MEDIA: 2020 Delivers Canada Post a New Business Model (CBC News)

COVID19 has brought interesting times to many companies and organizations, including Canada Post.  It was not that long ago when people might have viewed this longstanding organization as having a waning future, as society became increasingly mobile and digital in nature; then, 2020 came along.

With Canadians confined to their homes on an ongoing basis, the need to procure goods was, and continues to be, of heightened interest, while efficient movement of money and information has also been in need.  This situation has presented both opportunities and challenges for Canada Post, a topic I recently discussed with CBC News.  This story is of significant interest, as the Holiday Season approaches, appearing in print and also on CBC Cross Canada Syndicated Audio (great to chat with radio in major markets, from coast to coast to coast!).

There is much that can be said about business model evolution.  One of the interesting things about this particular example is the notion of “everything old being new again”.  Some viewers will remember the old days of home delivery, be it milk, department store trucks, or other household items being sold door-to-door (yes, people actually earned a living this way).  We waited by the mailbox for important letters, cards, and parcels; perhaps, if we were lucky, there was a cheque in the mail.  Having a family member that worked at the downtown Eaton’s store meant that the delivery man was at the door, often.  Why was this business model so popular at the time?

As recently as the 1970’s, many Canadians had limited mobility; think about the relative norms of women taking time off from the workforce to raise children and families having one vehicle, at most.  This created a need for products and essential goods to be brought to the doorstep.  Studies have shown that women have significant purchasing power, in terms of shopping decisions made by households, further supporting this business model of the past.

Increased mobility brought progress, where the 1980’s, 1990’s, and 2000’s meant that a lot of time was spent out and about.  This new freedom included Canadians spending a significant amount of time in shopping malls and restaurants, as well as at events and attractions.  As 2010 and beyond arrived, it is interesting to see how much this trend has changed.

In short: technology has provided a different type of mobility, one that we can hold in our hand.  Be it by way of a smartphone or tablet, Canadians can order just about any type of item for delivery, as well as transmit information and money.  Many businesses have capitalized on this trend, including major courier companies and financial institutions, as well as relative newcomers, such as Amazon and food delivery upstarts; this has also changed how businesses, in general, operate.  The masses of envelopes that once included letters and payments can now be sent electronically, representing a decrease in traditional mail, while parcel traffic has increased (at the time of this writing, thousands of parcels are stuck across Canada, as a result of volume increases and COVID19 protocols, including one of mine).

What this means for Canada Post’s business model is actually not that different from the case of any business: know where the company can successfully compete and have the pieces in place to do it well.  So, while traditional letter mail will continue to decline, there is an ongoing need to get goods to Canadians.  Integral to doing so on a competitive basis are the logistics infrastructure and capability, within acceptable cost parameters.  This includes continuing to invest in technology, for both Canada Post staff members and customers.

This brings the story full circle, where getting goods to Canadians (rather than going out to get them) is the priority.  The reason, this time, is not due to a lack of mobility, but rather, it is a function of how mobility has changed (it is now digital, not physical), as well as the time constraints that have become a way of life for many.  Think about this the next time a purchase is being contemplated, and ask: what is driving this decision?

Thank you for including me in your stories, CBC, and best of the Holiday Season, everyone!

MEDIA: Dragons’ Den Blog Interview

Thanks to the Dragons’ Den Blog for being in touch to discuss The Worst Ways to Raise Cash as an Entrepreneur; it’s always great to share some tips and traps when it comes to building a company.

Although it’s no secret that there are various approaches than an entrepreneur could take to finance a young venture, this should be considered in a broader context. Startup companies typically receive their initial financing through “founders, family, and friends”, with perhaps some support through grant and similar programs. What tends to get lost in the process is whether or not doing so is actually a good investment.  Considering this includes determining the likelihood of: (i) the capital being repaid, at some point in time; and (ii) the return that could be generated, if any. Doing so can really only be achieved by way of developing a thorough and complete business plan, including a financial forecast for at least a three year period.

Entrepreneurs and business planning don’t always have a good partnership, however.  Business planning tends to get downplayed as “not that important” or “impossible to do for a startup”; both of which are false. When an entrepreneur prepares a business plan, they tend to insufficiently address areas that are of significance to investors, such as industry and market issues and the right business model, and instead, focus on an abundance of product and technical content.  The impact?  Little to no chance of raising investment capital.

Entrepreneurs should, instead, consider whether or not a startup is worth spending their time and money on, as it will surely take plenty of both. It is important to take the time to do so before investing one’s own capital, regardless of the source, and before asking others to do the same. As a business advisor and former venture capitalist, I have seen too many young companies that likely would not have been launched, had these questions been asked and answered in advance. Further to this point, rarely have I met an entrepreneur who actually took the time to do their business planning homework first, although I have met many who wished that they had better understood the financing implications and realistic potential of their company sooner.

Not sure how to address these important areas?  Advisors can help. Not only can they assist with putting the right business planning efforts in place, they can also help to identify opportunities to generate cash sooner, which is another area that entrepreneurs tend to miss.  Contact us to learn more.