4 lessons I learned giving 2 million to small businesses

Distilled from interactions with hundreds of businesses

Back in 2021, I interacted daily with dozens of small Canadian business owners for almost a year. We were distributing roughly 2 million in grants to small business owners to help them hire interns. We worked with hundreds of them, from teams developing an idea to businesses with dozens of employees.

A lot of them were decent, and some were amazing people.

But, boy, some of them were rude, borderline sleazy, and cheap as they come. I’ve learned a lot about how much they pay people, how they treat their interns, but mostly importantly about their mindset.

Let’s get through the 4 lessons I learned on that project.

1. They ask to a fault

For 100 people too scared to ask, there’s a person that will ask, keep asking, ask some more, and get what they want. The 100 people too scared to ask will watch on the sidelines, often resentful. It’s sad.

The common fears are statements such as:

• “What if they reject me?”

• “I don’t want to bother people”

• “I don’t want to be seen as selfish”

There was this lady that I’m sure would apply to all the organizations distributing the grants (we were a bunch). When we were out of money, she would follow up with us every other day to see if we had a cancellation. Sometimes, she would follow up every day. She would even talk to all the people she could at my company when we would take longer to reply.

Obviously, she’s an extreme example. One that will not work for sustainable working relationships. But in between inaction and harassment, there is a wide spectrum of respectful follow-ups and asking.

The last thing I’ll add here is that some people might say “no” to what you ask. You can either:

1. Take it point-blank and accept it.

2. Ask follow-up questions.

I’ve used questions like “How can we make this happen?” or “What solutions do we have?” or even “Anyone on your team who could help with this?”

Usually, you can uncover something useful or get what you wanted by digging a little bit deeper.

2. One mistake won’t sink the ship

To be honest, I made mistakes, and there were grey areas in how we could distribute the money and to whom. Sometimes, we had to tell people, “Sorry, but we can’t give you the money, or it’ll take longer.” There were usually two types of reactions:

1. Surprise and anger

2. Acceptance

You could feel the first ones were putting all their eggs in one basket without proper leeway.

The others didn’t rely so heavily on the grant to make their business function. For good reasons, the grant would pay partially the salary of the intern, but it was also a one-time event. There was no way to build a reliable business on top of subsidies.

I didn’t see the books of the accepting business owners, but my bet is that they had enough cash flow to withstand multiple months of business expenses and overhead.

It’s good practice to have 5-6 months of personal expenses saved up. Why would it differ for a business?

3. Get pre-revenue out of your vocabulary

Some of them tried to play the game way too seriously. I remember a guy was interviewing a UX designer for months.

The thing with that grant is that you needed to have a hire coming up when the money was available. So, if the business was taking too long to find someone, they ran the risk of losing their spot. That’s what ended up happening for that person.

They didn’t have revenue, and I was confused about why they were interviewing for that long. Chances are they didn’t have much money and they thought they really needed a UX designer, they probably felt like it was a massive deal to hire this person. It probably was. I really value UX design, but I’m pretty sure it was not what was going to bring them closer to revenue. They probably thought it was a grand idea that was going to bring them incredible valuation, with investors dying to buy them out.

We have to be careful with that thinking. It’s akin to wishful thinking while gambling. “I know this roll of the die will make me win.” You don’t know.

Money right now is better than the hope of money later. Get “pre-revenue” out of your vocabulary and go get some clients.

4. I’ll take honest over sleazy

I’d rather work with someone honest and kind any time of the day. Even if it means going slightly slower for them because of it.

One person approached us asking if she could get some money to hire contractors, I remember telling her we couldn’t subsidize contractors so she wasn’t eligible. We couldn’t give money to businesses hiring contractors. Only employees.

She came back with a roundabout way of saying she was confused about the question and that the people were actually employees. A couple of emails ensued over the next days where she was contradicting herself many times.

She obviously wanted the money in her pocket and would blabber anything she thought would work to get it.

Proper red flag. I’d rather pass on doing business with people that act like that. It doesn’t set the tone for a long, fulfilling work relationship.

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What about you? If you’ve interacted with business owners, what are some of your lessons learned from those interactions?

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3 juicy links of the week

1. “Controversial opinions about newsletters”

   1. Everyone and their moms tell you to start a newsletter. But why should you start one? Is it a realistic business to get into? Is it even a business model? This Twitter post sheds some light on those questions.

2. What makes solopreneurship difficult

   1. A very realistic essay on solopreneurship by an SEO expert, Jordan O’Connor, who scaled his business in the past years using only SEO. He goes deeper into the common daily challenges solopreneurs face.

3. Overview of growing an agency by Nat Eliason

   1. I enjoyed the article because Nat describes his difficulty in scaling and removing himself from key parts of the business. People throw sentences like “Delegate and remove yourself from the day-to-day.” Obviously, it comes with a learning curve where you need to reflect on your communication and own behaviour to empower those people to take over.