There are so many reasons a person wants to start their own business. Perhaps it is for the financial freedom, or because the business owner wants to do things their way. For some, it may be for schedule flexibility, or perhaps they’ve come up with an innovative idea that has not been done before.
The idea of being an entrepreneur isn’t new by any means, however, today’s economic landscape combined with the emergence of the online world has allowed for a never before seen sense of entrepreneurship. Obviously, there has always been “go-getters”, dating back to the fur-trade era, but today more than ever people are on the lookout for careers that allow for more independence.
But before a person ventures into the deep end of small business ownership, there are a few factors that should be considered and planned for. These points below could help you and your business succeed.
Branding isn’t just for the Cowboys.
As of December 2015, there were an estimated 1.14 million small businesses in Canada and less than 25,000 medium-to-large sized businesses. That means your new business is going to go up against some competition. Even if you’ve got something new that no one has ever thought of, the day will come when you won’t be the only person doing it.
So it’s important to brand yourself well. Here are a few things to consider for your business name:
- Is the name already taken?
- What does it sound like out loud? Is it easy to pronounce?
- Can you register domains or trademarks?
- Can it be shortened or misspelled easily? What do those look or sound like?
- Does it explain the business?
- Are there negative connotations or connections to lingo or slang?
This business is going to be your pride and passion, so you want to make sure you name it something that you can be proud of and “own” in all formats.
Understand the rules and regulations.
Like everything else in life, there are rules. Now that you’re ready to move forward with your new business – you have to follow the rules or you risk being tied up with legalities.
Your best bet is to schedule an appointment with someone who can help you navigate all the rules and regulations so you can concentrate on the things you’re good at to help ensure success.
The first thing on your list should be registering your business name, getting a business number and a Corporation income tax account, and applying for any interprovincial corporations (if necessary). After that, you’ll need to apply for any permits or licenses. This likely includes local business licenses.
You’ll also want to plan for taxes. That includes both charging tax and paying tax. Which leads us to our next point.
Budgets are worth spending time on.
Where to even begin with a budget? Obviously, it will be difficult to project your income, especially in the beginning stages of a new business. You should be able to figure out some parts of your expenses beforehand, and doing so will allow you to foresee any shortcomings.
This section could be an article unto itself (foreshadowing), but for now, we’ll point out a couple things to think about before starting your own business.
Can you live without a paycheque?
Most entrepreneurs don’t make a whole lot of many right away – the financial freedom is normally a long-term goal. If you can’t live without a paycheque, you’ll need to figure out how much of a payment you need to take each month in order to survive. This isn’t as simple as dividing a yearly salary into twelve. You have to account for health insurance, or and paying taxes every month, then figuring out exactly what kind of monthly income you need.
Do you have Capital?
Companies that have been in business for awhile typically have some capital funding that can be used for a variety of reasons. As a new business, you may not be able to have that luxury right away, unless you can use some of your savings. Can your business operate without it?
Time Off? Perhaps.
Making your own schedule – that’s one of the biggest draws to working for yourself. Which is odd, because if you are starting your own business be prepared to work harder than you’ve ever had to work before.
While it’s true that if you just want to shut it down for a day, it’s possible, but doing so pauses your business. It’s rare that a new business will “run itself”.
Failure or adjustments may come, and that is okay.
Don’t be afraid of failing, some of today’s best-known entrepreneurs failed at one point or another. J.K Rowling, the author of Harry Potter, was rejected multiple times. Colonel Sanders didn’t open his first KFC until he was 62 years old, and that original one closed.
If you’re considering starting a business, the biggest thing to do is research and plan. Talk to trusted advisors, like our team at JMH, to help you navigate your way to financial success.