how start business without investment and how start new business without money in india
Dr.JesperHunt,United States,Researcher
Published Date:16-07-2017
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Starting a Business 101
(Canadian Edition)
A Blue Beetle Books PublicationIntroduction
When you start a company it is important to set it up correctly from
the outset. The best place to start the process of registering your
business, and to discover all the other things you need to do to
comply with the many regulations that govern small business, is the
Canada Business Network www.canadabusiness.ca/eng).
In this book we are not going to take you through all the steps
required to legally set up your business. This information is readily,
and exhaustively, available through several federal and provincial
government websites, which guide you step-by-step through the
entire process.
Suffice it to say that the list of what you will need to do is long, and will include: deciding whether
your business will be a sole proprietorship, partnership or corporation; registering the name of your
company; registering for GST/PST/HST (depending on which province or territory your business is in);
registering for WCB/Worksafe; getting you local business licence; finding out what permits or licences
you will need for your specific business, and more.
It’s a lot of paperwork, but you only have to do it once and your accountant and lawyer will help you
if you get stuck. If you have enough start-up capital to pay professionals to do this for you, so much
the better.
P
So, what are we going to talk about? Well, first off before you get carried away with the dream of being
your own boss, and becoming the next Bill Gates, you should take stock and think about what life will
be like as an entrepreneur. It’s easy to get excited about the potential for the product, or service you
are planning to sell, or the fact that at last you can truly turn your hobby, or natural skill into a way to
earn a living. The reality however, is that whatever business you are going to start, your primary role will
be that of salesperson. That is the stark reality, unless of course you have sufficient start-up capital to
hire a sales team from day one. Even then, you will not be able to hide away in the back room avoiding
contact with potential customers, suppliers, bankers and the multitude of other people who you will
need to “sell” your business concept to.
I once knew a government worker, whose hobby was making wooden toys. He made the best wooden
toys I had ever seen and whenever he showed them to people they wanted to buy them for their
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Futures Development Corporationchildren, or grandchildren. He decided to leave his secure government position to pursue his dream
of making a living out of his hobby. Unfortunately he went out of business after a little over a year. The
reason? He loved making wooden toys - his passion was to make the best wooden toys anyone could
possibly make. Confused? Let me explain - he loved making wooden toys, he hated selling them, he
hated running a business, he hated being disturbed by customers when they visited his workshop - he
just wanted to be left alone to make his toys.
In Starting a Business 101, we want to provide you with information and advice that is less readily
available in start-up business books. First, we want to encourage you to look deep within yourself
to see if starting a business really suits you - after all we wouldn’t want you to leave a secure job,
like our wooden toy maker, and fail, wishing someone had only warned you what entrepreneurship
was really like. Basically, this volume is all about making you think about what’s important when
starting a business.
After you’ve taken the To Be, or Not to Be an Entrepreneur quiz, we look at how to come up with,
and judge, your business concept. Then to help you a little further with that all important task, we take
a look at which business ideas are trendy at the moment. Even if none of them are within the realm of
your expertise, or they simply don’t appeal to you, I urge you to take a good look at them because they
tell you what’s working out there in the world of business. What can you learn from these trends, and
what do they tell you about your particular business concept? Digging a little deeper, 12 Industries
to Consider is well worth reading as it offers a great starting point for your investigation into what
business might be best for you.
Whether to start your own business, or buy one that already exists (or a franchise maybe) is a serious
question that should be considered early on in deciding your entrepreneurial future. Reading Buy or
Start - The Pros and Cons, may change your mind about starting from scratch, or it might make you
even more determined to make your business idea a reality.
The perennial problem with becoming an entrepreneur is the cost of starting, or buying a business.
Do You Have Enough Money? gives you a quick overview of the sort of expenses you will incur, then
looks at high and low cost start-ups, before talking about where the money might come from.
The Power of Knowledge focuses on something few, if any, books on starting up a business cover. It
is surprising how many people start-up a business in the dark, with no real education on the industry,
or market they are entering. Once, on a vacation in Spain, I was encouraged to enter a bull-ring to
“play-fight” a young bull. I had no idea what I was doing, had no training and it did not go well. I made
a lot of rookie mistakes, such as holding the cape in front of me rather than to one side, and worst of
all I took my eyes off the bull. As soon as I did, it charged, I ran, I fell, and I it gored me - not badly (the
bull’s small and conveniently blunt horn hit my hip bone), but enough for there to be a fair amount of
blood and causing me to walk with a limp for a few months. Learn from my mistake and don’t enter the
business ring without knowing fully what you are getting into - do your homework and hopefully there
won’t be too many gory surprises.
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Futures Development CorporationWhenever anyone starts a business the odds are against them, but there a number of things you can
do to stack the odds in your favour. That’s where 7 Ways To Check Whether Your Business Will
Fly can help. This chapter will help you assess whether there really is a market out there for what you
plan to sell.
Whatever business you start, you will need to ensure that it has something different about it, something
special. The Importance of Having a USP deals with unique selling propositions, and provides
examples of how some businesses set themselves apart from the crowd. It goes on to provide some
strategies for discovering and developing your own USP.
What’s in a name? A great deal, as Choosing a Great Business Name explains; for a start,
these days you have to have a name that is available as a URL, otherwise you may be sending
yourself into Internet oblivion. It can’t be too clever, otherwise people won’t understand it, on the
other hand keeping with a family name can also potentially send the wrong message as with an
undertaker in Illinois called Slaughter and Son Funeral Directors. Sounds like something straight
out of the O.K. Corral
Branding is becoming increasingly important in this day and age, where consumers are Internet
savvy, and more knowledgeable about their choices and our products and services then ever before.
Our organizational culture is under scrutiny, so our branding had better be spot on. In It’s All About
Brand Image we discuss all these issues and look at what the current trend is in terms of branding.
An integral part of branding is the corporate website so we provide ten reasons why it is vital to have a
website. If you count carefully, there’s a whole lot more than ten, because we cheat and include several
points under each number
We finish off by providing the quiz results for To Be, or Not to Be an Entrepreneur and give brief
comments on all 41 questions.
I hope that once you have read this book, taken the test, and carried out all the suggested research,
you’ll have a good idea as to whether starting a business is right for you, and if that germ of a business
idea you have might stand a chance of success.
Whatever you decide, I wish you luck. It’s hard work starting a business, and even harder work running
one. Success will depend on how you define it, and I can assure you the goal posts will change along
the way, but for true entrepreneurs, there’s no other way of life.
Mike Wicks
Publisher, Blue Beetle Books Inc.
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Futures Development CorporationTo Be, Or Not To Be An Entrepreneur
This exercise may look like a bit of fun, but if you To get the best out of this pop quiz, you need to take
take it seriously it will provide you with an insight a little time over it and consider each question and
into whether starting your own business is the right the multiple choice answers carefully. Remember,
route for you to take. Of course, it’s only meant as a you’re the only one that will see the answers, so be
guide, just one more thing to consider before taking brutally honest with yourself. It’s an important, often
the plunge into self employment. life-changing decision to become self-employed - to
start a business and burn some bridges. You should
The test was designed to see how your social and be very sure that it’s the right way for you to proceed
personal traits compare with those of a typical with your career, and your life.
entrepreneur.
You might notice that some of the questions are
Running one’s own business is definitely not for very similar, but asked in a different way. Don’t over
everyone; it can be a highly stressful way to earn a analyze the quiz, just answer each question as it is
living. On the one side you have total control over asked. There is reason in our madness - honest
your life; there’s no boss telling you what to do
and when to do it. You are master, or mistress of You might want to print off these few pages of your
your own destiny. But, there is a flip side; you will eBook so that you can check off your answers.
work longer hours and there’s no guarantee that, Taking the quiz is easy, just check the box on the
magically, money will appear in your bank account right-hand side that best represents your answer
bi-weekly, or monthly. That security of income to each question, then add up the number of
suddenly disappears, as dozens of other things checkmarks in each column, multiply it by the
require paying before you can take your wage. factor at the end of the column, then add all the
columns together to get a final score.
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Futures Development CorporationYour Business Idea
Coming up with a business concept is fraught with 1. How knowledgeable are you about the
challenges. In this chapter we’ll look at some basic business you are considering opening? What
guidelines, before providing an overview of global do you know about the products, services, and
business trends. market? Look at businesses that you know very
well, and not just from a technical perspective,
Here are our top ten things to consider when but from a market standpoint.
deciding on what business you should start.
2. Make sur e you have all the necessary
skills to run the business (e.g. not just those
required to manufacture the product, or deliver
the service). Remember no matter what the
business is, you will have to do some selling.
3. How much money do you have to invest?
Businesses such as graphic design and
consulting require far less start-up capital, for
instance, than opening a retail establishment.
Buying a franchise can be a good idea, but do
you have enough capital for both the purchase
and the initial running costs?
4. Think about what you enjoy doing, and what
you are passionate about. You are more likely
to stay the course and be successful, if you
enjoy what you do. However, be careful that
your passion for your hobby doesn’t blind you
to the business potential it has. You may be an
excellent writer of poetry, but making a living
from it is all but impossible.
5. Decide what type of selling might be
involved. A retail store for instance allows you
to be a little like a spider in its web, waiting for
people to come along before interacting with
them. Being a consultant on the other hand,
means cold calling and attending business
mixers. Remember selling is ALWAYS a major
part of any business.
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Futures Development Corporation6. Howcompetitiveisthefieldyouwantto or DVD’s. If, however, you can develop apps (or
enter? You may have worked for many years perhaps be a reseller) for Smart phones then
as a lube technician and feel that you have you’d be in a growing business. In 2010 the
what it takes to launch your own business, industry was worth around 1.7 billion, within
but how many other oil and lube businesses the next three years it is predicted to grow to
are there in your town, and is there enough 3.8 billion. Now, that’s a business to get into.
business for another? Analyze your market and Later in the book, we’ll be taking a look at
see how saturated it is. Remember, you will be current business trends in more detail.
trying to take market share away from existing
businesses, unless your business is the only 9. Be wary of going into any business wher e
one of its kind in the locale. consumers make their buying decisions
based entirely, or primarily on price alone. As
7. Look for wher e there is a gap in the market someone new in the market, your competition
-wherethereisunfulfilleddemand. If you will have deeper pockets than you and you
are looking at the retail market, is there a could watch your profit go down the drain as
product that people currently have to travel a they undercut your prices. This is where service
long way to purchase? Consider the example businesses have the edge, as people don’t
of social media consultants; as the business choose who they work with solely on price.
world started to see the potential for marketing
their products via Facebook, Twitter and other 10. Come up with several business concepts
sites, there was no one around to tell them how and test them out. The best thing you can
to go about it. The gap was quickly filled by do to prevent yourself starting a business that
entrepreneurs who saw a need that was at that simply doesn’t work for you, is to work in it for
time unanswered. a while. If, for example, you are considering
opening a coffee shop, go and work in one
8. Look at market tr ends and see what is while you are writing your business plan.
becoming increasingly popular, and what Experience the business first-hand and you will
may be coming to the end of its popularity. not only learn a great deal, but you’ll see if you
For instance, now would not be the time to enjoy the environment.
open a video rental store, or one selling CD’s
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Futures Development CorporationCurrent Trendy Business Ideas
Everywhere you look pundits are predicting what
12 Industries or Markets
type of businesses entrepreneurs should move into;
to Consider
here we take a look at the top five industries the
There are many types of businesses that offer a
Globe and Mail, in early 2012, suggested were the
better than average chance of success in today’s
best for start-ups.
business environment, and if you go online you
will find dozens of lists and all will be different.
The list below is based both on solid research,
1. Elder Car e - we all know the population is
and many decades of helping people start-up new
aging, so it’s no surprise that this features
companies. Treat it as a starting point for your
prominently. We are living longer, healthier,
investigation of what might be the right business for
and more independently - but the longer we
you to start.
stay in our own homes the more help we’ll
need.
If you find any of these markets interesting,
investigate them further on the Internet; within
2. Health and W ellness - everything from
each there are dozens, if not hundreds, of business
healthy food, to fitness gyms and regimes
opportunities. Here we just give a short overview of
are covered in this sector, along with health
why they might be worth checking out.
coaching and online health programs and
apps.
1. Consumer Staples - at the end of the day
we all have to eat, and we all use consumable
3. Warehousing - as companies look for ways
items that we need to replace regularly. So,
to cut budgets, tying up money in expensive
manufacturing such items, or buying and selling
real estate looks less attractive when they
them will always be a solid business.
could outsource their storage needs. This is
especially true of companies where storage
2. Smart Phone Apps - as mentioned earlier
needs are seasonal.
this is big business with some 500,000 Apple
approved apps to date. If you are thinking
4. Shipping/Logistics - as with warehousing,
that making a business out of developing
smaller companies are increasingly
apps might be rather ambitious, check out the
looking to outsource this work, providing
following Ted Talk given by an app developer
opportunities to entrepreneurs.
called Thomas Suarez, who just happens to be
a 6th Grader (http://youtu.be/ehDAP1OQ9Zw)
5. Outsourcing/Staffing- after downsizing
staff during the tough economic times, many
3. Elder Care - First some facts: 5 million baby
businesses are recognizing that they can
boomers turn sixty years of age every year,
manage with temporary, or part-time staff
that’s 416,666 per month, 96,153 per week,
instead of re-hiring.
13,698 per day, 9.5 per minute. A boomer turns
sixty every 6.3 seconds and every 7 seconds a
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Futures Development Corporationboomer turns 50. This generation is living longer
and healthier, and remaining independent well
into their dotage. As they remain in their homes
longer, they will need supplementary care. This
is a market that is going to grow significantly in
the coming years.
4. Health and Fitness - the general public is
becoming increasingly interested in the state of
their bodies, whether it is losing weight, getting
fitter, toning those abs, or taking supplements.
This marketplace is going to be hot for the
foreseeable future.
5. Y oga - although this could easily fit under
health and fitness we are highlighting it
after Inc. magazine reported that Yoga
Journal carried out a study which found that
Americans spent 5.7 billion on yoga products,
equipment, and clothing in 2008 (87 per cent
more than they did in 2004). Inc. went onto
report that nearly 14 million Americans say
a doctor or therapist has recommended
yoga to them.
6. Home Improvement - The recent economic
climate has led to many people putting off
moving house, or renovating. This pent up
demand for repair work, and upgrading,
is apparently beginning to be released.
Green improvements such as solar power
are particularly hot at the moment (no pun
intended). This has always been a good market
for self-employment, but now just might be a
particularly good time to investigate this as a
start-up business opportunity.
7. Green Construction - the move toward
building green is accelerating. Consumers are
increasingly looking to buy “green” houses, or
do “green” renovations. Industry pundits report
that “green” residential home construction will
grow by some 500 per cent by 2016.
8. Niche Consulting - consulting has always
been a favourite start-up option as the cost
of entry is extremely low. In today’s economy
many companies that laid off staff are now
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Futures Development Corporationseeing shortages in certain skill sectors,
which they need to fill by outsourcing. What is
interesting is that increasingly, corporations and
government are moving from larger agencies to
smaller firms that specialize in a niche market.
Hot niches right now include anything that
saves companies money, sustainable business
practices (including greening) and social media.
9. Accounting Services - an increase in outsourcing
in general, is benefiting businesses in this market.
Bookkeeping is an especially low cost, easy entry,
start up business with great potential. As new
businesses are starting up all the time, there is
a never-ending supply of potential new clients,
and as we slowly come out of the recent tough
economic times, there will be a matching need for
accounting services in general.
10. Fast-Casual Dining - According to MainStreet
Restaurant Licensing Ltd., which is a full service
Canadian private equity company servicing the
food-restaurant-hospitality industry, “Full-service
restaurants are passé. Hybrid, fast-casual
restaurants offering high quality and delicious
food à la carte at pocket-friendly prices are
the new sweet spot of the growing economy.
11. Online Shopping - Although dominated by
The master concept of fast casual restaurants
retail giants such as Amazon, Apple, Best
is based on two most important parameters –
Buy/Future Shop there is plenty of room for
great quality fresh food and instant service. The
start-ups to enter this market. According
fast casual restaurant segments have been
to Statistics Canada, a little over half of all
growing at a tremendous rate, thanks to the
Canadian web surfers purchased something
multi-fare menus that offer ‘more pocket-friendly
online in 2010, buying on average, 1,300
choices’ to the customers and multifaceted
worth of product with a total market value of
growth opportunities available in the highly
15.3 billion. Interestingly 8 out of 10 bought
lucrative food business.” One sector of this
from Canadian sites.
new market that may be of particular interest
to entrepreneurs looking for a low-cost way to
12. Repair Services - As the general population
enter the market is Food Trucks. A survey carried
becomes more environmentally friendly, the
out by the National Restaurant Association (NRA)
desire to repair, rather than replace, a wide
found that 30 per cent of chefs consider mobile
range of items offers good opportunities for
food trucks to be one of the hottest operational
entrepreneurs. We are hanging on to our
trends. For more information on this trend visit:
cars longer and getting them fixed, we are
www.mainstreetrestaurants.ca/hottest-segment.
repairing our shoes and electronic goods, and
php. If you are considering entering the food
purchasing spare parts for stoves, dishwashers
industry we advise you to download the NRA’s
and other appliances. Mister, or Ms Fixit’s are
survey: www.restaurant.org/pdfs/research/
becoming sought after commodities.
whats_hot_2011.pdf.
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Futures Development CorporationBuy or Start - the Pros and Cons
One big question entrepreneurs have to ask If you are looking to start a home-based business
themselves is, should I buy a business, or should in the consulting field for instance, then the
I start one from scratch? The answer to that is a chances are that you can do this yourself with little
resounding, “It all depends.” to no outside help. If you want to offer a mobile
mechanic service, again it may be fairly easy to
There are pros and cons to both approaches and set this up yourself. But, if you want to start selling
a lot depends on what sort of business you are pizzas then you might want to at least investigate
looking to start, what your skill level is relating the the potential of buying a franchise as this could
business you are planning, and how much money save you a lot of effort and give you a recognizable
you have to invest. brand name from day one.
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Futures Development CorporationLet’s do a quick analysis of some of the pros and cons of buying a business, or a franchise.
Pros Cons
You are buying an established brand name, which Buying a business can be costly, and is often more
means that you will have credibility from day one, expensive at the outset than starting your own.
and people will have an expectation of quality and Remember however, that much of what you purchase
confidence in you that might take months, if not years to when you buy a business will still have to be bought
build on your own. over time for your own start up.
As long as you do your due diligence, the business You have to invest money in getting each prospective
concept will already have proven itself. It works, is business opportunity thoroughly checked out to the nth
known to generate revenues and more importantly a degree, by your accountant and lawyer.
reasonable profit.
It is likely that you will purchase all the equipment It is difficult to gauge the life left in much of the
you require to run the business, along with a starting equipment and some of it may be at the end of its life.
inventory. In the case of a franchise, you may get The inventory you purchase may not all be good; there
preferential pricing on the equipment you need. may be a high percentage of slow selling items.
If it’s a business, they will have all their operational It’s great to have systems, but they may not suit the
systems up and running. This will allow you to hit the way you work, or fit the way you see the future of the
ground running. A franchise will have proven systems in business.
place.
The existing business owner may agree to a transition
period and help you to learn the systems etc.
You already have clients, or customers, and the goodwill How much of the goodwill was based on the personality
that has been built over the years. You will see revenue of the owner? If customers frequented the business
immediately. because of him, or her then will they keep using the
business when you take over? This is why a handover,
or transition period is important.
If you need to borrow money, or get a line of credit, The bank will still want to check your personal
you have a business history on which the bank can creditworthiness.
base a decision. You may even be able to take over the
company’s line of credit, or loans. Just as important is
that you have, or should have immediate cash flow.
You maybe able to take over existing staff, who possess You get the good with the bad as far as employees
the skills required to deliver the products and/or services are concerned. It is wise to interview existing staff prior
you provide, know the equipment and systems in use - to purchasing the business, or between buying the
and have a relationship with your customers. business and taking over the operation.
You can start work on growing the business from a solid
base from day one. Most of the hard work establishing
the company has been done for you.
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Futures Development CorporationOverall, most experts would suggest that you have a better chance of success if you purchase an existing
business. But, let’s look at the pros and cons of starting your own business so that you can make your own
decision.
Pros Cons
Start-up costs are under your control and are often less Your business may be under-capitalized as you try
than when purchasing an existing business. to spend the least amount of money to get it off the
ground. It can also take a lot longer to establish yourself,
which can lead to additional financing pressures.
You start with a blank slate. The concept, the products You have no brand, no credibility, no share of the market
and services, the branding can be tailor-made to your - you are unknown. You have to create the vision, the
business philosophy and organizational culture. products and services and they may not be proven.
There is considerable room for getting it wrong.
You can find a new market niche that no one else is These are few and far between. Often, there is no one
taking advantage of. servicing a niche market because it’s not big enough, or
it’s been tried and the business, or businesses failed.
Success or failure is all down to your own efforts and The failure rate for start-ups is higher than for existing
determination. businesses. The one-year rate is around 85%, but drops
to 50% at five-years which would indicate that it’s
tough to establish a new business. These stats are for
companies with paid employees, so don’t include one-
person businesses. Business experts, such as Michael
Gerber, the author of the E-Myth, are less optimistic
saying that the survival rate is as low as 20%.
See: The State of Entr epreneurship in Canada: Industry Canada
(www.ic.gc.ca/eic/site/sbrp-rppe.nsf/vwapj/SEC-EEC_eng.pdf/file/SEC-EEC_eng.pdf )
Think long and hard about your options when it comes to deciding between buying, or starting, a business.
Consider all the pros and cons and above all else get advice from business people you know, business
account managers at banks, accountants, lawyers, experts in your chosen industry and market, and
anyone else that you can think of. Then, go online and read as much as you can about the business you are
thinking of starting or buying. It is vital that you are thorough in your due diligence.
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Futures Development CorporationDo You Have Enough Money?
The majority of entrepreneurs underestimate
the amount of money they need to start a
business. Here is a list of some of the things you
should consider:
1. All the paper, and professional help - licenses,
permits, incorporation, legal fees, accountancy
fees, partnership agreements, and more.
2. Equipment (manufacturing machines,
computers, printers, cash registers, alarms,
chairs, desks, phones, the list goes on)
3. Inventory: goods, or raw materials
4. Insurance - liability, errors and omissions, life,
building etc.
5. Rent, and any leasehold improvements.
6. Hydro, gas, oil, water, telephone, Internet etc.
7. Staff payroll, taxes, benefits, WCB/Worksafe
8. Delivery, warehousing, courier, postage etc.
9. Marketing costs: business cards, stationery,
High Cost - Low Cost Start Ups
advertising, website, mailing lists, online, etc.
More expensive start-ups require:
10. Association membership
11. Travel, accommodation, entertainment,
• Inventory
conferences
• Commercial premises, which may or may
In many cases, this list will only represent the not require leasehold improvements
starting point of all the money you will need to find
• Staff
to fund your start-up. And, all that is before you start
• Promotional budget
to pay yourself. Remember, you are unlikely to start
Less expensive start-ups are usually:
your business one day and be able to pay all your
expenses from profit the next. Cash-flow is a critical
• Home-based
component of survival, so it is vital that you have
sufficient capital to bridge the gap between the day
• Service focused
you start your business, and the time your business
• Owner operated
can not only sustain itself, but make a profit.
• Use contract staff when required
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Futures Development CorporationSo, Where Do You Get the Money From?
A lot depends on the size and type of your Whatever the circumstances, you will require a
business. Home-based businesses need a relatively partnership agreement drawn up by a lawyer. Talk
small amount of money, while larger businesses in to your lawyer and accountant, but it is usually
manufacturing, or retail require larger capital to get advisable to incorporate your business if you are
off the ground. going to have a partner, or partners. If you have
issues later, it will make things a lot easier.
Here are a few places to go in search of
start-up funding. The other thing to remember is that it is all well
and good getting a bunch of cash when you need
Partners it most, at the outset of your business, but what
Partners can be a blessing and a curse. On the about sharing the profits down the road? The
upside many hands make light work, and if you amount of money you thought was a godsend
can find someone you can trust that when you were struggling to get off the ground,
has a whole bunch of skills, may not seem much when compared to the
which are complementary to potentially large sums of money going out of the
your own, then this may be business to a silent partner in dividend payments.
a good way to share the
financial burden. But, if Grants - Don’t buy a grant book
you are only bringing in The biggest message here is that there are almost
a partner for his, or her, no grants available to help you start a for-profit
money then you should business. There are plenty of grant books available
take into consideration online that promise millions of dollars in available
that you are giving that funding - they are not worth buying, for two reasons
person a significant say in 1) all the information is available through government
how your business operates sources for free, and 2) there is very little free money
(how much will depend on the Now, I have to qualify that last statement slightly by
level of financial support, and the saying there are some government grants but they
agreement you reach). are for very specific types of businesses, doing very
special and unique things. If you still want to check
out whether there could possibly be a grant for
your business, the best place to start looking is the
Canada Business Network
www.canadabusiness.ca/eng/guide/1136.
Loans
Small business start-ups find it difficult to get
loans from traditional sources. Don’t even
consider approaching a bank unless you have an
excellent personal credit rating and a first-class,
professionally written, business plan. Even then,
you will often find it difficult if you haven’t built up
an excellent relationship with the bank.
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Futures Development CorporationCommunity Futures Development Corporations
run a small business loan program which is well
worth checking out. Here is a typical overview of
the program, in this case from Western Canada
(just Google CFDC plus your town and you will be
able to access information about the loan program
in your part of the country).
Throughout Western Canada the locally run,
non-profit, Community Futures organizations
have achieved outstanding success by
integrating the social and economic needs of
their communities. A wide range of services
and financing opportunities are available to
small businesses and entrepreneurs at the local
Community Futures (CF) offices.
In general, businesses seeking financing must:
• be located in a rural area of one of the
four Western provinces (Manitoba,
Saskatchewan, Alberta or British Columbia)
• be operating, or about to operate, in a
designated Community Futures area
• contribute to local economic growth
• be seeking financing of up to 150,000
Loans on commercial terms, equity financing
One such program aimed at women is offered
and loan guarantees are available through the
by the Women’s Enterprise Centre in BC. It
Community Futures offices. Applications are
offers loans up to 150,000 for women in B.C.
assessed by the Community Future’s local
and has lower fees than many other lenders. The
volunteer Board of Directors. Training and
centre loans money for leaseholds, equipment,
assistance preparing business plans are also
operating capital and more. Their loans come
available at the Community Futures offices.
with free, ongoing business advice delivered by
professionals. To find out more you can participate
As each Community Futures community is
in one of their weekly phone-in Business Loans
different, specific financing activities undertaken
Information Sessions.
by each individual Community Futures office
varies from community to community. Search
For First Nations entrepreneurs in Atlantic Canada
our Business Service Network database to
there is the Aboriginal Business Development
locate the network offices nearest you or visit
Fund (Ulnooweg Loan) managed by the Atlantic
the Community Futures national website.
Canada Opportunities Agency. This Government
of Canada fund is offered in New Brunswick, Nova
There are several loans programs aimed at women
Scotia, Prince Edward Island, Newfoundland and
and first nations’ entrepreneurs. Often these are
Labrador only. For more information click:
delivered provincially and we encourage you to
www.canadabusiness.ca/eng/summary/1228.
seek them out.
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Futures Development CorporationOther regions and provinces offer similar programs, to eligible individuals to help them create jobs for
so search the Internet and you will find a wide themselves by starting a business. While it doesn’t
variety of loan programs offered by agencies help with start up costs, it does offer financial
across Canada. assistance through participants being able to
receive E.I. benefits while on the program.
Bank of Mom and Dad
It’s surprising how many young entrepreneurs get Government programs change all the time, and
their first business loans from friends and family, finding information on the self employment program
and more often than not it’s mom and dad that at national level is quite difficult. However, at
come to the rescue. This can be by way of a formal the local level try your local Community Futures
loan with shares, or part ownership, or informal on Development Corporation as they might be
the understanding that they will get their money delivering it, if not they will usually know where to
back (with or without interest) once the business send you.
is successful. This type of financial help is baed
on blind faith, and requires little to none of the due
Conclusion
diligence a bank, or an outside investor will require.
I hope that this dose of reality has not disillusioned
you, because no matter how hard starting a
Creative financing
business is, it is without doubt possible. Take a look
Over the years I have helped thousands of small
at this list of under-capitalized start-ups that made
businesses start-up and their creativity surrounding
it big. The following is based on brand values as at
early financing, when the banks wouldn’t touch
2011, taken from the Brandz Top 100 Most Valuable
them, never ceases to amaze me.
Global Brands study (click here to see the top 100
www.millwardbrown.com/libraries/optimor_brandz_
Think about what you can sell that could raise
files/2011_brandz_top100_chart.sflb.ashx):
that highly important start-up capital. I have
seen people sell their boats, Harley-Davidson
• Starbucks was started by three guys in 1971
motorcycles, cigarette card and stamp collections,
who invested 1,350 each. 2011 brand value:
even houses. It is a good indication of an
119 billion.
entrepreneur’s commitment to his or her idea, when
• UPS - was started by a couple of teenagers
you see them sell something they treasure. Bank
who possessed one bicycle between them and
account managers are particularly impressed when
100, 2011 brand value: 35.7 billion.
entrepreneurs are willing to risk their own assets.
• Apple - It’s 1976, two guys make a sale, buy
Another imaginative entrepreneur, a few years ago,
a bunch of parts bought on credit and deliver
skirted the law when she used several department
some computers. 2011 brand value: 153 billion.
store credit cards to buy products and then
• Gillette started in 1903 with 25 cents. 2011
returned the goods, charming the male clerk into
brand value: 19.7 billion.
giving her cash back. Thus a successful small
business was launched. This is not a method of
• Nike, in 1963, launched with 1,000. 2011 brand
accessing start-up funding that we recommend for
value: 13.9 billion.
many reasons, not least because the interest rates
• Hewlett Packard started in 1938 with the
charged by such credit cards is extremely high.
princely sum of 538 dollars. 2011 brand value:
35.4 billion.
Programs
The Self-Employment Program, offered by the
You can do it too, with a lot of hard work, sound
federal government through service agencies
planning and perhaps more than a fair share
across Canada, is an employment program that
of luck.
provides financial and entrepreneurial assistance
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Futures Development CorporationThe Power of Knowledge
If you are considering starting, or are in the process
Knowing Your Industry
of starting, a business then the single biggest
You cannot operate in isolation, you are part of an
thing you can do to stack the odds of success in
industry and it is vital you understand how that
your favour is to increase your knowledge base on
industry operates, what your place within it is, and
everything that might have an impact on it. What
where the industry is heading. If you can’t answer
follows are several dozen things you should know
the following questions authoritatively, then you
before launching your business. Why?
don’t know the industry you plan to operate in
well enough.
Because increased knowledge:
• Who are the industry leaders (both in terms of
• Gives you more confidence
corporations and CEOs)?
• Improves communications
• What is the media saying about your industry?
• Encourages closer relationships
• Who are the industry players currently in the news?
• Makes you an expert, not a bluffer
• What are they doing and why?
• Gives you an objective point of view
• Who are the pundits (people reporting on the
industry, and being interviewed) and what are
• Allows you to become the eyes and ears of your
they commenting on?
buyers
• Technologically speaking, what’s new and
• Means you are in touch with your customers,
what’s coming?
industry and marketplace
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Futures Development Corporation• How are the major players in your industry doing • I know how people in my industry operate
in the stock market? locally.
• Do you know the trade magazines representing • I am a member of local industry associations,
your industry? and those allied to it.
• Do you read them? • I follow what’s happening in the local, provincial
and national economy.
Knowing Your Market
• I read the local press and am especially aware
It doesn’t matter whether you define your market
of what’s happening in the business community.
geographically, or demographically, you need to
• I regularly attend business mixers, and am well
know it intimately. The greater knowledge you
known in the local business community.
possess, the more likely you are to become a
major player within your market. Read the following
John Nesbitt in Megatrends said that 100 people
statements, and if you can’t honestly agree with
run each town no matter the size - how many of
each of them, you might want to start doing some
the 100 in your town do you know? The same
homework. If your market is not local, but perhaps
can be said of any market, any industry, or any
in another part of the country, or even overseas,
community.
then interpret “local” in the questions below as
whatever is “local” to your business.
Knowing Your Customer
• I know the strengths and weaknesses of my
(Personally)
competition.
When it comes to our customers, the more we
know about them the better we will be able to
• I know exactly which companies and/or
serve them. Here is a list of some of the things you
individuals are most likely to buy what I sell.
should know about your customers and prospects.
• I understand the needs and wants of the
How much do you know?
companies/individuals on my prospect list.
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Futures Development Corporation• What do they think of you, and your company? • Its management structure.
• What excites them - their hobbies and interests • Its last year’s revenues.
for example?
• Whether it is budgeting for an increase in sales
• Do they have a family, are they married, single? revenues this year.
• What are their needs in relation to what you • What profit it made last year, or at least whether
sell? it is in a profitable situation.
• What are their passions? • The names of the owners and directors, and
what other companies they own.
• How honest and truthful are they?
• What competitors of yours they are currently
• What is their political persuasion?
buying from.
• Are they fans of your industry, or do they see
• How much they are paying for the same or
you as a necessary evil?
similar products/services.
• Have they had issues with any of your
competitors in the past?
Knowing Your Product or
• Do you know what social style they are (i.e.
Service
Analytical, Driver, Expressive, Amiable)?
This sounds strange at first sight; of course you
know all about what you sell, but can you answer
• Do you know their birthday?
the following questions? If you can, you’re all set. If
not, then it would be wise to seek out the answers
This list is not exhaustive, but is meant to give
before going forth into the marketplace.
you an idea of the things that might help you
make a sale to people. The more you know about
• How does your product/service help your
someone the better you will interact with them,
customer?
and the better relationship you will build. People
buy from people they like and trust and that is
• What needs/problems do they have that your
based on mutual understanding.
product/service answers?
• How does it solve their problem(s)?
Knowing the Customer
• What are the strengths of your product over
(The Company)
your competitors?
Knowing the personality and characteristics of
you prospects is only half the story, you need to • What are the weaknesses of your product in
have an equal understanding and knowledge of comparison to your competitors?
their businesses too. Here are the basic things you
• Do you know the complete technical
should know about the companies you plan to do
specifications of your product?
business with. Not all the information is readily
• How competitive is your pricing?
available, but most can be sought out, or even
asked of the companies themselves.
• In what way is your product or service unique?
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Futures Development Corporation
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