Life Money
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What do a marketing-pro-turned-fashionista, an architect-turned-jewelry-designer, a business-analyst-turned-diaper-bag-designer and an executive-chef and catering company owner know about personal finances? A lot, actually. Starting a successful business from scratch is a make-or-break proposition, and the lessons these four Canadian entrepreneurs learned while growing their businesses can enlighten the rest of us when it comes to spending, saving and investing wisely. (See the bottom of the article to learn more about our four entrepreneurs’ companies, or dive right in for their experience-based financial advice.)

On spending:

“The old adage that money makes money could not be truer when attempting to start a business. Without cash flow you’re left dead in the water. For this reason we never spent our money on projected cash flow, we spend it on the hard cash that was in our bank account. We only hired when we had the money to do so, we only spent when we had a confirmation of sales and we never extended our risk outside of our comfort zone.” – Mario Christian Lavorato, Joseph Nogucci co-founder

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“The key is to have spending goals and a budget in place, though I must admit that we don’t check every purchase against our monthly limits. We just use mint.com to track all of our spending and do a monthly review to keep a check on how we are doing, which will then have an impact on the timing and size of bigger purchases. It’s kind of like checking your weight on the scale every morning — it gets you motivated to get back on track when you see you are going a bit overboard!” – Catherine Choi, SoYoung founder

“I now deal with my partner and my financials and bookkeeping. I sift through bills, credit card statements, put together Excel spreadsheets and budgets. I like to keep things organized and ensure we know where every dollar is going. Learning to do this for my business has made me a more responsible spender. I don’t spend less, I just know where every dollar goes and make sure we take accountability for the dollars we spend as a couple so that we can plan for the future.” – Lauren Mozer, elle cuisine owner and executive chef

On saving:

“I’ve found it’s best to just automate the saving process by setting up an automatic monthly withdrawal from our chequing account to a savings account, which we then put into RRSPs or leave in a long-term reserve.” – Catherine Choi

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On investing:

“When you’re running a growing business, you become very invested in seeing that succeed, however it’s still important to maintain some diversity. We keep all of our investments in RRSPs. In addition to the tax benefits, it helps us avoid any temptation to fund immediate business interests and ensure we have a long-term savings plan in place.” – Catherine Choi

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“I never risked the financial position of my business, but made sure I always had the money to spend. This is the approach I believe in, especially in my industry, although sometimes I think about what would have happened if I’d been a bit more risky and ballsy, investment-wise. Maybe growth would have been faster? Who knows…take the approach you’re most comfortable with given your personality.” – Lauren Mozer

On professional advisors:

“As soon as we could, we hired an accountant and bookkeeper. Having professionals take care of this aspect of our business has been one of our best decisions. We found ours through other small business owners we knew in our city.” – Miranda McCullagh, Whistle and Flute owner

“It’s crucial to hire a financial planner, a tax lawyer and a reliable accountant. The expert advice that these professionals bring to your organization will make an enormous difference to your bottom line. Having said that, nobody knows your business better than you, so it’s incredibly important that you also learn how the financial end of your company functions. Work hand-in-hand with them.” – Mario Christian Lavorato

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“Don’t choose the cheapest option [as] you generally get what you pay for. But whomever you choose, make sure they get paid by the hour, not as a percentage of your holdings.” – Catherine Choi

On risk:

“Obviously risk is entirely necessary. The key is to make sure that the risk you take is in line with what you can handle. There is a serious difference between good, responsible risk and gambling. Don’t gamble; the house always wins.” – Mario Christian Lavorato

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On thinking like entrepreneurs:

“Don’t wait for the perfect time, there is none. We have achieved the best things in our life by just doing them. As soon as it’s remotely possible, we’ve done it. I think a lot of people wait around for everything to line up and that time may never come.” – Miranda McCullagh

“Look at yourself as a business. Does the money you spend on yourself, or on your life enhance the financial strength of your business or does it negatively affect it? Are you making the right financial moves to guarantee a positive ROI or are you spending frivolously without any thought as to how your choices will affect you both in the short-term or long-term?” – Mario Christian Lavorato

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“As with a many of the entrepreneurs I’ve spoken to, the idea for the business came out of wanting to address a personal need. For me it was being a new mother and not seeing any bags in the market that really spoke to me. Having an idea and acting on it are two different things. I can honestly say that my first efforts to come up with a bag design were less than stellar – but I kept at it. I was fortunate that at the time my husband was working and I was essentially a full-time mother, which gave me the freedom to explore more ideas. This can be more difficult if you already have a job, but anything is possible if you’re passionate.” – Catherine Choi

“I would also strongly suggest joining mastermind groups or meet-ups that bring other entrepreneurs together. I knew nothing about how to launch and run a business when I started, so I learned a huge amount from talking to and interacting with other people who were in the same boat as me. I’ve always tried to help other people and I have been fortunate to have many other people help me get where I am.” – Catherine Choi

On taking good advice:

“The best financial advice I’ve ever gotten in relation to my business is this: Spend what you make, not what you think you’re going to make. This may go against everything that you see in the start-up world where “pre-revenue” valuations are wildly inflated based on projected sales, but this is a tried-and-true way to grow a business and keep it financially secure.” – Mario Christian Lavorato

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About the entrepreneurs’ businesses:

Catherine Choi, SoYoung

SoYoung sells fashion-forward lunch bags, backpacks and diaper bags designed in Toronto, and is participating in an exclusive collaboration with eBay Canada.

Mario Christian Lavorato, Co-founder/Business Development at Daniel Christian Tang and Joseph Nogucci

Joseph Nogucci creates wearable art and currently has a store on eBay; Daniel Christian Tang specializes in 3D-printed jewelry.

Miranda McCullagh, Owner of Whistle & Flute Clothing 

Whistle & Flute has recently partnered with eBay Canada for an exclusive back-to-school collection available from August 11 to September 15 at eBay.ca/Boutiques. The company also has a popular Instagram page.

Lauren Mozer, Owner/Executive Chef of elle cuisine

elle cuisine is a full-service food and event management company servicing the Greater Toronto Area. From intimate private cooking classes and multi-course tasting menu to large scale corporate affairs and weddings, elle cuisine’s mission is to serve the finest food and create engaging atmospheres in which moments are shared and relationships flourish.