First Steps to Starting a Business

VERONICA TUNZI, Staff Writer, with files from poss.ca

Although you may have a stand-out entrepreneurial idea that you're ready to launch, the beginning stages of business development can be turbulent. Whether you want to open up an organic fruit market, an online consulting company or a punk rock beauty salon, plan your takeoff carefully to ensure your new business soars.

Market Research
Market research is a key component of your business strategy and should be the first step in developing a new product or service. This is your opportunity to check out the competition and find out what's already out there. It can also help you to determine how your business could offer something better or different and to establish pricing. Part of the research might involve identifying service or product gaps that need to be filled. If you aren't tied to a specific type of business, you will have more flexibility to find a demand that matches a skill or interest you may possess.

Even though you might have your heart set on a particular business idea, you may find there isn't a current demand for what you'd like to do. This will make it harder to get funding (and to make a profit). Sometimes this means your dream business will have to wait or you will have to start out on a small scale. Or it may just require a little creativity to figure out how to make your product or service unique.

The federal government's Canada Business site thoroughly describes market research [1] and provides useful tools for conducting [2] it. Try to find innovative ways to go about this researching task. Often, something simple like sending friends out in the field to test out other services and report back to you can be an invaluable experience.

What's the (Business) Plan?
Once you've determined that there is a market, you will need to start shaping your idea into a concrete business plan to show funders. This means more than just having a catchy name and a fancy logo. Funders will expect your plan to answer many questions including:

• What is the demand for your product or service?
• What are the start-up costs?
• How many staff members will you need, if any?
• What are the overhead/production costs?
• How long will it take to start recouping your initial investment?
• What are your projected profits?
• What happens if the market changes?
• Do you have any plans to expand your business?

The Canada Business [3] site and the Business Development Bank of Canada [4] explain how to create business plans and offer online templates. Additionally, the Canadian Bankers Association [5] (CBA) and the major Canadian banks all have useful tools to help you decide what type of business to start, where to get financing and how to put together a business plan.

Making a strong business plan [6] and keeping tight tabs on where money is coming and going is essential to any successful business, whether it involves financial planning, furniture making or piano instruction. Think about taking a course in business management or accounting to develop or bolster these crucial skills. If you don't have the desire to manage the business yourself, find a reputable accountant or advisor to ensure your financial affairs are in good order. Being aware of your money is just good business sense and not something that is in conflict with creativity.

Start Small
Before you blow your savings on the best glass beads, a walk-in freezer or a storefront on a swanky street, remember that many successful business owners started out with just a few basic materials and used their basements, kitchens or garages as their headquarters. If you have a clear mental picture of what you want to achieve, you may think it's fine to skip a few steps and fast track your business expansion. However, a wise entrepreneur knows that success takes time. Don't overextend yourself financially or by promising larger orders or longer hours than you can keep.

Spread the Word
As an entrepreneur, you need to be ready to sell yourself and your new enterprise. Mention your business to your friend's relatives, that guy you met on the bus, and pretty much anyone you lay your eyes on.

As you're talking up your business, don't just answer people's questions -- ask a bunch too! Networking is a great opportunity to sell your work while gathering tips from potential customers and experts. While you're learning how to advertise your business, ask people doing similar work what methods they use. Find out about mentoring opportunities and look into associations, such as Business Improvement Associations [7] (BIAs), or sector councils [8] in your field. Have a question about taxes? Ask your accountant cousin out for lunch. Not sure how to create online buzz? Ask your friend's tech-savvy teenager for a web tutorial.

Once your business is established, developing a community network can also help boost your reputation. Forge relationships with other establishments on the street or with businesses related to your industry. For example, if you've just started a carpentry business and are meeting other tradespeople on sites (plumbers, electricians, etc.), get chummy with them. Pass out your business cards and keep in touch. If they like your work, there's a good chance they'll refer you in the future.

Create a Website
Because we live in the information age, people expect to have access to your business at their fingertips (literally). With most people now seeking out products and services via their laptops, BlackBerrys and iPhones, it's crucial that your new business have a website so that potential customers can find you. If you're at the beginning stages of your business planning and are overwhelmed by all of the tasks on your plate, creating a simple site that contains a brief description of your product or service, your location and your contact information is sufficient to start.

You can either pay a professional to create a website for you or set up one on your own. Basic website creation is actually not that hard; it just takes a little patience. Creating your own website will entail purchasing a domain name [9] (such as [name of your business].ca), finding a website hosting service [10], and then using a publishing platform to create your pages. There are many website publishing platforms available, such as WordPress [11], Blogger [12], TypePad [13] and Movable Type [14], some of which incorporate hosting and publishing services all in one.

If you're still daunted by the idea of creating your own website, you can always sign up for a course in website development. The Harbourfront Centre [15] and the Toronto District School Board [16] have classes on website design. Additionally, the University of Toronto's School of Continuing Studies offers a Strategies for Web Presence [17] course, which could be handy once you've got your website up and running.

How Would You Like to Pay for That? Funding Options for Entrepreneurs
It's very expensive to start up a business (especially one that runs out of a storefront, but even online businesses require start-up money). Most people don't have thousands of dollars lying around, so external financial assistance is usually required. This can take the form of a bank loan, money from family and friends, outside silent partners [18] or even angel investors [19].

The Industry Canada website [20] is a good place to start researching funding sources. The Canada Business site also has a great financing resource list [21] for specific demographic groups. Private sector financing [22] is another option to investigate.

The following is a brief list of sources offering information on entrepreneurial funding in Toronto:

• Canada Business: Government Grants, Loans and Financing [23]
• Industry Canada [20]
• Canadian Youth Business Foundation [24]
• Young Entrepreneurs Association [25]
• Aboriginal Business Canada [26]