Starting a new business can be a good thing. However, before you plunge yourself fully into the venture, you need to understand all the legal, economic and market hurdles you have to jump through in order for your startup to pick momentum and be profitable. Should you want your startup to succeed, you have to have a concrete business plan. Here are some of the basics you need to know before you venture into your startup business.
A business plan is the most basic thing in any startup. This is a written document that stipulates your business’ goals, objectives, strategies, financial projections and target market(s). It helps you establish timely and realistic targets. A business plan also helps one be able to measure success, get clarity on operational requirements and set the tone for the business operation.
If one needs external funding, the amount of funding they will be advanced is dependent on the business plan. In order for any financial institution to advance loans for your startup, you must show the ability of your business to generate income.
A business plan is not just a paper about your business heart upon which the success of your start-up rests. It helps you set the right direction for your business. Proper preparation is the path to success.
It is good to know the sources of funding your business start-up. Is it personal finance or will you seek external financing? Bearing this in mind, one is ready to secure the finances. If you’re starting your business in Canada, there are many government initiatives aimed at financing startups. You can also finance your startups through your close associates and family members. Whichever source of financing you decide to choose, you need to determine on how and when the money will be paid back.
When starting a business, one is faced with about three types of business structures to choose from. These include sole proprietorship, general partnership and incorporation. It’s wise to decide on a company structure which is most appropriate for you. If you want to go solo, sole proprietorship is most appropriate, but if you want to share the risks with another party then you can enter into a partnership with a colleague or any business oriented individual. For people who want their business to operate as a separate entity from them, then incorporation is vital.
Choose a Business Name
It’s important to pick the name by which your business will be referred. A good name can be a good form of marketing. Be sure that your business name is not in use elsewhere so as to avoid ambiguity. There are many ways to determine whether your name choice is already in use. You can use sites like business name research Canada to ascertain whether the title is already being used.
Choice of Business Location
The place where your business will be established is an important determinant of your business’s success rate. Location determines the market strength, requirements for licenses and permits, applicable taxes, business laws, level of competition and availability of materials to be used in your business.