For many it starts with a lemonade stand. That first (not sour) taste of what it’s like to be your own boss! So intoxicating. But even with a lemonade stand, the entrepreneurial beginnings can be challenging — your lemonade tastes bad, your poster sucks, the weather doesn’t co-operate, there aren’t enough people passing your stand. It’s the same for grown-ups, actually. In order to make your business work, you really have to be diligent about the plan, you have to be knowledgeable about the market, you need to have your finances worked out and you’ve got to spread the word. No winging it in the business of small business. Here are seven steps to making it work.
Market research Market research is a key component of your business strategy and should be the first step in developing a new product or service. This is your opportunity to check out the competition and find out what’s already out there. It can also help you to determine how your business could offer something better or different — part of the research might involve identifying service or product gaps that need to be filled. Based on your research you will also be able to establish pricing.
Please note that even though you might have your heart set on a particular business idea, you may find there isn’t a current demand for what you’d like to do. This will make it harder to get funding and to make a profit. (For some examples of how a business idea can fail, watch a few episodes of CBC’s Dragon’s Den!) Sometimes this means your dream business will have to wait or you will have to start out on a small scale. Or it may just require a little creativity to figure out how to make your product or service unique.
The federal government’s Canada Business Network site thoroughly describes market research and provides useful tools for conducting it. Often, something simple like doing an online survey (via social media, for instance) can give you an idea of what people want and if your business would be able to meet that want.
What’s the (business) plan? Once you’ve determined that there is a market, you will need to start shaping your idea into a concrete business plan to show funders. This means more than just having a catchy name and a fancy logo (although, branding your business is absolutely crucial).
Funders will expect your plan to answer many questions including:
- What is the demand for your product or service?
- What are the start-up costs?
- How many staff members will you need, if any?
- What are the overhead/production costs?
- How long will it take to start recouping your initial investment?
- What are your projected profits?
- What happens if the market changes?
- Do you have any plans to expand your business?
The Canada Business and the Business Development Bank of Canada sites explain how to create business plans and offer online templates. Additionally, the Canadian Bankers Association and the major Canadian banks all have useful tools to help you decide what type of business to start, where to get financing and how to put together a business plan.
Making a strong business plan is essential to any successful business, whether it involves starting a fruit stand, doing freelance accounting or teaching accordion classes. You can even consider taking business management courses — schools such as Ryerson, Humber or Rotman offer full-time degrees in business, but you can also take part-time programs at Centennial College). If you don’t have the desire to manage the business yourself, find a reputable accountant or advisor to ensure your financial affairs are in good order. Being aware of your money is just good business sense and not something that is in conflict with creativity.
Also do check out places and sites such as MaRS or Lean Coffee Toronto to get free peer support, get referrals to services and ask for advice and get all kinds of tips about being an entrepreneur. Finally, don’t forget about the Enterprise Toronto site that’s chock full of resources including small business events, notices about workshops, seminars, events, and much more.
Start small. Before you blow your savings on the best glass beads, a walk-in freezer or a storefront on a swanky street, remember that many successful business owners started out with just a few basic materials, using their basements, kitchens or garages as their headquarters. (Dufflet Rosenberg of Dufflet pastries began baking from her home in 1975. She opened her first pastry shop in 1982. Today, “Dufflet Pastries supplies more than 500 restaurants and cafés, specialty food shops, upscale supermarkets, hotels and caterers with more than 100 unique, entirely natural products.”) If you have a clear mental picture of what you want to achieve, you may think it’s fine to skip a few steps and fast-track your business expansion. However, a wise entrepreneur knows that success takes time. (LinkedIn has an interesting forum discussion on how long it takes to get a business off the ground). Don’t overextend yourself financially or by promising larger orders or longer hours than you can keep.
Spread the word As an entrepreneur, you need to be ready to sell yourself and your new enterprise. Mention your business to your friend’s relatives, that guy you met on the bus, and pretty much anyone you lay your eyes on. Set up a Facebook fan page. A Twitter account. And post like there’s no tomorrow — you need to take an active part in promoting your business.
Once your business is established, developing a community network can also help boost your reputation. Forge relationships with other establishments on the street or with businesses related to your industry. For example, if you’ve just started a carpentry business and are meeting other tradespeople (plumbers, electricians, etc.) on work sites, get chummy with them. Pass out your business cards and keep in touch. If they like your work, there’s a good chance they’ll refer you in the future.
Find out about mentoring opportunities and look into associations, such as business improvement associations (BIAs). Have a question about taxes? Ask your accountant cousin out for lunch. In our article on networking we offer great advice on how to network to get a job — feel free to apply similar strategies to let people know about your small business.
You’ve got to have a website. Period. It seems redundant to tell you how important a website is for your business. After all, you’re reading this online so you must be already indoctrinated into the world of the Internet. “To the eyes of a consumer, having a quality, professionally designed website is a measure of how successful your business is and how likely you are to remain in business. Small businesses without a website seem ephemeral — fleeting,” says an expert on the importance of a website for small business. There are more reasons than that, of course, but the main one is that many people simply expect it.
You can either pay a professional to create a website for you or set up one on your own. Basic website creation is actually not that hard; it just takes a little patience. Creating your own website will entail purchasing a domain name (such as [name of your business].ca), finding a website hosting service, and then using a publishing platform to create your pages. There are many website publishing platforms available, such as WordPress, Blogger, TypePad and Movable Type, some of which incorporate hosting and publishing services all in one. One of the easiest and best-looking sites you can build for free is via wix.com.
If you’re still daunted by the idea of creating your own website, you can always sign up for a course in website development. Seneca College offers evening and weekend workshops, and the Toronto District School Board has classes on website design grouped by difficulty level.
How would you like to pay for that? Funding options for entrepreneurs It’s expensive to start up a business (especially one that runs out of a storefront, but even online businesses require start-up money). Most people don’t have thousands of dollars lying around, so external financial assistance is usually required. This can take the form of a bank loan, money from family and friends, outside silent partners or even angel investors.
The Industry Canada website is a good place to start researching funding sources. The Canada Business site also has a great financing resource list for specific demographic groups. Private sector financing is another option to investigate. Check out Futurpreneur Canada for more resources.
Original article by Poss.ca, an initiative of Findhelp Information Services, an Employment Ontario project funded in part by the Government of Canada.