In the wake of economic recession, uncertainty within the political environment and the numerous technological advancements affecting various industries, entrepreneurs in not only Alberta but across Canada and beyond are faced with a time of great change. However, increased challenge can be considered opportunity.
“Technology, for example, is presenting opportunity in places beyond what we could have imagined,” says Stephen Murphy, Executive Vice President of Banking for Canadian Western Bank. “Entrepreneurs in Western Canada should be thinking globally about how the world is changing and creating opportunities outside their traditional strategies.”
As the marketplace becomes more global, it requires entrepreneurs to be even more nimble and adaptive as competition becomes more intense in crowded markets. The opportunities arising aren’t just from people going out and actively pursuing them, but from opportunities coming directly to them, which increases the pressure for entrepreneurs to determine their value proposition and how to compete in their own backyards.
Opportunities for growth
As for large-scale growth opportunities for Western Canada, Stephen has examined recent events in Alberta with BioWare’s announcement of its move to the Epcor Tower in downtown Edmonton and Calgary’s recent bid as a home base for Amazon’s second headquarters (HQ2). “Calgary, in particular, has one of the strongest entrepreneurial spirits of any metropolitan area in North America,” notes Stephen. “The city has a get it done attitude.” As a result of the economic downturn, Stephen believes the city has had to undergo a re-think given their heavy dependence on the oil and gas sector. This has pushed Calgary to branch out and think beyond just being an energy hub – considering new sectors and markets given where the economy is headed in the long-term. Stephen adds, “They’re facing a period wrought with soul searching. Up until a few years ago, they were largely dependent on the oil sector. Now, there are a lot of good initiatives happening around the city, which are sure to broaden its horizons.”
And as Stephen sees it, this similar sense of confident optimism and tenacity is what drives many successful entrepreneurs – not just cities. Those entrepreneurs who succeed in the long run are imbued with the same composite of traits — they’re visionary, innovative, client centric, driven and committed. From that group who has a ‘great idea,’ the really successful entrepreneurs are those who can take it to the next level. Stephen explains, “Some have the broad acumen, experience and judgment to handle challenges on their own while others surround themselves with advisors to fill in those gaps and make them better equipped to make key decisions.”
Key strategic considerations
When an entrepreneur is presented with a growth opportunity, there’s a lot to think about strategically. Stephen observes that at first breath, accountants and lawyers are important partners who provide functional expertise. But businesses grow or die on cash flow. This makes a banker another important partner – one who can provide another lens on business planning and access to financing. “A banker can help determine how to best position yourself for financing, what funds you’re going to need moving forward, how to manage cash flows optimally and how to determine if your budget is appropriate,” says Stephen. Bankers have experience with many clients, industries and growth scenarios, which gives them the experience and tools to help entrepreneurs think about risks, needs and planning.
That’s why CWB believes there is power in their strategy of focusing on business owners. “We understand the challenges of entrepreneurship,” says Stephen. “We focus on understanding our clients better by bringing a higher touch partnership to them. We use that familiarity and understanding of both their business and personal situations to integrate solutions to help them be successful overall.” And at its core, CWB is about good old-fashioned relationship building.
“I remember having a conversation with a very successful entrepreneur, who deals with multiple banks,” says Stephen. “They told me about an institution that was handling their personal and business affairs in different silos who did not communicate with each other and only wanted to talk how much money each silo was going to get. They weren’t interested in the client’s big picture priorities that spanned across business assets and personal assets, securities and real estate.” The entrepreneur went on to say that CWB was different and had an opportunity to leverage its strong business relationships into being ‘more’ for its clients.
How a banking advisor can help
There are many ways a banking advisor can provide advice to a new or existing business, particularly when it comes to budgeting, forecasting and planning out cash flows. Banking advisors can ensure entrepreneurs have enough financing to support new growth while managing their payables and receivables, as well as plan for additional investments (e.g., new equipment) and unforeseen risks.
“It’s really about adding value in how they create their plan and how they’re going to unlock pieces of the plan from a financial perspective,” explains Stephen. “It’s not just about capital, it’s about setting up financial solutions for clients that make it easier and more cost effective to run your business.”
The question we face now is where the future of entrepreneurship is heading. “We’re in an environment where technology has been the greatest equalizer,” notes Stephen. “Scale is completely different now. In the past, select individuals could create a behemoth company and establish a lasting dominant position in the market. Now, just about anyone can have an idea in their garage and displace an older, larger company.” Technology has changed the notion of scale and the speed of innovation. And it’s also altered the competitive landscape and opened up competition – leveling the playing field against established companies more than ever before. However, entrepreneurs need partners who can move at the new speed of business.
One of the reasons CWB ‘gets’ entrepreneurs is because they’ve been an entrepreneurial company themselves – a fast growing, focused underdog competing against huge, established competitors and even government-owned institutions. Stephen says, “We are driven to ‘make things happen’ and our clients’ success is our success.”
There’s also a lot of innovation happening in the financial services space, and CWB is in a place where they can take advantage of new technologies and not be at a competitive disadvantage. “We have made foundational technology investments so we can compete with the big banks straight up,” concludes Stephen. “It’s anybody’s guess as to what the next big idea will be but we are positioned to grow and adapt. Who knows how far we can go as we continue to build and evolve our capabilities. As long as we are focused on how we can support our clients’ success, we can all grow together.”
Contact a CWB advisor today to see how we can help your business reach its financial goals now and into the future.