The Entrepreneur and Relative Risk

The spring issue of SKY Magazine features an interview with Nadia Williamson, Chair of the Regina District Chamber of Commerce and Yaya Wang, President of Saskatchewan Young Professionals and Entrepreneurs.  They make the point that entrepreneurship is not easy - that it needs to be approached from a business planning perspective, with considering given to the financial risks that are inherent in business.

It’s true that business comes with risk, and at the beginning the risks are just as big as when a business is established because risk is relative to what’s at stake.

Starting a business requires capital.  The Regina District Chamber of Commerce has a loan program for new businesses but it has to be used for tangible items, they told me. So if a person is opening a product based business for a new store, for example, the money can be used to buy the things associated with a store.

But what if your business is not a tangible items kind of business. What if you are in the service industry?  In the service industry, the overhead and start up costs are in marketing, training ad ongoing development, employee benefits (even if you are the only employee), administrative support and accounting services.

Nadia and Yaya make the point that often times money is at stake in a business - your banker’s money, your investor’s money and quite likely your family’s money.  While an entrepreneur is building a business, chances are any money earned is used to finance the business and pay for overhead such as lease / office space, telephone, marketing, salaries, benefits, legal bills, gas, car expenses, etc. There is the lost opportunity capital that has to be considered - by that I mean while the entrepreneur is building a business, and quite likely not supporting himself or herself - how much money could he or she have made in that time as an employee?

The question of age entered the discussion, and the conclusion was that age is not a factor in entrepreneurship, but the risks are different.

A few issues back, Barbara March-Burwell, Certified Financial Planner for RBC Dominion Security spoke of the changing work environment, and the fact that some people are not retiring, instead they are starting businesses, which delays retirement and infact might put their long term financial stability at risk.

In this issue, Yaya says that younger people today are more likely to want to pursue their own business rather than work for someone else - but the question is whose money is at risk, especially if that young entrepreneur has no financial track record yet? That’s when it comes back to family, and even affecting his or her parents’ retirement.

Entrepreneur’s give up their financial security to open these businesses.  Many entrepreneurs have multiple jobs and interests in order to maintain cash flow.  The short and long term issue of financial security is a big one.  In this issue of SKY,  Barbara March-Burwell has some interesting things to say about this in her column, and she offers a guide of for entrepreneurs, which I would recommend.

Today I had a discussion with a business owner who said that our city is not very entrepreneurial, citing too many restrictions on the part of the city’s administration.  He said, if you want the city to grow, it’s not - we don’t want that kind of business in that kind of neighbourhood or area of the city - we want your business, how can we help.

I hope you enjoy the spring issue of SKY Magazine - and if you know an entrepreneur, I hope you will support their business. If you are a decision or policy maker, I hope you will support all of our businesses.

A One Woman Publishing Show: The Entrepreneur’s Experience

Lynn Armstrong is an entrepreneur running a niche magazine about entrepreneurs for entrepreneurs.  She produces SKY Magazine under her company SKY Publishers Ltd. 

A professional writer with 20 years of experience in the corporate realm as a corporate planner and strategist, Lynn ventured into the entrepreneurial world first with the creation of Lynear Thinking Strategy and Communications Ltd., a practice that helps private sector companies, cooperatives and non-profits with planning, strategy and communications.

"In 2012, I was looking for a way to tell the stories of entrepreneurs in a way that would help them achieve their business goals.  I was researching various magazine models and SKY happen to literally fall from the sky. One of my clients called me one day and said he had seen SKY Magazine for sale on Kijiji. I called the number and the rest is history. I bought SKY Magazine in October 2012 and put out my first issue December 2012.”

"I am a one woman show.  I am the publisher, editor, writer, advertising executive, book keeper, distribution manager, digital editor and online manager."

"Each quarter, I produce the magazine with the help of two other entrepreneurs, Greg Huszar, photographer, and Amber Moon, designer.  I am very proud of what we have accomplished.  My competitors, by comparison, have multiple sales staff, writers, at least one editor and a quite likely financial backers.  Did I mention I am my own financial backer? The revenue from each issue is used to pay for the production, printing and distribution of the magazine."

"Being an entrepreneur is really about running a right sized business and knowing what you are willing to put at risk.  An entrepreneur needs to know how to use his or her resources in the best way possible. When I bring business owners into SKY, I am working with them to ensure their budget is best utilized on the page."