entrepreneurs and small companies with a few employees. Obviously our target market will be internet-savvy and that segment is constantly growing.”

Simpson believes the online accounting market is poised for major growth because smaller companies are looking for services that offer accessibility, collaboration and automatic data back-up. And while there is competition from larger players, he contends they are just moving their desktop applications into the cloud as opposed to building true online services.

Moving forward, Wave plans to integrate its accounting service with other companies meeting the needs of small business owners. This includes invoicing (a partnership with Freshbooks would make perfect sense) and payroll management.

For anyone interesting in an online accounting system, Wave is definitely worth checking out. It offers a 30-day free trial that doesn’t require a credit card to register. Any data put into the system during the trial period can be exported if you decide not to buy it.

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