Starting a small business is fairly simple. Having a successful business that meets your long term goals is a little more difficult. In this technological age, the tools to help you succeed are numerous and overwhelming. You are a Google search away from being bombarded with search results, many pages deep, that provide insight, tips, tricks, mistakes and guidance. The difficulty arises when you have to implement them, since every small business owner’s circumstances and business goals are unique. Keeping that in mind, below is a roadmap to help you focus on what is important, particularly in the early stages:
1. Create a business plan
There are numerous opinions on whether you need to set up a business plan and how much value this adds to your business. The answer is that even if you don’t need an official business plan (for financing etc.) it helps you to set goals for your business and give you a realistic understanding of the challenges, obstacles, competition and how you are going to differentiate your business. Additionally, a financial forecast will give you a sense of your cash flow requirements and profitability (among other important financial metrics).
Whether you should register as a sole proprietorship, partnership or incorporate can be a difficult one. Often if you are small and just starting out it makes sense to register rather than incorporate unless you want brand protection or limited liability, or if your customers would rather deal with an incorporated business. Tax deferral opportunities are also available with corporations, however, only if you plan to leave funds in the corporation. Also, ensure that you are aware of any potential regulatory requirements that might apply to your business.
Even though you don’t have to register for GST/HST/QST in Canada until you reach $30k in sales (for most businesses), it makes a lot of sense to register immediately if you have high start-up costs since you can claim back the sales taxes paid on expenses relating to the business.
Once you have registered your business, setting up a bank and credit card before you start processing business transactions significantly facilitates future accounting. Also, most accounting software (both online and desktop) allows for downloading of transactions which can be a great time saver.
5. Build a website
Once you have dealt with the administrative issues above, you can start focusing on making your business known to your many potential customers. Building a website is an important step as even though it will take some time to actually appear meaningfully in google results, it is the face of your business. You can send a link to your website to potential customers and link it in your social media profiles (see below) which increases the perception of your professionalism. Your website should focus on your target market, which should be outlined in your business plan, and include keywords for which you want to rank. Remember that the more specific you make your keywords the easier it is to rank. There are numerous tools, both free and paid, that can help you with your website as well as commerce add-ons that will allow you to sell products and services directly.
6. Set up social media profiles
There are numerous social media sites not all of which are suitable for all businesses. It is important to focus on the ones that make most sense for your business and ensure that you are able to provide updates regularly. Your social media posts shouldn’t only focus on your own business but should provide useful information about your niche to potential and current customers.
7. Set up a marketing plan
In addition to your website and social media, you should have a plan to market and advertise your business. You will have to do some research to see what is best suited to your business – options include google ad words, Facebook advertising (which can be quite targeted), attending trade shows and other networking events and free advertising like Craigslist and Kijiji.
There has been a proliferation of accounting software that you can use either on your desktop or in the cloud. Most offer free trials, allow for downloading of bank statements, sales tax reporting and payroll as well as essential accounting features like tracking your customer receivables and supplier payables, inventory and banking. The value that an accounting system provides is that it gives you a picture of how your business is doing in real time (assuming that everything has been entered) which allows you to focus on key financial metrics
In the early stages of your business, you as the business owner will be wearing many hats. However there are services that need to be outsourced depending on your own competencies and how much available time you have. Some of these include IT, legal and accounting.
Successful small business owners tend to be patient and persistent in the face of adversity. Adequate preparation, outlined in the steps above, can be the difference between success and failure.
Ronika Khanna provides accounting and tax services to small businesses, independent contractors, startups and the self employed. She has helped numerous small business owners set up their businesses.