Small Business Month: startup tips for newcomers
October is known as Small Business Month throughout the country — a time to recognize the significance that the small and medium-sized business sector has in the Canadian economy. The majority of Canadian firms are, in fact, small businesses; 1,143,630 out of 1,167,978 are small businesses across the country and 70 per cent (or 8.2 million) of the labour force was employed by small businesses, according to Industry Canada statistics from 2015.
Many immigrants turn to small business in Canada, but starting up can be a challenging, exhausting process, and failure rates can be steep.
Thinking of starting a small business? Here are some tips for giving your small business the best start.
Begin with a business plan
So you have an idea. You want to open a restaurant, import a product or … (fill in the blank). Whatever your business idea is, you must have a plan — a business plan, that is.
There are many books and websites to show you how to build a business plan, but the most important part of your plan should be a detailed and careful analysis of how your business idea is going to make money.
That doesn’t mean just how you’re going to market your idea or where you’re going to get initial financing. Every business owner should know exactly how and when the money is going to start flowing into their pockets, and how much it will cost them to keep the business alive until it is truly profitable.
Even if you believe your business does not require a formal plan, most business experts highly recommend that you conduct at least some preliminary research prior to committing yourself legally or financially to your business enterprise. Financial lenders and other potential investors and advisers will use your business plan as a tool to assess their level of support for your business.
A business plan typically includes the following essential elements:
- business overview
- description of products/services
- competitor analysis
- overview of management, staff and support services
- sales and marketing plan
- operations plan
- risk/contingency plan
- financial plan
READ MORE: Business plan basics
Find advisers and mentors
The second thing all new entrepreneurs need is a team of advisers who can guide them through the early stages of business, on matters from marketing to legal issues. For new Canadians who have owned a successful business in another country, it’s important to have someone on your team who can help you thrive in the Canadian business environment. Help this adviser understand the business environment you have come from to help you bridge your knowledge from one market to another.
Lean on your support network
Friends and family who support you unconditionally are another element for a new entrepreneur’s success. Although it is often friends or family who help to finance a small startup, the real value is having someone who will be there to help you ride out the rough spots, celebrate the successes and laugh about the inevitable learning experiences.
Brand your business
People often make a big effort to come up with clever or unusual names, but it won’t be memorable if nobody can pronounce it or it doesn’t identify what your company does. “Lee Holdings Ltd.” is simple, but too vague. If you are a dog groomer, say “Lee’s Dog Grooming.” Everyone will understand and remember what you do.
Know what sells
Know your profitable products and services and ditch the money-losers. Focusing on what you do well and what makes you money, will make you a leaner shop with better profits.
Plan your marketing and sales
A clear and creative marketing and sales plan is critical, especially in a downturn economy. For example, if your business traditionally relies on walk-in traffic, you may now need to come up with ways to go to your customers. For example, a travel agent may no longer be able to rely on email or telephone inquiries, but will need to examine other customer-attracting strategies such as networking, putting on seminars or using social media strategies (e.g., Facebook, Twitter, LinkedIn and blogs) to build word of mouth.
Manage your money
If you aren’t keeping track of where money is coming and going in your business, you may find yourself going out of business much faster than you intended! What gets measured gets managed. Bookkeeping systems don’t need to be complicated or expensive. If you’re not an organized person and you don’t like spending time with the numbers, hire a bookkeeper to make sure all your financial records stay in order. Software such as Quickbooks or Simply Accounting is affordable and can streamline your recordkeeping considerably.
Hire and retain
Hiring employees can be one of the most time-consuming tasks that small business owners face. So once you hire, focus also on retaining your key staff members. Retention isn’t always about a bigger paycheque, either.
If your payroll is tight, give your employees non-financial reasons to love working for you. Be creative: offer an employee bus pass program or bring in a massage therapist for a lunchtime session once a month. There are many ways to reward your staff.
Consider strategic partnerships
Whether you have a retail-based business or are an entrepreneur working from home, isolation can be a negative factor that brings down your energy. That’s why strategic partnerships can be a boost for an entrepreneur. Strategic partnerships exist when two (or more) businesses agree to help each other in specific ways, including joint marketing, referrals, sharing business premises or equipment, or even something as simple as holding regular meetings to share ideas or give moral support.
Don’t forget your obligations
Even though you may think you’re just a small company, you still have obligations that won’t go away. Most important, the government still expects you to collect and remit sales taxes, employee deductions and income tax.
READ MORE: 7 business basics immigrants must know