Starting a new business can be an enticing undertaking. However, before you plunge yourself fully into the venture, you need to understand all the legal, economic and market hurdles you have to jump through in order for your startup to pick momentum and be profitable. If you need your startup to succeed, you need to have a concrete plan for the business from the word go. Here are some of the basics you need to know before you venture into your startup business.
A business plan is a key factor in any start-up. This is a written document that stipulates your business’ goals, objectives, strategies, financial projections and target market(s). It helps one set timely and realistic goals as well as how to secure external financing. A business plan also helps one be able to measure success, get clarity on operational requirements and set the tone for the business operation.
If you need external funding, the amount of financing you will get is highly dependent on the strength of your business plan. In order for any financial institution to advance loans for your startup, you must show the ability of your business to generate income.
A business plan is not just a paper about your business heart upon which the success of your start-up rests. It helps you set the stage for the business. Proper planning is the path to success.
It is good to know the sources of funding your business start-up. Is it personal finance or will you seek external financing? With this in mind, one is prepared to determine on how to secure the financing. In Canada, there is lots of government programs geared towards funding business startups. You can also seek out financing from friends banks or other financial institutions. Whichever source of financing you decide to choose, you should determine on how you will repay the loan.
When starting a company, one is faced with about three types of business structures to choose from. These are sole proprietorship, incorporation and standard partnership. It’s wise to decide on a company structure which is most appropriate for you. If you want to go solo, sole proprietorship is most appropriate, but if you want to share the risks with another party then you can enter into a partnership with a colleague or any business oriented individual. For those who want their business to be a separate entity from them, then incorporation is necessary.
Choose a Business Name
It is important to decide the name by which your business will be called. A good name can be a good form of marketing. Be sure that your business name is not in use elsewhere so as to avoid ambiguity. There are many ways to determine whether your name choice is already in use. You can use sites such as business name search Canada to determine whether the name is already in use.
Choice of Business Location
Location of business is a big determinant of the business’s success. Location determines the market strength, requirements for licenses and permits, applicable taxes, business laws, level of competition and availability of materials to be used in your business.