Starting A Small Business Part 1
Small Business On The Move.
With the changing of the economy, we are seeing more professionals seeking to be their own boss. While some seek entrepreneurial freedom off of a new idea or innovation, many seek to begin a business within the industries they are most familiar with. It can be a difficult road to pursue, yet extraordinarily rewarding.
Success and failure often seem to balanced precariously on a knives edge at times. Many factors come into play, some within our power – many outside of it. The fact is that no sure-fire way to succeed exists, and beginning a business will always represent a risk.
That said, there are certain means and methods one can take to increase the odds. Understanding some of the rules, and knowing the tools that exist can help reduce the headaches, and the failures.
Below we will dive into the first of a two part series examining tips and resources for start-ups.
Make A Plan.
First, decide what business type makes the most practical sense, given your temperament, abilities, background and passions, for you to pursue. While many start-ups begin as a result of a passion for a specific business, others begin due to a desire for freedom. It is important to truly contemplate what it is you want to do.
Much of small businesses long term success is determined by the level of fulfillment it gives the owner.
2. Finances – Breaking Even?
Create a budget vs start-up costs analysis and be honest! If you will not be breaking even immediately, how long? Determine your long term plan. How long can you survive without making the necessary sales? Remember that it may take a while to generate profit and you need to be able to sustain not only your business, but yourself, your family etc.
3. Finance – Sales & Profits.
Simple, but easy to miss. Making sales is great, but making profits is better. Determine within your plan, how long it may be before you not only break even, but generate increased cash flow.
4. Goals – Make Them.
Set three or four key goals for your business, in relation to your costs, budget and sales plan. Keep them simple, keep them achievable but keep them relevant.
- What promotional materials need to be in place before you open your doors?
- By what date do you intend on making x number of dollars?
- How many customers do you intend to have contacted within your first month?
5. Business Plan.
Write a business plan – many resources exist online and at career institutes to assist you. Include your budget vs cost comparison, your profit forecast or cash-flow analysis and the goals you have set.
6. Search Out Business Financing Resources.
There are people who will finance your business. Government grants, financial institutions…Grandma.
Ok maybe not Grandma, but a quick search can turn up some surprising cash oriented resources that can make or break you efforts early on.
7. A Marketing Plan.
- How will your promote you business in the beginning?
- What type of materials will you use?
- Who will you target?
- What message will you target with?
- How does this fit into your budget?
- What will give your business the most bang for your buck?
- What is the timeline for your business cards? your website? your vehicle decals? etc etc.
Decide On A Legal Structure For Your Business.
8. Consider The Various Forms Of Business Structures.
Explore the pros and cons. Here are a few of the ownership types you will come across:
- Sole proprietorship (single owner)
- Partnership (multiple owners)
9. Key Factors That Affect Business Structures:
- What is the simplest business format for your industry?
- Does this structure fit for future needs?
- How many owners will be involved?
- What type of start-up capital will you need?
- What are the personal pros and cons regarding liability and limited liability?
- Do you stand to gain from selling stock?
- How should your business be taxed?
10. Discuss Your Business Structure with a Lawyer.
Answer the necessary questions for yourself first. Devise a business plan and ensure you have done adequate research to reduce any legal consulting time needed. There are numerous resources available for this, search online or check with local career centre. Once you have done what leg work you can, consider discussing your plans with a lawyer.
We explore the pro’s and cons related to the business structure options in depth in our posting on Canadian Business Structures
Name Your Business.
11. When Naming Your Business Consider:
- What service or industry are you in?
- Does your name make sense for this industry?
- What are some of your competitors names?
- What will grab attention?
- Is the name similar to others out there? It may impact availability, and your ranking in phones books and even search engines.
- What will work with slogans, marketing and promotions?
Consider names that make use of standard industry terms, of your geography and your brand promise, also consider creativity and fun.
12. Are Your Considered Names Available?
The name may be awesome, but it may also be taken. Business name availability will depend on a number of variables:
- The industry: An industrial plastics business will have less existing businesses then a hipster coffee shop.
- The location: Including location terms like “Western Canadian, British Columbia, Okanagan” etc. can reduce availability – so double check.
You need to also consider where you will be doing business. Verify all the key areas for availability including:
- Online: Check to see if your business name is available as a website domain. (Hint: You can try purchasing the domain rights from the owner, however that can be expensive – if it is already taken, consider a minor deviation to the name).
- Local Community: Verify with the local authorities to see if your proposed name has been taken. It may be used by a genuine business, or even a fictitious one. Either way if it is taken, it is taken. (Hint: Here again you may be able to purchase the rights, or may want to consider a minor deviation to the name – Example: Spelling etc).
- Provincially & Federally: Run a trademark search on the considered names on your list. Keep in mind that using a name that is trademarked elsewhere could simply confuse the customer.
13. Choose A Name.
Use the above tips to slowly eliminate names from your list. Choose one of the remaining that fits well with your business, desired image and personal preference.
14. Register The Name.
Register your name locally and as a domain etc. Doing so will eliminate any messy legal issues that may arise in the future from others attempting to use the same name. If needs be register it federally or as a trademark as well (this may be unnecessary for start-ups).
That sums up the first of our two part series. We will finish up next week by looking at Business Locations, Permits, Insurance and more! Exciting stuff so stay tuned!
Transition Marketing Services. Our passion is educating and equipping small business owners with the tools and strategies to succeed. We have made it our priority to know Specialized Marketing. We keep up to date on what is new, what is available and what makes the most sense for businesses of all sizes and backgrounds. We recognize that every Small Business is unique, and their Marketing needs to be as well. Visit us at our website and let us know how were doing or if you have any questions. TRANSITION MARKETING SERVICES – Small Business Marketing Specialists.