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Thinking About Starting your own Biz?
People are attracted to the idea of owning their own small business for different reasons. You may crave the freedom and independence of being your own boss, have a business idea that keeps you up at night, want to make a lot of money or simply escape the nine-to-five job routine. more info
Launching your new biz?
PLAN the next three years of your small business, PREPARE for business launch, ORGANIZE your business operations. more info
Growing your small biz?
If you're reading this, you likely own a small business that's been operating for two years or more. To take your small business to the next level, the strategies and skills that launched your venture must now change. more info
Thinking About Starting your own Biz?
People are attracted to the idea of owning their own small business for different reasons. You may crave the freedom and independence of being your own boss, have a business idea that keeps you up at night, want to make a lot of money or simply escape the nine-to-five job routine.
Whatever your motivation, take comfort knowing you're not alone. Over one million Canadians will start a small business in the next year, and 20% of the workforce will be self-employed by the end of 2010. Clearly, entrepreneurship is Canada's hottest career choice.
This section of our website will help you to decide whether or not entrepreneurship is for you. We've assembled some valuable tools, useful links and insightful questions to help you to understand what's involved in running a small business, identify character traits of successful entrepreneurs and explore the ingredients of a great business idea.

What makes an entrepreneur successful?

An entrepreneur lives by the credo, "If it's to be, it's up to me!" More than anything, successful entrepreneurs are self-starters with a burning desire to bring their business vision to life.

Self-Assessment

Check out any of these excellent online aptitude tests designed to assess your "Entrepreneurial Quotient" or, in other words, help you to decide if you've got what it takes to be self-employed.

Key Characteristics of Entrepreneurs

An entrepreneur must be a lot of things. You must be a "multi-tasker", able to juggle different responsibilities and tasks all at once. You must be a good communicator, able to express your business idea and attract investors, employees, partners and customers. You must also be persistent, adopting a never-say-die attitude that will see you through the many challenges inherent to self-employment.
Here's a short list of key entrepreneurial attributes:

10 Important Personal Characteristics of Entrepreneurs

  • They are goal-orientated
  • They are committed to their business
  • They are very involved in the day-to-day running of their business
  • They thrive on uncertainty
  • They continuously look for opportunities to improve
  • They are willing to take risks
  • They are willing to listen and learn
  • They have good people skills
  • They have the ability to innovate and create
  • They have a positive attitude and approach

Which businesses are the best ones to start?

There are three ways to get into your own business:
  1. Buy an existing business
  2. Buy a franchise
  3. Start one from scratch
Each option carries its own advantages and disadvantages, but this section supports all three.
As we've said earlier, the best business for you is one that holds your personal passion and possesses marketplace opportunities. If you're curious about hot business trends right now, here's a partial list:
  • Low-carb food
  • Adventure travel
  • Organic foods
  • VIP pet treatment
  • Personal shoppers
  • Training & education
  • Online shopping
  • Cleaning services
  • Home entertainment
  • Hobby & recreation products/services
  • Exciting mini-vacations
  • Online matchmaking
  • Senior Care
  • Plus size clothing for women
  • Home renovations & decorating
  • Private medical services (dental, cosmetic, weight loss)

Do I need a lot of money?

Some of the world's biggest businesses were started with a few hundred dollars. Grander plans may require more money. It all depends on the type of business you want to launch. Service businesses are usually the least expensive, followed by retail and manufacturing.
While the actual amount of money you'll require will be determined when you prepare your Business Plan, there are certain types of financing you'll definitely need to assemble:
  • Capital. These funds are used to buy equipment, furniture, fixtures, vehicles, machinery, signs or any other hard assets to be used in your new business.
  • Working Capital. Insufficient cash flow is the number one killer of new small businesses, so you've got to get enough money in the bank to survive while you build revenue. Working capital is used to pay ongoing soft expenses to operate your business, such as salaries (including yours), heat, hydro, rent, professional fees, advertising and office supplies.
  • Personal Savings. The less you rely on your new business for a salary during its first few years, the easier it will be for your business to get on its own financial feet. Ideally, put aside enough personal funds to pay your own living expenses for one year.
  • Contingency Funds. No matter how well you forecast expenses, your new business will encounter some unforeseen costs. Set aside 10% of Capital Expenses for the unexpected.

How do I come up with a great idea?

A great business idea should combine your personal passion with marketplace opportunity. In other words, a business that pays you to do what you love. Believe it or not, entrepreneurs who start businesses purely for their profit potential eventually get bored. Entrepreneurs should have it all - health, wealth & happiness - so pick a business that gives you everything you want.
One more point about the value of a business idea: It's not worth as much as you may think. The value does not lie within the brilliance of your idea, but rather that you do with it. Planning, launching and running a small business is the real work - not coming up with the business idea. Execution is everything.
That said, here's the process to coming up with a great business idea:
  • Assess your interests, skills and hobbies. Look within to determine what you love to do, what you're good at doing, and, hopefully, something people will pay you to do.
  • Soak up business examples. Start reading business publications, attend franchise shows, walk around business districts and talk to people about products and services they like and don't like. Now that you've identified what you love to do, you must find an appropriate business for your particular passion.
  • Pay attention to trends. Trends are a pattern of buying behaviour that will last for years. For example, one trend is people buying mobile communications devices. Your goal is to attach your business idea to a growing trend full of sales potential.
  • The "A-HA!" moment. You'll know when it happens. It's when a business idea suddenly fits with who you are AND rides a growing trend.
  • Market research. Now that you have an idea, you must confirm your assumptions through market research. It simply involves doing your homework to ask your potential customers if they will buy your proposed product or service, when they'll buy it, where they'll buy it, why and how much they'll pay. It also includes checking out the competition to learn what you can do better. No matter how brilliant your idea may seem, do not skip the market research step. Without research, you could spend all of your money and time launching your business only to find out no one wants what you're selling.

What are the general steps to starting a biz?

Turning your small business idea into reality takes some time and sober thought. While the process to start your business may differ slightly, most businesses launch by following these broad steps:
  • Get training.
  • Conduct Market Research.
  • Source suppliers.
  • Develop a Business Model.
  • Write a Business Plan.
  • Get feedback on your Business Plan (A business coach or mentor will help.)
  • Obtain financing.
  • Set it up (legal structure, government registration, business permits, bank accounts, etc.)
  • Create your marketing materials.
  • Stock inventory or prepare services.
  • Develop internal systems & test them.
  • Launch!
  • Monitor, adjust & improve internal systems.

Here are the secret ingredients of a Great Business Idea:

  • Low start-up costs.
  • Minimal direct competition.
  • Should be easy to operate by yourself, at first.
  • Clear benefits to customers; saves people time, effort or money.
  • Rides a trend, has a strong future.
  • Holds your passion.
  • Uses your core skills.
  • Can be duplicated or taught to others.
  • People understand it, no need to educate the marketplace before you sell them.
  • Can be started part-time or after hours.
  • Minimal risk. Service-based businesses are usually less expensive and risky to start than manufacturing or retail businesses.
Launching your new biz?

Congratulations - you've decided to become an entrepreneur!

At this stage in your business development process, you've probably determined you have what it takes to succeed, settled on a business idea, found some partners, secured the support of your family and friends and started on your Business Plan.
What's next? We believe you should follow three steps to successfully launch your new biz:
  • PLAN the next three years of your small business
  • PREPARE for business launch.
  • ORGANIZE your business operations

Planning

If you haven't completed a Business Plan, stop now and invest the time and energy to create one. A Business Plan will help you to think through all aspects of your business, establish strategies and organize your efforts going forward. Most new small businesses fail because owners skipped this critical step.

Preparing

Preparing includes all of the decisions and tasks to be completed before you open up for business. You must decide on a legal structure (Sole Proprietorship, Partnership or Corporation), register your Business Name, hire an accountant or bookkeeper, set up bank accounts, obtain a Merchant Account to take credit card payments, raise financing, create a brand and the list goes on.

Organizing

You're in business the minute you have one customer, so you've got to get have things organized now. In this step, it's important to set up your physical working space, create files, design forms, establish systems and perhaps train your staff. Invest time and resources now to organize your business to ensure a smooth opening and first operating year.
Your roadmap to success lies in your Business Plan. Completing a plan forces you to organize your thoughts in logical order, helps to identify potential flaws in your model and assists you in making decisions. Most importantly, a Business Plan becomes your working action plan. It's also essential if you want to raise money from investors or obtain bank financing.
Certain sites offer free business plan templates (try www.bdc.ca or www.cbsc.org), but it's what goes into your plan that matters. Here are the steps to developing a Business Plan:
  1. Prepare a professional looking title page & Table of Contents.
  2. Prepare an Executive Summary (do it last but leave space now). Highlights the "who, what, where and why" of your small business.
  3. Write a Business Description. Tell your readers about your product(s)/services(s), your industry, what makes your business unique and why you believe it will succeed. Write a Mission Statement and include your Business Vision.
  4. Marketing Plan. The most important section of your plan presents your sales objectives, strategies to achieve them and tactics to be engaged. It should also include your Market Research work.
  5. Staff & Management Team. Who's running your show? Share a bit of your resume with readers, highlighting your relevant experience and that of your business partners. Identify key staff positions you'll fill during the first few years and the functions those people will perform. Draw an Organizational Chart.
  6. Financial Plan. Identifies how much money you'll need to start up and operate your business month to month. You must also figure out your pricing, margins and cost of goods sold. It's best to prepare two years of projected financial statements for Cash Flow, Income Statement & Balance Sheet.
  7. Operating Plan. How will your business function day to day? Explain how you will acquire or manufacture products, perform services and serve your customers. You must also identify where your business will locate and what type of premises you will require (ie. Storefront, studio, warehouse, office or home office).
  8. Technology. Figure out your technology requirements and list them in your plan, including computer systems, fax machines, software, websites, telephones, mobile communications devices and servers. Be sure to establish a technology budget and identify who will maintain your equipment.
  9. Attach any supporting documents, charts or graphs in your Appendices Section. It's always easier to refer to accompanying items then to stuff them in the body of your Business Plan.
  10. Go back and write your Executive Summary, extracting highlights from sections 3 - 8.
  11. Prepare and attach a Non-Disclosure Agreement (NDA), to prevent anyone reading your plan from divulging its contents.
  12. Ask a qualified professional to review your plan and make suggestions to improve it. Find a banker, lawyer, accountant or business coach willing to look it over.

How do I decide on a business structure?

The three basic types of business structure are Sole Proprietorship, Partnership and Corporation. Most businesses start out as Sole Proprietorships, meaning the business and you are the same. Partnerships are basically two sole proprietors operating under one name. Corporations can be provincial or federal, and create a separate legal and accounting entity.
The right business structure for you depends on a number of factors, including the amount of risk in your business, whether or not you want to sell shares to raise capital and if you're flying solo or working with someone else.
BizLaunch Coaching or Training will help you to understand each business structure and select the right option for your venture. Or, you can consult with a lawyer, accountant or banker for some advice. You can learn more at www.cbsc.org.

Where do I register my Business Name and what should I know?

There's a difference between registering your business name and owning it. Any one can register a name with the government and start operations, however, you don't own that name because you haven't searched the government's database for conflicting name use.
Registering a business name requires a business name search to make sure no one else is using it, or that no business is using a similar name. Business name searches are usually done as part of incorporation and it's easiest to conduct your search at www.cyberbahn.ca. We also recommend that you speak to a lawyer to review your business name search results.

Should I seek legal advice?

A lawyer will help you to set up your new business properly. He or she can assist you with incorporation, business name searches, trademarks, patents, copyrights, partnership agreements, shareholder agreements, government filings, leases, employment contracts, sales contracts and much more.
While a lawyer will certainly charge for their services, it's usually money well spent to avoid legal problems down the road.
Visit our BizDirectory to find entrepreneur-friendly lawyers approved by BizLaunch.

Where do I set up my government accounts? (GST, PST, Employer & Income Tax)

In Canada, you are required to set up certain accounts with the government. Those typically include a Business Number for income tax purposes, a GST account, a provincial sales tax account and an employer account. A Business Number (BN) will be assigned to your business once you receive your Master Business Licence, available at www.cbsc.org or www.cyberbahn.ca. Your BN is used to open additional accounts with the government such as GST.
BizTIP: Although you aren't required to collect and remit GST until your sales hit $30,000 per year, it's to your advantage to register for GST now. You'll be able to claim GST on expenses paid to build your business.

Do I need to get a licence or permit?

Certain types of new businesses require different licences or permits, as directed by municipal or provincial governments. For example, if your new business will prepare food, supervise children, manufacture a product or sell to the public you should investigate required permits and licences.
Visit your local city hall, government-run Enterprise Centre or www.cbsc.org for details.

What can an accountant or bookkeeper do for me?

You may set up and maintain your "books" (expenses, invoicing & banking) using small business accounting software. Or, you may hire a professional bookkeeper or accountant to manage your accounting records and prepare your tax return. It's important to note that incorporated companies must use the services of a professional accountant to at least verify the records before submitting them to Revenue Canada.
Here are a few reasons to outsource your bookkeeping:
  • You're not an Accountant. Professional Accountants know their stuff - that's their job. They know the rules and regulations imposed by Canada Revenue Agency. What you don't know could cost you.
  • Missed Write-offs. It's every business owner's job to reduce the amount of taxes they pay by embracing every legal write-off available. You'll recoup the fees charged by a good bookkeeper or Accountant from the write-offs they discover for you. (For example, under certain circumstances, did you know you can write-off haircuts?)
  • It's all about your cash in the bank. It's cash flow that matters most for the first three years of business, not profits or losses. Pay attention to your bank account and hire others to worry about your financial statements.
  • You should be out selling. Too many small business owners get comfortable behind their desk crunching numbers, when they should be out drumming up business. A new small business owner should spend 70 percent of their time on marketing and sales. There won't be much money to track if you don't have any customers.
One of our BizLaunch BizPartners is EZ-AS-ABC, and they offer an amazing all-in-one bookkeeping and accounting package specifically designed for small businesses.

How do I keep good records?

In business, it all boils down to the numbers. Good bookkeeping records will help you to monitor your business's performance, track expenses and manage operations. Plus, you'll need audited financial statements (verified by an Accountant) if you're seeking bank financing or investors. Bottom line, keeping good records is crucial to the life of your small business.
Keep a separate file for your expense receipts, your invoices, your bank statements and your deposit slips. It's best to bundle these files by GST reporting period, such as monthly or quarterly.
Get in the habit of inserting your receipts and invoices into those files every day. If you're managing your own accounting records, set a time each week or month to enter your income and expenses into your accounting software. Or, if you're using a bookkeeper or accountant, send over your file at the end of the month.
Remember: You're required by law to keep all of your financial records (invoices, receipts, bank deposit slips) for 6 years in case Revenue Canada audits your business.

What expenses can I deduct from my revenue?

As a business owner, your goal is to produce a profit yet minimize the amount of tax you pay. That means taking advantage of every allowable business expense to offset your net revenue. Again, a professional bookkeeper or accountant will know write-offs you don't and save you the hassle of managing your own records and preparing your own income tax return.
Here are some common business expenses you may deduct from your revenue:
  • Automobile (lease payments, gasoline, parking, insurance & repairs)
  • Rent
  • Office supplies
  • Vendors
  • Interest on loans
  • Client meals & entertainment (at 50%)
  • Training
  • Heat & hydro
  • Portion of your home costs for a home office
  • Advertising
  • Printing
  • Business travel
To find out more about allowable expenses, contact Canada Revenue Agency at www.cra-arc.gc.ca

Where do I get my start-up money?

Raising cash for your new small business is an important part of the start-up process. New entrepreneurs typically raise money from five different sources:
  • Friends & family. Called "Love Capital", you may be able to borrow or obtain money from your personal circles. Be professional about it by writing down any agreements to do with terms, repayment or interest. Be careful not to borrow too much.
  • Personal savings. You've got to belly up some cash of your own, so look to your personal savings to see how much you can safely invest in your new business. Be sure to hold some back.
  • Banks. Banks offer different types of financial products for small businesses, including commercial loans, lines of credit, business credit cards and overdrafts. Be prepared to present your Business Plan and to authorize the bank to investigate your credit rating.
  • Advance sales. It's possible to raise some start-up money by pre-selling a customer to collect a deposit, retainer or advance on an order.
  • Supplier credit. Talk to your suppliers about extending payment terms to 90 or 120 days while you can get sales rolling.

How important is a Marketing Plan?

Your Marketing Plan is the most important section within your Business Plan. After all, it will describe how you plan to generate revenue.
Your Marketing Plan should be structured to include:
  • Objective. A good objective is measurable, clear and time-based. For instance, your objective might be "To generate sales of $150,000 by December 31, 2007" or "To increase product market share by 2% within 24 months".
  • Strategy. Your marketing strategy describes how you will obtain your objective. It's your approach to reaching your goals, such as "We will develop a national re-seller network of retailers to bring our products to market."
  • Tactics. Tactics include the details of your strategy, across the "Four Ps" of marketing: Product, Price, Promotion & Place.

How do I create an identity?

Beyond mere words, your identity combines three elements: the legal name of your company, a logo and a descriptor.
Your business name should clearly express what you do. Avoid being clever, mysterious or ambiguous when choosing your words. ‘Smith Consulting' won't tell your prospective customers very much about your enterprise.
Begin by creating three columns on a piece of paper and list words that best describe your business. Play with word combinations until you generate a short list of three name possibilities. Limit each of your names to three or four words. Test market your short list of names with colleagues and prospective customers. (Legal considerations and how to register your business name will be presented in the next column.)
Next, develop your one-line descriptor. Also known as a slogan or tag line, your descriptor will ideally include a benefit statement relevant to what you do. For years, the identity of BMW included their well-recognized round logo, the acronym ‘BMW' and their slogan, "The Ultimate Driving Experience."
Finally, add a visual to your words. Known as your logo, a good graphic will help communicate what you do and contribute to a memorable identity. Hire an experienced graphic designer to produce three different design drafts.
Again, do your homework by soliciting feedback on your draft designs from business people or customers before selecting a final version.

How do I conduct my market research?

There's one golden rule small business owners should follow: Ask your customers first. Too many new entrepreneurs become over confident in their brilliant business idea and skip the market research step. No matter what your business idea, you must check it out first with the people who will eventually buy from you.
Market research also includes investigating the industry you are proposing to enter, assessing your direct and indirect competition, looking into any applicable government regulations, noting trends, threats and opportunities.
Here are the most important areas to research:
  • Your competition. What are their strengths? What are their weaknesses? You should know everything you can about companies going after the same customers.
  • Your customers. Collect as much information about your potential customers as you can so you don't second guess what they want. Who exactly are they? What drives them to buy? Where are they located? How often do they buy? Why do they buy from your competition? Collect information directly from your potential customers by conducting surveys, interviews and focus groups.
  • Your industry. Look into the overall business sector to identify industry publications, trade shows, common issues, government regulations and anything else that may indirectly affect your company.
  • Your suppliers. Identify who can support your business with products and services, and find out if your potential suppliers also serve your competition.

How can I organize my business to run smoothly?

A business is simply a set of systems - processes and procedures people running the business follow in order to build a product, perform a service or manage operations. In fact, everything your business does is a system, right down to the smallest task such as the way you answer the phone. Big corporations got that way by perfecting their systems (McDonald's) or integrating thousands of complex systems (IBM).
Systems ensure your business can do two things: Deliver a consistent experience for your customers and run without your day to day involvement.
Your job is to simply develop, record and perfect your small business systems. How? By documenting all of the steps you take to complete every task
Sound confusing? Here's a sample system to Invoice a Client...
  • Obtain copy of sales contract from salesperson.
  • Open a blank Invoice Form on the computer.
  • Insert the client's mailing address.
  • Insert the purchase date.
  • Enter a description of the client's purchase.
  • Enter the sale amount.
  • Add 7% GST.
  • Assign an Invoice Number.
  • Print 3 copies of the Invoice.
  • Print one #10 envelope with the client's mailing address.
  • Fold one copy of the Invoice and insert into the addressed envelope.
  • Enter the amount of the Invoice in your accounting software as an Account Receivable by the due date.
  • Place one copy of the Invoice in the Client File.
  • Place another copy of the Invoice in the Accounts Receivable File.
  • Mail the envelope to the client.
As you can see, even the smallest tasks contain many steps. And, many of those steps interrelate with other tasks (such as Sales). By thinking through all of these steps and writing them down - no matter how mundane they may seem - you will create your very own Operations Manual.
Your Operations Manual is critical to your small business, because it will tell new employees and others exactly "how things are done" in your small business. McDonald's doesn't let its managers decide how to make a burger - that system is meticulously documented in the company's Operations Manual so that no one may deviate from proven methodology.
(Want to learn more? Read "The E-Myth Revisited" by Michael Gerber.)

Why do most new small businesses fail?

Canadian statistics indicate 80% of new small businesses will close within the first five years. Why? Reasons may vary, but the main cause is insufficient cash flow. A new small business owner usually doesn't take the time to prepare a proper Business Plan, which forces him or her to research costs, project sales, test assumptions and otherwise plan ahead. Operating blindly and without focus, a business owner becomes reactive, choosing to "wing it" by day to day decisions. There's no real revenue momentum because there's no direction for the business to move in, and cash will eventually run dry.
Entrepreneurs can also become over optimistic about their new ventures, telling themselves that customers will rush to buy their product or service and riches that the will soon pour in. Convinced that big money is just months away, a new entrepreneur may decide to "live it up" and spend more than they should on business expenses.
It always takes longer than expected to build small business revenues. If you're planning your new business, be conservative with your timelines. Over estimate your expenses and under estimate your revenues - and extend the time you think it will take for the money to materialize.

What books are helpful at this stage?

Answer: Starting or growing a small business? Head to the bookstore for some BizLaunch recommended reading:
  • Guerilla Marketing by Jay Conrad Levinson
  • Million Women Next Door by Thomas Stanley
  • The One Minute Millionaire by Mark Victor Hansen & Robert Allen
  • Small Business Guide - by Douglas Gray & Diana Gray
  • Selling Your Services by Robert Bly
  • The Aladdin Factor by Jack Canfield & Mark Victor Hansen
  • Start Small Finish Big by Fred DeLuca
  • Smart Strategies for Growing Your Business by Terri Lonier
  • Trading Up - Michael Silverstein & Neil Fiske
  • Business for Beginners by Francis McGuckin
  • The Wealthy Barber by David Chilton
  • The Seven Strategies of Master Presenters McRae and Brooks
  • The E-Myth Revisited by Michael Gerber
  • The Way of the Guerilla by Jay Conrad Levinson
  • Visionary Business by Marc Allen
  • 1001 Ideas to create Retail Excitement - Edgar A. Falk
  • How to Think Like a CEO - D.A. Benton
  • Getting Everything You Can Out Of All You've Got - Jay Abraham
  • Beat the Taxman - Stephen Thompson
  • The 80% Minority - Joanne Thomas Yaccato
  • The Ultimate Sales Letter - Dan S. Kennedy
  • The Beermat Entrepreneur by Mike Southon & Chris West
  • Secrets of Power Presentations by Peter Urs Bender
  • Psychology of the Hero Soul by Sharif Khan
Growing your small biz?
If you're reading this, you likely own a small business that's been operating for two years or more. To take your small business to the next level, the strategies and skills that launched your venture must now change.
No doubt you've learned a lot since you started out as an entrepreneur. You've established a brand in the marketplace, secured some customers, developed internal systems and perhaps hired some employees. You've also likely survived a few scary moments! Now, you're anxious to build on your success and grow your operation so you can earn more, work less and reduce stress. You may even be ready to duplicate your business model by opening more locations or franchising.
This section of our site will help you to answer some of the more common questions that business people ask. If you have a specific question, feel free to contact us anytime.

How do I grow my business?

You'll know your small business is growing when you see revenue increase, add employees or suppliers and get a sense your brand is being accepted in the marketplace. You'll likely have more customers to serve and be less worried about day to day cash flow.
The Launch Phase of a new business usually consumes two years, but individual situations may vary. By Year 3, your small business should be getting on its feet financially. Because so many businesses fail within the first three years, those that survive that milestone are usually around for many years to come.
While there's a lot to discuss about growing your small business, here are some key recommendations:
  • Delegate non-essential functions. You should spend more time working on your business rather than in it. As the business owner, it's your job to manage operations, not to do the day to day work. Your time should spent supervising the work of others, pursuing new customers, creating new opportunities for growth and perfecting your small business systems. That means letting go of routine tasks to other people or suppliers, such as bookkeeping (EZ-AS-ABC), maintenance, ordering, production and administration.
  • Develop relationships. Too often, a business owner gets so bogged down with day to day business operations he or she neglects to spend time with important customers or suppliers. While your staff may handle ongoing customer service, it's your job to ensure your customers are happy with your business. Make phone calls, arrange lunches and schedule coffee with them. Strengthening relationships requires a commitment of your time. You may also unearth some new business opportunities.
  • Analyze your financial statements. A bookkeeper or accountant may take care of your record keeping and generate financial reports, but it's your job to manage your company's financial performance. Financial ratios help to monitor key performance indicators, such as your Current Ratio, used to quickly determine your company's ability to meet its short term debt obligations. Work with your accountant or a business coach to learn which numbers and ratios are most important.
  • Create systems. As we've said earlier, systems are the backbone of any business. Look for ways to improve how your business performs various processes and procedures. A good system will perform a set of tasks faster, save you money and be easily managed by someone other than you.
  • Market Constantly. Your sales team will handle ongoing sales and serve existing customers, but you should always be working to improve your business marketing. Look at your brand, revamp your brochures, research advertising choices, and embrace media opportunities for free publicity. If you've hired professional marketers or agencies to handle those areas, spend more time with them.

When should I incorporate?

There are several reasons to incorporate your business, either federally or provincially. First, you'll usually enjoy tax savings. Sole Proprietorships and Partnerships pay more tax because their rates are higher. We advise any entrepreneur with revenues approaching $60,000 a year to consider incorporating in order to save money on taxes.
A second reason to incorporate is the protection it offers. A corporation is a separate legal and accounting entity, controlled by its shareholders. It's like an artificial person. If a Sole Proprietor or Partnership gets sued, the business owner is also in the hot seat because, legally, the business and the owner are the same. Assess your risk exposure based on the nature of your work. Is it dangerous? Does your business use complex machinery? Are you giving advice to your customers? Do you sell a product that could potentially hurt someone? Talk to your lawyer about the advantages of incorporation for your particular business situation.
Finally, a corporation can raise cash easier than a Sole Proprietorship or Partnership because it can offer shares in exchange for investment. While it's important to retain majority control of your corporation by hanging on to at least 51% of your shares, you may decide to let go of some shares to get some expansion money.
Most lawyers can do incorporation work for you, or, you can incorporate yourself online at Cyberbahn.

I'm ready to hire. What should I know?

There's no faster way to grow your business than to hire new people. As we've said earlier, you must let go of certain functions to others, so you can spend more time working on the business and less in it. A successful business is one that makes you money while you're not there, because your finely tuned systems allow your employees to run the show without you.
Before you hire, it's important to understand your legal obligations as an employer:
  • Opening an Employer Account with the federal government. Similar to your GST and Income Tax, you must contact the Government of Canada to open up an Employer Account. Under that account, you'll be required to remit monthly your employee Source Deductions (the income tax you deduct from their paycheque, and contributions to Canada Pension Plan and Employment Insurance). Contact Canada Revenue Agency at (www.cra-arc.gc.ca) for help.
  • Mandatory Employer Related Costs (MERC). As an employer, you must "top up" your employee's contributions to the Canada Pension Plan and Employment Insurance. While the rates may change, currently for every $1 your employee contributes, you'll likely contribute another $1.50 from your own pocket. See Canada Revenue Agency (www.cra-arc.gc.ca) for details.
  • Paying your employees. Whether it's once a week or every two, you must pay your employee salaries or wages on time. Cash flow problems are your own, so make sure you can afford to hire and pay people regularly.
  • Employment Act. Employees don't have to work the same crazy hours you do. They're also entitled to breaks, Vacation Pay, Overtime Pay, a safe work environment and more. Investigate your responsibilities with Human Resources and Social Development Canada (www.hrsdc.gc.ca/en/home.shtml) or Strategis (www.strategis.gc.ca) or contact your local Enterprise Centre (www.cbsc.org).
  • Hiring and firing. As an employer, you aren't allowed to ask certain questions during an employment interview (including questions to do with marital status, religion, sexual orientation). You must also tread carefully when terminating someone's employment. Find out what you can and cannot do by contacting Human Resources and Social Development Canada (www.hrsdc.gc.ca/en/home.shtml).

How do I franchise?

If your business model is profitable and successful, you may want to consider franchising to expand your operations. Franchising involves licensing the use of your business brand and systems (that Operations Manual!) to other people. As a Franchisor, you'll charge a one-time Franchise Fee and collect ongoing Royalties from your Franchisees.
Almost any type of business can be franchised, but it's a complicated process that requires some investment and expert counsel from lawyers, accountants, bankers and professional franchisers. For more information about buying or selling a franchise, contact The Franchise Connection (www.frannet.com) or the Canadian Franchise Association (www.cfa.ca)

I need financing to expand. Where do I get the money?

Every growing business needs some type of money to expand. You may require capital to purchase equipment, buildings, machinery, vehicles or other hard assets. You may need working capital to pay for softer costs, such as salaries for new employees, advertising, renovations or professional fees.
Here are some common sources of expansion dollars:
  • Banks. If your business is credit-worthy and shows a healthy Balance Sheet, you may be able to borrow against your equity or assets. Contact your account manager to investigate loans, overdraft accounts, lines of credit or a VISA Business Card (www.visa.ca/smallbsuiness).
  • Investors. Incorporated companies can sell shares to outside investors for some cash. Talk to your lawyer and accountant to set it up.
  • Personal investment. Don't want to go in to debt or sell a piece of your business? Consider investing your own money. But, don't risk your family's well being by investing too much of your own cash.
  • Leasing. Instead of borrowing money to buy equipment or vehicles, consider leasing them instead. You'll be able to write-off the lease amounts on your Income Statement.
  • Suppliers. As the customer, your vendors want to see your business grow so they can sell more to you. Suppliers may be willing to extend payment terms on good or services to help you expand.
  • Government Programs. There are many different programs available to help businesses expand, import, export, hire new people, train people, reduce energy use, protect the environment and more. Go online to Strategis Canada (www.strategis.gc.ca), Business Gateway (www.businessgateway.ca) or visit your local Enterprise Centre (www.cbsc.org) to investigate your options.

Should my marketing focus change?

When you're launching your business, you must focus on attracting new customers in order to generate revenue. As your customer database grows along with your business, your focus should turn to serving existing customers. Too many entrepreneurs ignore their existing customers, the ones who were with them from the beginning, to chase exciting new prospects.
Remember the expression, "a bird in the hand is worth two in the bush". Pay attention to your existing customers by creating loyalty programs, organizing customer appreciation nights, sending them newsletters and simply staying in touch. Never, ever, take your existing customers for granted.
As a growing business, your marketing should embrace two or more of these four strategies:
  • Attract new customers. You should always attract new customers, but not at the expense of existing ones. Sales, advertising, publicity and referrals are typical methods to obtain new clients.
  • Increase customer buying frequency. Once you land a customer, you want them to buy from you again and again. Look for ways to keep them coming back. (Jiffy Lube places a sticker in your windshield suggesting your next oil change should be within 5000 kilometres.)
  • Increase purchase volume. What can your business do to get customers to spend more each time they buy? Convenience stores master this strategy with easy-to-grab items at the point of sale.
  • Retain existing customers. It's a lot less expensive to keep existing customers happy then it is to attract new ones. Make your business irresistible by delivering exceptional customer service, offering rewards or specials to your best customers and simply paying lots of attention to them.
For more advice on marketing, see our list of Recommended Business Books or contact BizLaunch.ca anytime.
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