All businesses start as an idea.
Actually, you might say that all businesses spark from a desire. A desire to be rich, a desire for high status, a desire to help lots of people, or maybe a simple desire to escape the ordinary. A lot of people desire to own their own business but only a few take the action necessary to transform their desire into reality.
If you have an idea for a business, what’s stopping you from following through on it? Many people hesitate because they fear:
- That it will fail
- Their friends and family will criticize them
- Loss of financial security
How do you break past those mental barriers?
First of all, you need to have faith that your idea will eventually work out. Inevitably, you’ll suffer some rejection and temporary “failure” – but as long as you persevere, you’re bound to succeed. Of course, you’ll have to constantly modify and optimize your idea as you learn more and gain experience, just like adjusting the rudder on a ship as you move towards your destination. When you face discouragement, remain faithful and keep your mind focused on the end result.
Secondly, I believe that a deep sense of dissatisfaction is the only thing that will cause you to move forward. If you’re satisfied with your job, salary, benefits, and vacation time, you won’t be motivated to quit and try other alternatives. You have to feel discontent with your current circumstances before you’ll ever make a decision to change them. Once your level of discontent becomes strong enough, you’ll have no choice but to take action and make changes in your life.
Okay, so you’ve decided that 9 to 5, Monday through Friday, isn’t where you belong. What type of business are you going to open? It should be something that your knowledgeable and passionate about. If you know nothing about coffee or customer service, it’s probably not a good idea to start a coffee shop. Review your past and find a natural talent or skill that you’ve been developing for many years. Before you fall asleep, imagine yourself performing the service or selling the product. Does it make you excited?
Once you’ve got an idea that suits you and excites you, let’s look at how you can put it into action.
Step One: Plan
Start by presenting your business idea to friends and family (preferably the more supportive and encouraging ones). Try to locate a successful business owner that’s willing to chat with you (most are). Ask them to provide feedback and constructive criticism on your business idea. They’ll make you aware of opportunities or pitfalls that you weren’t aware of. Once you’ve discussed the idea and determined that it’s feasible, you can get to work on your business plan.
What are your target market segments? What risks are involved? How much money do you project to make in the first year? These are the types of questions you’ll be asked when filling out your business plan. You probably won’t have all the answers immediately, and that’s perfectly fine. Fill it out as best you can, then go do some research to fill in the blanks. Once you get moving, your brain will automatically start generating ideas about marketing strategies, pricing, and legal protection.
A free online business planner can be found here. Once you’ve signed up, the web site will take you through a step-by-step process asking you a series of questions that will probably make you think of things you never considered before.
An online business planner allows you to make changes to your plan easily
Another aspect of the planning stage is creating a good business name. Coming up with a suitable name for your business can be both a fun and challenging task. Take into consideration the following when brainstorming:
- Does it have a nice “ring” to it? Imagine yourself answering the phone and saying “Thank you for calling <insert name>”
- Is there an available .com Internet domain for it? Search Google to find companies that have a similar name. Make sure you can have a web presence.
- Are you infringing on any copyrights or trademarks?
- If someone heard you say the name, could they spell it? If you called your company “IonTech”, that could easily be misspelled as “EyeOnTech”.
You’ll need to research your competition to come up with a reasonable price for your product or service. To find your competition search Google (IE: search for <your town> + <product/service>) and check the Yellow Pages. Email or phone your competition to learn more about their products and services and find out what they charge. Determine what advantages you have over the competition. Maybe you have more experience and qualifications or maybe you can offer a lower price.
Step Two: Budget
Create a budget to track your expenses
With little capital, you’ll have to cut back on unnecessary expenses like vacations, big screen TVs, fancy dinners, exotic wines, etc. The idea here is the delay your gratification so that you can live comfortably in the future without debt weighing you down. Once your business beings to prosper, you will have the cash you need to purchase luxuries without going into debt. To monitor your expenses and get them under control, you should create a budget and do your best to follow it.
You can use Microsoft Excel or OpenOffice (free) to create a budget sheet. Create a section for every monthly expense you have such as rent/mortgage, groceries, telephone, business expenses, etc. Add all the sections together so that you have a good estimation of how much money you’ll be spending every month. Print off the budget sheet at the beginning of every month and post it somewhere you’ll always see it. Whenever you make a purchase, keep the receipt, and record it later into the section that expense falls under. You’ll find that for a few months you’ll be tweaking the budget, reducing one section and adding to others. Try not to feel guilty for going above your budget but do what you can to get things under control.
Do whatever you can to reduce your expenses during the start-up phase. Move to a smaller apartment, purchase a cheaper car that’s better on gas, buy your food in bulk if possible. Instead of dining out or going to the bar, stay home and brainstorm ways to improve your business.
Step Three: Register
The three main types of businesses are a sole proprietorship, partnership, and corporation. You can find an explanation for all three here.
If you have little capital and are going into business by yourself, start off as a sole proprietor. It’s less expensive and easier to setup and do your taxes. Once you’ve grown and become more successful, you can incorporate. Incorporating comes with advantages like limited liability and tax benefits.
In Canada, you can usually register your business at the same place you go to get your driver’s license. For example, in Alberta I registered my sole proprietorship at AMA. In BC, I registered at Service BC.
You may require other licenses depending on your location. Check with city hall and ask them what licenses are required to operate your business.
Here are some examples of additional licenses you may need if you open a business in Canada:
- Business Number – Federal G.S.T. Registration
- P.S.T. Registration- Depending on the province you are in
- Municipal license- Most cities require this
Step Four: Promote
Promoting a business can be difficult for a modest person. To put yourself at ease, remind yourself that you’ve got a product or service that will help other people. Your objective in getting the word out about your business is to help as many people as possible. This way, you feel like you’re doing a service by informing others of your business, rather than intruding on their privacy. You can also start off by offering your service or a sample of your product for free. This way, you start providing value to people right away and give them a chance to test your competency, reliability, and honesty. You may also receive referrals from your client if they are pleased with your service. Do what you can to provide value now and have faith that what goes around, comes around.
I’ve found two relatively inexpensive ways to promote and advertise a new small business:
1. Business Cards – You can create your own inexpensive business cards with a word processor like Microsoft Word (and probably OpenOffice as well). A tutorial on how to do this can be found here. Keep a stack of cards in your wallet or purse so that you can easily pass them on to potential clients. Make sure to inform them of any promotional offers you have at the time.
Use this website to design your own unique logo.
You can create your own business cards with Microsoft Word
2. Flyers & Pamphlets -You can create decent flyers with Microsoft Word as well.
Remember the K.I.S.S. principle (Keep It Simple, Stupid) when designing your flyer/pamphlet. Make the purpose of your business clear on the front. Many people try to promote their business name but sometimes the name isn’t very descriptive of the product or service they are offering. For example, the name of my business is “HMTech Systems” but it doesn’t really describe what I do. So instead, at the top of the pamphlet it says “On-Site Computer Repair” in large bold font. Below that I include my logo. The contact information including name, telephone number, email address, and website are also included on the front.
You’ll want to include a “Call to Action” (something that motivates people to contact you) on the front of the flyer. Include a coupon for a free consultation or 50% off the first call (or purchase). Make sure to put an expiry date on the coupon to make clear that it’s only a promotional offer. Try to include information here that would set you apart from the competition.
Printing flyers at home can end up costing you a lot in printer ink. You could visit a stores like Staples and have them make copies for you at a much lower cost.
After you’ve designed and printed the flyer, you need distribute it. Here are three inexpensive ways to do it:
- Direct Mail – You can send out two hundred flyers in the mail for about 20 dollars. Visit Canada Post for more information.
- Door-To-Door – Introduce yourself to the neighbours and let them know what you do. If they aren’t home, leave it in their mailbox or at their front door
- Have family and friends hand them out for you.
Conclusion
There are many stories of people who have started businesses with little to no capital. The only way you’ll find out if you’re business idea will work is to try it. Once you get moving you’ll see more doors opening to help you accomplish your goal.
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