Updated: Aug 17, 2021
The Example of What Not to Do
We were approached a few years back by a company looking to sell their products in Canada and set up their business in the Canadian market. The owners were manufacturers of an offshore product that had done well in Europe but had no real presence in Canada. They wanted help with marketing and wanted us to set up a distribution channel and manage it. When it came to contract negotiations, it became abundantly clear that they wanted us to do this for "free" and take a risk in their business in the hopes that the product will sell here in Canada. The idea was for us to give 4 days a week (8 days for both) each of our time for their business to help it get set up and running. Once this was complete and "if" the product sold here, and "if" they could meet the obligations of the distributors here, and "if" they could deliver on time - we might get paid. The key here to note is at any point in time after we had done the work, they could cancel the contract and not pay us. If you think it is uncommon, it is not and is one of the mistakes that new business owners make. They believe they created the next greatest idea and that everyone should believe in it as they do. They believed everyone would want to jump on board and help them when they have not put any skin in the game.
Understanding What An Idea Is Worth
An idea or a product is worth absolutely nothing anywhere if you cannot execute your plan. Whether you are looking for others with skills that you do not possess or an investor for your business, you cannot expect others to risk their business in your idea, when you are not doing the majority of the work or putting in money.
If I had a nickel for every start-up who wanted to provide equity for work, they could not perform on their own or find investors for them when they had not invested any money in the business - I would be a millionaire today. The funniest part of this is they usually want to maintain 90% of the company, and they only have the "idea," and everyone has the skill and the money. One of the key ingredients to a successful business is the team you put together, but it is very important that if you ask others to invest their time or funds in your business, you can truly look yourself in the mirror and say you have done the same.
If someone came to you and said, I have this idea worth millions, but to make it a reality, I need money and skills to pay for a business plan, a patent lawyer, marketing and sales, and a supply chain. In addition, they want you to give them money or provide skills for free because they were the ones with the idea. Would you believe that was a reasonable request? The answer is an absolute no. Before others can believe in you and your idea, you need to be realistic about what your idea or product is worth without help or funding from others.
Before you ask other people with skills and money to