7 tips for starting a business successfully
Read time: 5 minutes
Rule number one: It's not enough to simply have a good idea to start a business. Successful entrepreneurs must first look at the market, plan realistically, and mobilize their troops to achieve their objectives.
In practice, vision is only one part of the equation; it is just as important to know how to deal with concrete problems and to be able to market yourself in a competitive environment.
Here are just some of the basics:
1. Pinpoint the right market
Ideally, you should introduce your products or services to a young and fast-growing market. In more mature sectors, you will need a competitive advantage in order to distinguish yourself, i.e. product or service innovation, great customer service, or the right price point.
That means you should use a specialized research company to help you first gather as much information as you can to define your potential market, such as your competitors' strengths and weaknesses and the development time required to get your product off the ground. Keep in mind that during this time, you will not be making any sales.
2. Put the right people on your side
People on your management team should have skills that complement one another. The best leaders ensure that they recruit the top experts for each area of operations. You should not be afraid to hire people who have, in their respective fields, more expertise than you do.
You should also look at your outside resources as a part of your team. From a practical point of view, you will need technicians, sales people and managers, a lawyer, an accounting firm, as well as marketing or public relations help.
If you don't have the resources to set up a board of directors, you can also opt for a strategy committee and invite an expert to act as a sounding board for your business decisions. In advanced technology, there are more and more incubators that offer a wide range of assistance for increasing your chances of success.
In the end, the true test is the market. To reach customers quickly and efficiently, you should think about hiring marketing specialists at the outset. Marketing, while often neglected, is critical to the success of any business.
3. Think about the road ahead
Avoid fire-fighting and losing sight of your long-term objectives. Make a list of all the factors you have to consider in the immediate and medium term, especially if you foresee rapid growth. To help you manage that growth, you need to examine all available options, such as purchasing or leasing premises, furniture and equipment. You might also consider outsourcing different operations, such as human resources, rather than handling it internally.
Down the road, you will have to consider growth factors, such as energy and resources, raw materials, salaries, financing and technological needs. If you have carefully assessed your growth potential, it's acceptable to think big. For example, if you are positioned in a niche market, you may not be profitable unless you start exporting. To get a better idea of your exporting potential, check with national, provincial, and regional export support services such as those offered by Canadian trade commissions in other countries.
4. Get your financing in shape
Start-ups are often financed by the savings of their founders (as well as the savings of families and friends). In many cases, it may be necessary to look for outside capital such as Angels (private investors), venture capital funds, assistance funds, or social economy funding agencies.
Be sure you do your homework and know what investors expect from you. A businessperson who invests in companies once said, "If you knock on a door prematurely, you run the risk of it being closed to you later, particularly at the time when you are really ready to enter it."
Talk to BDC about your start-up financing needs. The bank offers customized solutions for businesses with high growth potential.
5. Use your time well
Most companies take time to get established, which means there will be periods when business is slower. The key is to make good use of that down time by networking, for example. Three networking strategies that may be appropriate, depending on your situation, are:
- Entering a business plan contest for young entrepreneurs;
- Participating in trade shows or exhibitions;
- Tapping into the business community by joining a business organization (Canadian Federation of Independent Business, Chamber of Commerce, etc.) or professional association.
6. Iron out the technicalities
There are many rules, some very technical, which are absolute requirements for your company's continued existence. For instance, you must decide what legal form your business will take, design an accounting system, and comply with regulations covering labour practices, occupational health and safety, and training.
In business and industry, you can start a company in your own name. A group can form a registered partnership or an incorporated company with a different set of rules, privileges and responsibilities. If you have several partners, you should draw up a shareholders' agreement to define a mutual code of conduct. Or you could decide to form a cooperative or not-for-profit organization.
Be sure to patent your ideas, or at least ensure that they are protected by a copyright, registered trademark, or trade secret. There is the possibility you might be infringing on the rights of another company in this regard. To find out, contact the Canadian Intellectual Property Office.
7. Deliver a plan that means business
Be sure that your business plan incorporates all of the above. Your plan must be concise, specific, and describe your business project accurately. Write it yourself, as it is your vision. And expect to do several rewrites before you achieve your final plan. Don't be afraid to get assistance if you need it. Show it to experts, such as accountants and lawyers or to other experienced entrepreneurs. Keep in mind that a business plan is more than an accounting document; it must sell your idea to a potential financial institution.