Small Business 101: Part Two
Welcome back to Small Business 101! In Part One we talked about choosing a product, and now that you (hopefully) have that important step nailed down, we're ready to dive a little bit deeper into the first steps of business ownership. This post is a little bit more involved so grab a pen and paper and let's get right to it!
After you've chosen a product or service, I strongly advise you make a business plan. In my opinion, a business plan is one of the most important steps in making sure your business is poised for success. Your plan doesn't have to be a full-blown presentation-worthy document, but you'll want to get clear on your goals and plans right away so that it's easier for you to determine your path to success (because there are many).
Carve out some time to research and think about some of the following questions:
- What is your product/service?
- What makes your business unique?
- What is your "why"? (Reason for starting the business)
- What needs or problems does your business meet or solve?
- What are the potential risks or challenges for your business?
- Who is your target market?
- Who is your competition
- What supplies and materials will you need for your business to be successful?
- What are your goals for the coming year? How do you plan to meet those goals?
- How will you keep records?
- What steps do you need to take to ensure you are legal and compliant?
- How will you measure your success?
- How will you sell?
- How will you advertise?
This is by NO means an extensive list. You can always search the internet to find additional examples of questions you can consider when making your business plan, or even some ready-made templates.
Name and Branding
You'll need a name for your business, and you'll also want to consider your branding colours, logo, and general aesthetic. These are all things that you can come up with yourself, or pay a professional to help with. I really enjoy this part of business ownership so I decided to do this part myself for both of my businesses. If you are not so interested in this part, Fiverr or Etsy have loads of people who are willing to help out for a small fee. While I'm all for saving money wherever possible (especially when just starting out), it's also important to recognize our strengths as well as areas where it's more efficient and cost effective to outsource. We'll talk in depth about outsourcing/hiring help in a later post.
If you're choosing a name other than your own, you'll need to register a trade name. This can be done fairly inexpensively at a local registry office. Please do your due diligence first and search (online, NUANS search, etc.) for businesses that already exist with similar names. Simply registering a trade name does not give you legal rights to that name should a conflict arise.
You'll also need to look up business licensing requirements in your area. Some cities or towns don't require licenses, some require both a development permit and a license, etc. So this information will be specific to where you live. In order to have a legal business you'll need to comply with the laws and regulations in the area in which your business will be operating. Google "(your city/town) business license" to get started.
Next you'll want to ensure that your product or service is compliant with local/provincial/federal laws and regulations. This step can feel quite daunting, but there are a few great resources to help you along the way. The Competition Bureau is the federal agency that governs compliance laws in Canada, and Canadian Compliance is a super helpful facebook group where you can find tons of information and ask questions. The Competition Bureau is there to help - they WANT businesses to be legal, compliant, and successful - so if in doubt, reach out to them with any questions you may have!
Getting insurance may or may not be necessary (depending on your specific circumstances) but I do highly recommend it. Personally because I work from home, my home insurance policy is voided if I operate a business and do not have a commercial policy. Some home insurance companies may be able to add a rider to your existing policy, so reach out to an insurance broker in your area for the best possible help and advice!
I highly recommend keeping your business and personal finances separate from the start. Loan yourself the money you need to get started up, and create a plan for paying it back. I opened a business account through Simplii Financial - the process is all online, it's very simple to apply, and best of all the bank account and all of my regular transactions are free! The app makes it easy to see exactly where my finances stand at any given moment. Simplii financial is an online bank owned by CIBC, so your money is protected by the CDIC (Canadian Deposit Insurance Corporation) which, as a former bank manager, was super important to me when choosing a bank. If you choose to go with simplii, you can use my referral link here to join, and we'll both get $50 if the conditions are met.
I opened three separate bank accounts right away:
- a chequing account for everyday transactions
- a savings account to set aside my GST/HST and money for income taxes until it's time to remit
- another savings account to save for bigger business purchases like a new industrial coverstitch or eventually a commercial space.
I know that's a lot of information all at once, so I'm going to leave it there for today. If you have any questions or just want to chat business, you can find my inbox at email@example.com or join our facebook group and post away! I LOVE talking through the steps and I am happy to help you find resources for your specific city or situation, or answer questions that weren't covered in this post.
For Part Three, we will be discussing: Choosing where to sell (Etsy, Shopify, Facebook - what's right for you?), finding your niche, logo and web design, and social media.
In Part Four we'll chat about preparing for your launch - This will cover topics like sourcing supplies, calculating profits and pricing, advertising, and more.
Thanks again for joining me! I can't wait to see your businesses grow.