Going out on your own and being your own boss as you launch a small business can be thrilling. But there are also a number of steps that go into starting a business, and that can be overwhelming. First, you must lay a solid foundation for your business. But what comes next? With no one there to check your work, you might be wondering what you should do first, and whether anything is missing on your to-do list.
We spoke with Dominik Loncar, Entrepreneur-in-Residence at Futurpreneur Canada, to find out his top tips for starting a business, whether you’re launching a cleaning business, a retail shop, or anything else.
- Start to figure out your legal structure (but don’t get carried away)
First, investigate the regulations within your industry, like zoning bylaws or customs shipping laws. Each industry will have its own set of regulations and standards and it’s your responsibility to do your due diligence.
There’s nothing wrong with researching copyrights and patents for a later date, but don’t get too carried away with protecting your idea in the beginning when you don’t have clients. Of course, there are some exceptions where your business has unique things about it that are important to success, such as having a patent pending. But those should be rare circumstances.
The same goes for incorporating. Many entrepreneurs rush to do so, thinking it will help protect them but there’s no need to rush. Follow the norm in your industry when deciding whether to incorporate right away. Some industries, like construction or international trade, advise that you incorporate right off the bat. Other industries, like those in food businesses, should incorporate for another layer of protection. But look at your own industry and make a decision based on that.
Entrepreneurs should look at liability insurance to help protect them from legal issues. On top of that, implementing other risk management practices into your business plan can help protect both you and your business.
- Set up a financial management system
What’s king or queen in business is cash flow. When you work for someone, you know you have an income but as an entrepreneur you don’t have that luxury anymore, so budgeting is essential.
You should have a separate bank account from your regular expenses and personal expenses and then have a simple tracking system. It could be something as simple as an excel spreadsheet, as long as you have some kind of system that’s tracking money in and out.
Don’t rely on an accountant or a bookkeeper at this point. You need to know a bit about money management as an entrepreneur. At some point when the business has grown, and you get overwhelmed, you can seek outside help.
- Watch where your money goes
Focus less on marketing and branding, and more on sales in the beginning. You need sales. Your whole emphasis should be on acquiring clients and getting feedback.
Fail fast, cheap, and often. Ensure your iteration and experimentation are over fast and don’t cost you a fortune. If you invest heavily in an idea and it doesn’t work out, you could be in trouble.
While sales need to be a focus, make sure to diligently watch and keep track of expenses. You need to understand what’s crucial for your business and spend on that. For example, consumer goods or a well-designed and professional website are important for some businesses. It’s not the time to be spending money on things that would be nice to have but are not that important. The same goes for avoiding any quick marketing schemes at first.
- Engage with your community
Lastly, you need to be attuned to both what’s happening in your industry and with your customers. That means that you have to be engaged in activities where you’re in front of the customers as much as possible, instead of sitting behind a computer. Even if you’re running a B2B business, go out to lunch and network with people in your industry. There’s a fallacy that you’ll do this all by yourself, but you’ll need to connect with others. The more you can make that a priority, the better off you’ll be. This way, you can stay up-to-date on what customers want and need and what’s happening in the industry.
To learn more about running a small business, visit our Resource Centre today!
Who’s Futurpreneur Canada?
Futurpreneur Canada is a national non-profit organization that has been helping young entrepreneurs across Canada for two decades. They provide financing, mentoring, and support tools to aspiring business owners aged 18-39. Futurpreneur Canada’s mentoring program works to match young entrepreneurs with a business expert from their network of more than 3,000 volunteer mentors.
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