When starting a business it’s always better to know as much as you can beforehand. Over the 10 years I have worked with businesses I have seen some costly mistakes, affecting both the bottom line and the owner’s personal success, which could have been avoided.
Here is a list of 5 things that you should know before you start your business:
The government will find you
You can’t hide from the government. They will find out you are in business and expect you to follow applicable regulations. The rules for HST, source deductions, taxes, labour, and other laws are all published online and all levels of government are more then willing to help you in the process of setting up your business properly. Federal, Provincial, and most municipalities have a website that has vast amounts of information for reference. Each level of government also has a telephone number to contact and ask questions. Overall, do the work to know the rules. Claiming ignorance when the government comes looking for payments will not save you the penalties, interest, and fines imposed if you’re breaking a law.
Find an advisor who knows what they’re taking about
Anyone can claim to be a business advisor, they just need a business card and sales pitch. When starting a business you should not need to pay for a first meeting with an advisor. A real business advisor can be found by contacting your local CFDC or Business Centre, asking business professionals (your lawyer, accountant, or banker) for a referral, or contacting a local college or university for referrals. If someone is claiming to be able to make you millions of dollars with the contribution of some of your hard earned cash…run, fast! As to the role of an advisor, they’re available to guide and help you; they will not do the work for you. Advisors help you get connected to the people, mentors or other businesses that can help you in the process of building your business.
Pick one thing and do it well
You cannot be everything to everyone. It is physically impossible, so stop trying! When starting a business most people know what they want to do. They have decided that whatever skill, product, or service they offer is something that they can do well enough to generate an income. Most people go wrong when they stray too far from the original item or idea. It’s always better to say no to a project that you’re truly unsure of rather than to take on a project and fail horribly. The possible negative response from a unsatisfied customer will have a long-term affect on your business and isn’t worth the risk. Be honest with people, they will appreciate it more than a costly mistake.
Know who you’re in business with
Not every personal relationship can handle the stress of a business relationship. The best marriages can end over a business and friendships can be ruined. It’s always important to test the waters before you go into business with someone you wish to have a future with. Care must also be taken with the contacts that you make in business. You need to identify staff and suppliers that work well with you. Trust your gut, it is usually right. Never hire or work with another business out of desperation, it’s guaranteed to come back to haunt you.
Plan, Plan, Plan
The best thing you can do for your business? Write a business plan. A business plan will allow you to organize all of your ideas and gives you time to think the process though. A plan will encompass the rules are you need to follow, who you will work with, what you need in a potential staff or supplier, and what you are going to sell/make/do. The most vital piece of the plan is the financial planning. It is much easier to find out on paper that the numbers don’t work in advance than to be up to your ears in debt too far into the growth of your company. Your business advisor will be able to help you work though the process of building a plan.