This checklist will help you gather the resources you need to get started.
1. Make sure you’re ready
Being your own boss has its benefits, but it also has many risks. Take an inventory of your personal characteristics to make sure you’re ready to take on the responsibility of a new business.
Do you have the time, confidence in your idea, and strong sense of responsibility it takes to be an entrepreneur? Do you have management, accounting and marketing skills, and an understanding of the economy?
There are many ways to get started in business, and by no means do you have to go it alone. Find out some of the different ways to get involved in a new business.
2. Decide on a legal structure
There are 4 types of businesses: sole proprietorships, partnerships, corporations and cooperatives.
In an unincorporated sole proprietorship, you as an individual are the sole owner. You get all the benefits, but you also assume all the risks. A partnership is similar except revenues are shared with one or more partners. In this case, a formal written agreement should be created to mutually agree upon terms.
Corporations are considered legal persons and separate entities from owners, the stockholders. Lastly, cooperatives are made up of people who seek to satisfy the same economic or social need, and have come together to run a business according to cooperative principles.
Which type of business you choose will depend on many factors, including your personality, the nature of your business, and your financial situation. Learn more about each of these 4 business types here.
3. Clearly define your project
Before you decide on a budget and draw up a business plan, you will need to clarify your project. Decide on which products or services you want to sell, your target demographic, your competitors, and what makes you unique from them. The more specific your answers, the better.
Next, assess your sales potential by asking yourself the following quantitative questions: how many potential customers are you likely to have? How many competitors are there? What approximate market share would your company have compared to your competition?
4. Decide on a budget
No matter how small your budget, with the right planning and assistance, your dream of owning a business can be realized.
First, determine your start-up costs, including everything you’ll need to run your business. Add the amount of working capital you’ll need to operate your business. Next, subtract the amount you have to invest (keeping in mind that your investment may need to extend over the first few years). The total will give you an idea of your approximate financing needs.
Making a wrong estimate in your budget can lead to big mistakes down the road. Seek the right help with establishing your budget. Desjardins offers the help of an account manager who can recommend the financing products that are right for your business.
5. Know the regulations
Your business may need to acquire government granted licenses and permits. This will not only help you avoid fines or being shut down, but major suppliers and customers will then be able to do business with you.
Learn more about the benefits of signing up for provincial and federal programs with Revenue Canada’s Business Registration On-line service.
6. Create a business plan
Every successful business requires a strategic plan. Your business plan will outline your short and long term goals, and the steps required to achieve them. It will be a useful document to refer to throughout the entire process.
Desjardins has created a free, interactive business planning tool to help organize and stimulate your ideas.
Your planning efforts will ensure your business’s successful start, boost your confidence and motivation. Starting your own business may not be easy, but the work you put into planning will make it that much more rewarding.