Is 2020 the year that you step out on your own and create a new business? You’re in good company. As of December 2017, the Canadian economy totaled 1.18 million employer businesses. Of these, 1.15 million (97.9 percent) were small businesses, 21,926 (1.9 percent) were medium-sized businesses and 2,939 (0.2 percent) were large businesses.
Not every one of these has been a success story; Between 2010 and 2015, the average number of SMEs created annually was 95,000 and the average number of businesses that disappeared annually was 85,000. With this in mind, we’ve put together some advice to aid you in your steps to success.
Here’s everything you need to do when you are ready to start your own business.
Have a business idea
It all starts with an idea. Whether you think that you have a niche concept on your hands, or think you can do an existing concept much better, your business journey will still start here.
Ask yourself these questions to help you get your head in the right frame of mind for planning:
- What is your business idea in one sentence?
- Why do you want to do it?
- How can you make money?
- Do you intend to make profit or is it an ‘not for profit’?
- Will you be able to run things yourself immediately or will you need staff?
- If you had to start tomorrow, what equipment, accounting software or infrastructure would you need?
Once you know the answers to these questions you are well on your way to crafting your mission statement.
Write a mission statement
A mission statement is the core principle/ethos/truth that lies at the heart of your business. This statement is the foundation of your business and should be strong enough to remain unchanged throughout the organization’s future.
Here are some examples of mission statements from some well-known organizations:
Tesla: To accelerate the world’s transition to sustainable energy.
Patagonia: Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.
Wholefoods: Our purpose is to nourish people and the planet. We’re a purpose-driven company that aims to set the standards of excellence for food retailers. Quality is a state of mind at Whole Foods Market.
Now that you have your concise mission statement to drive you forward you are ready to put together a business plan.
Write a business plan
A business plan is a document that sets out your goals and the strategies that you intend on implementing to achieve them over a set period of time. Your plan will take important matters into account such as overheads, projected profits, marketing initiatives and customer acquisition strategies.
Business plans are important for both internal and external stakeholders. Examples of internal stakeholders would be the employees you intend to hire in your organization. External stakeholders could be banks or other potential funding partners who will expect to see a business plan before they invest in your business.
You can download a business plan template as part of our free Survival Toolkit for Small Businesses.
For most new businesses, capital investment will be required to get your company off the ground. Along with the traditional business loan from a bank, here are some other avenues entrepreneurs could explore in Canada.
Explore grants and financial assistance
You may be eligible for various government grants or subsidies. It’s not necessarily your first choice of funding, but certain industries and regions are supported by government programs.
The Canada Business Network lists grants and subsidies to support tourism, research and development, exporting to new markets, cultural projects, and more.
Each province or territory has its own funding initiatives so check the website thoroughly to see which programs might apply to your business.
Seek outside investors
Investors will typically want an equity stake in your business before they part with any funding. Like banks, they will also want to see a clear ‘value proposition’ in the form of a business plan and full supporting financial documents before they consider supporting your business with funds.
Your business idea could be a good fit for crowdfunding especially if you are creating technology or a tangible service for your audience. Imagine that during your market research of your business idea you tapped into an audience who were eagerly awaiting a product or service like yours. Crowdfunding within this community could give them the chance to buy in at an early stage and receive the first batch of your product as an investment reward.
Your investors are likely to become your customers, and they can do a lot of the promotion for you, spreading the word through social networks and they could even beta test your prototypes.
Name and domain
When you are ready to start marketing your business idea you will need to ensure that your business name is available and that you are not infringing on any Canadian trademarks or IP. You can check the Corporate Name and Trademark database to make sure you are free to use the name if your choice.
Once you have your name, you should then check if your desired web domain name is available. You can use a free tool from Shopify to check what variations may also serve your business.
Grow your business
It might sound ambitious, but you should already have a plan to grow your business beyond the startup phase.
During the first few years of your small business, success is not necessarily about profits—it’s about staying in the game by making enough money to survive.
In order to achieve this, businesses should take a here step approach to help scale the business:
Part 1: Increase sales and generate cash
Part 2: Monitor what is going on and fix any issues
Part 3: Getting the right support
We have detailed this growth strategy in a free ebook you can download today.