When you think of traditional mom and pop business what do you imagine? Is it the mechanic down the street, garage door propped open, with a steady stream of engine tune-ups, tire rotations, oil changes, and fixes on leaky transmissions?
By David Gens
He’s the guy who won’t rip you off when your car starts making that weird sound, and the guy you always recommend whenever anyone has car problems. Maybe instead you envision your local grocer (I’m not talking about Walmart) with hand selected fresh produce, an excellent selection of chocolate, and a friendly face when you buy your 649. Maybe it’s the shop where you pick up flowers for your partner every Friday. Whatever you picture, mom and pop businesses are arguably the symbol entrepreneurship – independent small businesses with hard working owners, who show up and go hard every day.
That said, one of the things you likely didn’t envision is Fintech. To be honest, most people don’t even know what Fintech is (I don’t blame you). FinTech is short for Financial Technologies, it’s basically the back end technology used in financial services to make money transfers happen, process loans, manage assets, make your mobile banking app run…things like that.
At the core, my business is a mom and pop business. I worked with my old man to build our platform, we built a simple system at the beginning to get it off the ground at the lowest possible cost. Now, our proprietary software uses thousands of datapoints, it reviews bank statements, scans online reviews, takes in geographic data and puts everything together in a package to let us know whether we should provide financing to a business or not. My whole business is providing mom and pop shops and small businesses financing.
In honor of Mom and Pop Business Day, I’d like to offer the following tips about building and growing a mom and pop family business:
- Build it one customer at a time. I started out of my apartment, and had five clients the first year. Engage your customers, hear what they have to say, and let them know their business matters.
- Family support + hard work = growth. Last week, my dad worked over night with our team to move one of our servers, my fiancé is our VP of Marketing and answers emails 24/7. Success is only possible through the support of my family. I work 7 days a week, and would work 8 if it were possible.
- Dream big. Like I said, I started out with 5 customers. Today, I’ve got a staff of 45, with offices in Toronto and Vancouver, my company has provided financing totaling over $150M to small business in Canada.
- Develop your own technology. Don’t rely on other people to identify and solve problems for you. In the banking sector, businesses can only borrow based on collateral assets that they have to back the loan. But most small businesses don’t have the necessary collateral to meet a banks standard. We identified this as a problem that we could solve and developed the technology to do so.
- Don’t overspend. In March of 2010, we wrote our first loan, and since then we have always been profitable. We never ran losses, and we only spent the money we could afford. We didn’t really start adding more staff until we were 24 months into building the business. Only spend what you need, and what you know you will get back.
Some of Canada’s largest businesses started out as mom and pop shops. With hard work, planning, strong family support, and a little bit of luck, your small business could be the next big one. You’ve got this.
David Gens is the CEO and founder of Merchant Advance Capital, which provides financing to small-business owners.