Introduction
Are you considering starting your own small business? Though times have been turbulent lately, we are finally starting to see the light at the end of the pandemic tunnel. Starting your own business can be the beginning of a new life for you – especially if you’ve taken this last year to change your career path or have decided to spend more time building financial security for you and your family. Though not without challenges, opening your own small business can be a game-changer for you. If you’re considering taking the plunge and becoming a business owner, then you won’t want to miss this piece. Keep reading to find out everything you need to know about starting a small business for the very first time.
Why Start a Small Business?
If you are one of the millions of Canadians who was let go from their job in the last 18 months due to the pandemic, you may be interested in building more financial security for yourself. Owning your own business can help guarantee job security if your company is successful. You can control your own financial future and once your business begins to take off, you may also be able to make your own hours and spend more time with your family. If there is one thing this pandemic has taught us it’s that work isn’t all that matters. Family and good health certainly top the list and it’s important we prioritize that even as we start to rebuild our economy.
If you’re thinking of going into business for yourself, it could be great for you. However, you have to be ready for challenges, adversity, and some hard work. You should also be well-prepared so you don’t get in over your head and end up in trouble. No matter how great your business is, there is never a guarantee that a new business will survive. But there is plenty you can do to help ensure your new business is prosperous and minimize your losses should things go south. Here are 10 things every new small business owner should know.
1. Conduct Market Research
Before you order your custom envelopes and stationery, you should conduct market research. First, see what competition there is and how to figure out how you can be different from them if you want to stand out. You should also do research to find out if there is a need for your business and if people in your area would have an interest in it. You can conduct market research by cold calling, sending out polls, or visiting resident’s door-to-door. If your business is an online business, you can cast a wider net and survey people via email or on social media. If your business idea has tons of competitors, you’ll have to find a way to differentiate yourself for your business to succeed.
The next step in market research is to verify what alternatives your target customer has and what the price point is. Can you offer a lower price or better value? Can your target audience afford your products? Do they need or want what you have to offer? All of these elements are important for shaping your business goals and developing a successful business plan.
2. Create a Business Plan
A detailed business plan will be a key part of developing your small business idea and will also play a key function in securing you the funding you need to get started. A good business plan will tell your future investors what your business is all about and what makes it special. This is also a great way to flesh out ideas and swap out whatever doesn’t work and replace it with a more functional option. Here are the main things your business plan should include:
- Summary: This is a brief explanation of what your business is, what makes it stand out, and why the market needs your small business.
- Company information: This is a chance to explain who the company will be run by, where you will find workers, and which types of professional roles you’ll need to fill to make your business run.
- Market research analysis: All the details of your market analysis should go into this so your future investors can see what value your business brings to the table.
- Management: How will your company run? Who will be responsible for what? This section should detail how your business will operate on a daily basis.
- Service or product offerings: What are your selling? This section should clearly explain what products or services your business will be selling.
- Marketing needs: In this section, you should outline what marketing you can do to reach your target audience and how much this will cost you on a monthly or annual basis.
- Funding: This is the most important part of the business plan because it tells your future investors exactly how much money you need to get this project off the ground and this is what they want to know before moving forward.
- Financial projections: Right after they find out how much you want, your investors will want to know when they can expect a return on their investment. To properly develop financial projections, you have to estimate sales and realistic costs so you can provide a timeline for return on investment that is close to accurate as possible.
3. Apply for Funding
You will most likely need to apply for funding in one way or another to get your business off the ground. Whether you get your capital from investors, a bank, or through a small business loan at BHM Financial loan, funding is the key to your company’s success. The seed money you receive will help you buy materials, pay employees, produce products or services, and cover other start-up costs. To apply for a small business loan, you will need a detailed financial plan to show the investors you are reaching out to so they can evaluate the project from A to Z. If you can’t apply at a traditional banking institution due to poor credit, don’t despair. BHM Financial offers bad credit loans to small businesses.
BHM Financial can loan you up to $15,000 with up to 25 years of amortization. You can take a cash loan or a line of credit loan to back you up in case of any surprises once you launch your new small business. You can choose to pay back monthly or daily so you can minimize interest. There is so much flexibility with a BHM small business loan to help maximize your chances of building a successful business.
4. Select a Location
No matter what type of business you are in, it’s all about location, location, location. Even if you are running an online business, you need a place to hold your stock. Your business place should be able to accommodate your inventory and offer enough space for you and your staff to work comfortably. The location should also be easy for you to get to and as affordable as possible. Minimizing overhead costs, especially in the beginning, is an important money-saving tip. You need a functional space but you also have to be able to comfortably afford it.
If you require a large staff, you should also consider choosing a central location that is easy for your employees to get to. If at all possible, it’s worth considering setting up shop near your suppliers, as well. This can make it simpler for you to get supplies on a tight timeline if needed. Another thing to consider when choosing a location for your business is its proximity to competitors. Is it a pro or a con to be near competition in your line of work? All of these factors are very important to consider when selecting the right location for your new small business.
5. Apply for Federal and/or Provincial Grants
Did you know the government offers small business grants on both the federal and provincial levels? These grants can sometimes make it much simpler for a business to operate. If you want to be considered, you should find out more information on the government’s website. There you’ll find all the details you need about what grants are available to you. If you are not eligible for grants, you may be eligible for tax credits. All of this information can help you save money so enquire about them as soon as possible in the business development process.
6. Define Your Target Customer
In order to make sure your business is a success, you should identify a target customer. Build a detailed plan for who this person is: their age, gender, income, level of education, marital status, economic status, interests, etc. By defining who your ideal customer is, you’ll be better equipped to target your audience through effective marketing strategies. Marketing is a key element to a successful business. If you know who the target customer is and what their interests are, you’ll know how to get their attention and direct them to your business.
7. Stick to What You Know
If you are planning to open your business, try to stick to a type of business you know well. For example, if you have worked at an auto repair shop for 20 years, you are well-positioned to start your own auto repair shop. You know the customers, the suppliers, the work, and the workflow well enough to get your own auto repair shop off the ground. You also understand costs and expenses very well. But if you make a transition into a field you know nothing about, you may have some unforeseen problems. How can you evaluate the expenses if you’ve never worked in the industry before? How can you evaluate ways to snuff the competition if they have 30 years of experience in this line of work and you’ve never worked at it a day in your life? In order for a business to be successful, it takes more than just a good idea. It takes the ability and the know-how to grow that business from the ground up. To maximize your chances of building a successful business, stick to a business you know well.
8. Keep Your Eyes and Ears Open
When you’re starting a small business, you’ll gear loads of unwanted advice from just about everyone – from your spouse to the mail person! Some opinions may need to be taken with a grain of salt, but it’s still important to take in everything you hear. What is the general reaction you get when you discuss your idea? Remember, these people could be your target customers. If they find your idea to be really exciting, then it means your idea could be a success. If just about everyone has an adverse reaction to it, it could mean your idea needs a little more refining. Know someone who started a business and failed? Great! They may lot of tips on what to do and what not to do based on their own personal experiences.
Not all the information you get will be useful. In fact, you may have to sift through it all to find a few nuggets of information that are worth knowing. But information is about the only thing you can get while starting a business that comes completely free. Open your ears and your mind and listen. Someone just may have some ground-breaking information for you that can make all the difference in your company’s success.
9. Invest Today to Save Tomorrow
It’s crucial to save money in the early stages of building a business, but don’t skimp on essentials. While reducing overhead costs is fine, it’s not worth skimping on legal advice and accounting services. You need to know everything about your business before you get into it. If you are not following the legal requirements, you can get stuck with hefty fines or even end up with a cease-and-desist order. To ensure your company doesn’t suffer down the line or end up incurring astronomical fines, pay the right experts to help you assess your business ad get it started properly.
Lawyers can help you get your business started, fill out the necessary paperwork, and ensure you aren’t at risk for a copyright lawsuit. Accountants can ensure you are following all taxation laws in your province so you don’t get stuck paying income taxes you weren’t expecting later on. They can also help you discover government grants and other small business funding programs you may not have heard about on your own. It’s well worth the upfront cost to hire professionals to guide you through.
10. Hire Experienced Employees
Starting your own business isn’t just a great opportunity to hire your out-of-work friends and family. In fact, this could be a recipe for disaster. Instead, try to hire experienced staff who are familiar with this business. They can help provide a smooth workflow and a better working environment. Two heads are better than one and ten heads are certainly better than one. The more experience you can get started with, the greater your chances for success. You can also skip the need for training employees if you start with experienced ones. You can also decide to choose a few key experienced workers and have them hire and train newbies. This can save you time and money in the long run. Just try to find at least a few experienced workers who can help you get off on the right foot and build a successful future for your small business today!
How Can a Loan Firm Help My Small Business?
Loan firms are often direct lenders. That means they don’t work with anyone else and don’t require other parties to approve our loan requests. BHM Financial can review and accept loan requests in 24 hours or less! In addition, BHM’s expert financial advisors can help you with financial planning. They can help you build a business plan, estimate costs, choose a loan amount and repayment plan that works for you, and they can also help you understand your borrowing capacity.
You can also shop around and choose the loan firm that best fits your individual needs. For example, you can try Cash Loans Canada if you’re looking for quick approval on a bad credit loan. If you have bad credit, securing a loan is often a challenge. Cash Loans Canada will never evaluate your credit history or credit score when offering a loan. They base their decision to give you a small business loan on your income and on your business plan. Their goal is to help Canadians achieve their dreams, with or without debt.
Quick Loan is another lender you can turn to if you are looking for financial advice in addition to your loan. This is particularly helpful if you aren’t sure how to go about getting a small business loan that works for you. They can explain the whole process to you and help you make the right financial decisions to better your business and achieve success. If you aren’t sure where to start allocating your funds or how to build your business from the ground up, a financial expert can help. Book an appointment for a consultation with one of these loan firms in Canada to start growing your business today!