Starting a new company could be an enticing undertaking. 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. Below are a few basics you should know before you venture into your startup.
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 assists one set timely and realistic goals as well as get funding for the business. 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 document that but it’s the gist of your entire operation. It helps you set the stage for the business. With proper planning your business is set for success.
You need to understand the sources of funding your startup. Is it private finance or will you seek outside funding? Bearing this in mind, one is prepared to determine on how best to secure the funding. In Canada, there is lots of government programs geared towards funding business startups. You can also seek financing from friends or financial institutions. 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 company, one is faced with about three types of business structures to choose from. These include sole proprietorship, general partnership and incorporation. It is prudent to choose a business structure which suits you best. If you would like to go solo, sole proprietorship is most suitable, but if you want to share the risks with a different party then you’re able to enter into a partnership with someone. If you want your business to operate as a different entity from you, then you need to consider incorporation.
It is important to decide the name by which your business will be called. The right name can be an effective marketing tool. To avoid ambiguity, your business should not share a name with another business. There are several ways to determine whether choice of business name 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 availability of raw materials, market, licensing requirements, operation costs, availability of labor and applicable taxes.