Starting a new business can be an enticing undertaking. But before you dip yourself entirely into the venture, it is good to understand what it entails in order to have a successful start-up. If you need your startup to succeed, you need to have a concrete plan for the business from the word go. Below are a few basics you should know before you venture into your startup.
A business plan is a key factor in any start-up. This is a written document that will describe your business’ objectives, goals, strategies, financial plans and target market. It helps one set timely and realistic goals as well as how to secure external financing. 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 extend their credit to you for your start-up, you must demonstrate the ability of your business to make profit for an extended period of time.
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 stage for the business. Proper preparation is the path to success.
You need to understand the sources of funding your startup. Is it personal finance or are you going to seek outside financing? With this in mind, one is prepared to determine on how to secure the financing. If you’re starting your business in Canada, there are many government initiatives aimed at financing startups. You can also seek financing from friends or financial institutions. Whichever source of financing you decide to choose, you should determine on how you will repay the loan.
When starting a business, one is faced with about three types of business structures to choose from. These include sole proprietorship, incorporation and general partnership. Determine which business structure resonates well with 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 those who want their business to be a separate entity from them, then incorporation is necessary.
Choose a Business Name
It’s important to pick the name by which your business will be referred. The right name can be an effective marketing tool. To prevent ambiguity, your business shouldn’t 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.
Choosing the Location
Location of business is a big determinant of the business’s success. 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.