Part 3 - Starting Your Business
- Where to get financing
- Access expert help
- How to incorporate
- Complying with government regulations
- Buying insurance
- Choosing premises
- Determining technology needs
- Hiring employees
- Marketing your business
- Business start-up: wrap up
You've put in a lot of effort up to this point. Now that you've got your business plan in place, you're ready to do the work that will take you from serious business planner to business proprietor. If you perform all the tasks listed in this section - from getting your financing in order through to marketing your new business - you will be ready to hang that shingle you've been working so hard to get.
"When you're starting out, you have to be confident in and love what you're doing. If you believe nothing is going to stop you, then nothing will stop you."
Go Off the Grid Inc.
"Stay focused on your niche. You can't throw too many darts at the dartboard when you have limited resources."
Real Tech Inc.
"The most common misconception people have is that the government has money to hand out. There may be some grants out there, but they are extremely specific and new entrepreneurs rarely, if ever, qualify for them. Entrepreneurs have to understand that there's no free money to start up a business."
Judi Riddolls, Executive Director
Guelph Wellington Business Enterprise Centre
"I made contact with the bank right away and shared milestones, like winning awards, so when it came time to establish credit, they felt like they knew me. It's good to develop personal relationships."
Kokimo Candles Ltd.
Now that your business plan is complete, you're ready for start-up. The first item on your agenda: putting together your financing. One of the biggest challenges for new entrepreneurs is accessing capital, especially if you have little or no assets. Bank financing is often not the traditional route. There are a number of options and the likelihood is that you'll need a combination of some of the following:
- Personal assets
Chances are, you'll need to use some of your own money for start-up, either from your savings or from personal property you can sell. Although you can also access start-up money from your credit cards or your RRSP, you should investigate carefully before going either of these two routes. You may pay a high rate of interest on credit card money--unless you've got or can get a low-interest card--and if you take money out of an RRSP you'll have to add the amount to your income and likely end up paying tax on it.
- Love money
While borrowing from family and friends is an option--and lots of entrepreneurs have done it, including Microsoft's Bill Gates--it's one you need to think about carefully. Money often changes relationships and it may not be worth it to involve family and friends in your business venture, particularly if they're not entrepreneurs themselves.
If you do borrow from family or friends, make sure you formalize any loans by way of a promissory note that sets out the amount of the loan; whether interest is payable and, if so, at what rate; how and when the loan is to be repaid; and what security, if any, you're offering for the loan. A promissory note clarifies the agreement for both parties.
- Financial institutions
Aside from your own personal resources, financial institutions--banks, trust companies and credit unions--are the most common source of financing for small businesses. They can provide a number of options, including personal lines of credit, short-term loans, long-term mortgage loans and, in some cases, loans against inventory or accounts receivable. The Canadian Bankers Association (CBA) has links to all its member charter banks.
- The Business Development Bank of Canada (BDC) is another possible source of financing. BDC bills itself as a leader in delivering financial and consulting services to small business. Depending on your situation, BDC may be able to provide start-up financing.
- Angel investors
Angels are wealthy individuals or groups who invest their own money in promising new businesses, usually ones in the same field they come from. Typically, angels provide money--usually between $10,000 and $2,000,000--in the early stages of the business in return for a share in it. Angels target businesses with high profit and growth potential. Angels generally take an interest in the operation of the business, and their input can be very helpful. Your lawyer or accountant may be able to help you find an angel, or you can ask around in your local business community. You can also try the National Angel Organization
- Venture capitalists
Like angel investors, venture capitalists look for businesses with high growth and profit potential. They offer money, management expertise and connections for a share in the business. As a rule, venture capital companies won't look at an opportunity that requires less than $500,000, and most prefer a deal size of at least $3 million. You can get a list of venture capitalists from the Canadian Venture Capital & Private Equity Association.
- Barter exchanges: You can get creative and barter with other companies, offering your product/service in exchange for anything from advertising to goods.
- Government and non-profit financing options
There are a number of government and non-profit organization financing programs, some of them aimed at specific target groups, such as youth and Aboriginals. Many of them include valuable hands-on training, planning assistance and mentoring services. Some of the main financing programs include:
- The Canada Small Business Financing Program makes it easier for small businesses to get loans from financial institutions by sharing the risk with lenders. The maximum loan size has increased to $500,000, of which no more than $350,000 can be used for purchasing leasehold improvements or improving leased property and purchasing or improving new or used equipment.
- The Community Futures Development Corporation in Ontario provides repayable financing of up to $150,000 on commercial terms through loans, loan guarantees or equity investments to help finance new or existing small businesses that help maintain or create jobs in rural and northern communities.
- The Canadian Youth Business Foundation (CYBF) Loan Program provides loans of up to $15,000 to young entrepreneurs between 18 and 34 to help cover start-up costs.
- Summer Company provides training, mentoring and up to $3,000 in grants to students running their own summer business.
- The Self Employment Assistance program provides financial support to unemployed people eligible for unemployment assistance to get their businesses up and running.
How to prepare
The truth is that getting financing for a new business is challenging. So, when you meet with a banker or investor, be thoroughly prepared. Remember, you're asking for money--and they'll want to know how you intend to use it and pay it back.
- Make sure you have your business plan, executive summary and financial statements with you--and be sure you know them inside out.
- Know your credit rating and be able to show that it's strong (if it is), or that you're taking concrete steps to improve it (if it isn't).
- Be well informed about your business and the industry in which you operate.
- Be able to show what you plan to do with the money and why you can be trusted with it.
Finally, be persistent. The likelihood is that you'll be turned down by a number of lenders or investors before finding one that will make that all-important leap of faith. If you are turned down by your bank, always ask your banker for suggestions on other sources.
What Small Business Enterprise Centre managers say about financing:
"You can't expect others to invest in you if you are not going to invest in yourself. Do your business plan, understand what kind of financing you need - for example, asset-based financing or - and what is available out there. It will be easier to access financing for a piece of equipment rather than working capital to do marketing or to pay for staff. Create a plan so that your investor feels comfortable investing in your business. Whether you're seeking financing or whether it's your own money, you should do the same due diligence."
Trudy Belanco, Manager
Brantford-Brant Business Resource Enterprise Centre
"Don't close out any ideas. If you hear a 'no' from a bank or can't get any grants, there are still several different options - including friends and family, personal lines of credit and even the Community Futures Development Corporations in Ontario. If you truly believe in what you are doing, you will find a way to finance it."
Ken Laffrenier, Manager
"When you are starting out, especially if you have little or no assets, options other than financial institutions include family or friends, suppliers, Economic Development Corporations, and selling shares. Using a credit card can be a slippery slope, so be careful. Don't extend yourself beyond what's possible for the business to generate within a period of time. Determine what is feasible for you personally versus what you can get financially from other sources. Do some forecasting and competitive analysis and examine how your life matches the business you wish to start personally and financially. Your plan and strategy must match what is fiscally possible. If you can't get financing, is there some other business you can start to generate some cash immediately and build up to your goal? For example, rather than starting a restaurant before you have any assets, start a catering business first."
Jane Phillips, Manager
Business Enterprise Centre Owen Sound
"It's important to access experts because, when you are getting started, you need that kind of perspective. Surround yourself with people you trust who you can call anytime for feedback and to ask questions."
Real Tech Inc.
Once you've got your financing underway, you can turn your attention to the other details involved with start-up. Since you're likely to need advice with some of them, you should consider hiring expert help before you go any further--that is, if you haven't already. Complete the Expert Help checklist as a guide to the kind of expertise you are likely to need.
When hiring experts, check to see if they're experienced in dealing with small business matters and that their fees are reasonable. The best way to find someone you can trust is to ask for recommendations from colleagues, family and friends, particularly those in business for themselves. You can also ask your local Small Business Enterprise Centre (SBEC).
Make sure you meet with prospective candidates to be sure you will be comfortable working with them. Ideally, you and your lawyer/accountant/insurance agent/banker should work as a team.
While hiring experts may seem like a big expense, particularly at start-up when finances can be tight, they're likely to save you money in the long run. It's all about prevention. Rather than calling in experts when you're in trouble and have a crisis, you will be much better off using their expertise to ensure you don't get into trouble.
All small businesses are subject to certain laws and regulations and, as a small business owner, it's your responsibility to know which ones apply to your business and make sure you follow them--this is definitely an area with which your experts can help you.What Small Business Enterprise Centre managers say about accessing experts
"Build a good team around you so that you don't feel isolated and can access skills and information you need to be successful. This includes a bookkeeper, accountant, as well as a lawyer, who should be in place before you need one, and even city municipal staff."
Jane Phillips, Manager
Business Enterprise Centre Owen Sound
"Never assume anything. Talk to professionals - a lawyer, bookkeeper, accountant and banker - who have expertise, especially if you are borrowing money."
Rob Day, Consultant
Business Advisory Centre Northumberland
Quick Tip from an Entrepreneur
"Get someone to help you set up a bookkeeping system right from the start and talk to an accountant. They can help you be very aware about where you are spending your money."
If you've decided to incorporate provincially, you'll need to:
- fill out and file articles of incorporation with the Ministry of Government Services
- submit a Newly Upgraded Automated Name Search (NUANS®) report (unless you're incorporating as a numbered company. Check the Yellow Pages or Google under the heading "Searchers of Record" for a name search company.
- pay a fee
You may submit your documents:
- in person or by mail to the Companies and Personal Property Security Branch Public Office in Toronto or in person at one of the Land Registry Offices.
- electronically, via one of three service providers under contract with the Ministry.
If you want to provincially incorporate a non-profit organization, check with the Ministry of Government Services.You can also call the Ministry at 416-314-8880 or 1-800-361-3223 toll-free in Ontario.
Having an experienced lawyer or accountant look after your incorporation is helpful. He/she can make sure your incorporation forms are filled out properly, saving you possible problems down the road. Your lawyer or accountant can also tell you whether or not it's advisable to incorporate federally. For more information on federal incorporation, both for for-profit and non-profit organizations, contact Corporations Canada.
"We live in an incredible place in Ontario and in Canada, where it is so easy to start a small business as far as government regulations go. It's a bit of a misconception that there is so much to go through in order to start."
Jane Phillips, Manager
Business Enterprise Centre Owen Sound
Both the federal and Ontario governments have been working hard to make it easier for small business owners to comply with their programs. You can now apply or register for the following federal and provincial programs using Business Registration On-line, provided by the Canada Revenue Agency (CRA) in partnership with ServiceOntario:
- name registration
- corporate income tax
- Goods and Services Tax (GST)
- Retail Sales Tax (RST)*
- payroll deductions
- Employer Health Tax (EHT)
- Workplace Safety & Insurance Board (WSIB)
If you've incorporated your business, you've already registered your business name. If you've chosen not to incorporate, you'll need to register your business name with the province of Ontario, unless you're operating a sole proprietorship under your legal name. (Adding even one word to your legal name, e.g., Enterprises or And Company, requires registration.) Registration is easy and quick. You can register your business name:
- online via ServiceOntario or at any ServiceOntario workstation
- in person or by mail at the: Companies and Personal Property Security Branch
393 University Avenue, Suite 200
Toronto, ON M5G 2M2
Toll-free: 1-800-361-3223 (in Ontario)
The registration fee is payable on line by credit card ServiceOntario or you can send in your payment by mail for a slightly higher fee. Registration is valid for five years.
Before registering your business name, check to see whether the name you're planning on registering is already in use. If it is, choose a different one. You can do a name search at ServiceOntario at the same time as you do your business registration for an additional fee.
Businesses must pay taxes on their income to both the federal and provincial governments. Your income taxes are calculated on your profit--your gross income or revenue--minus your legitimate expenses, which include the cost of:
- office rent and maintenance
- mortgage interest and property taxes on property you own and use in your business
- leased equipment
- cost of buying or manufacturing any goods you sell
- delivery, freight and transportation expenses
- insurance premiums
- fees for licences and permits
- fees for membership in a trade or commercial association
- legal, accounting and other professional fees
- business advertising
- business travel
- business entertainment
- employee salaries and benefits
For more details, visit the Canada Revenue Agency (CRA) but, remember, when it comes to income tax, having a good accountant can really pay off. An accountant will be able to help you take advantage of all your legitimate expenses, so you don't overpay your taxes.Goods and Services Tax (GST)/Harmonized Sales Tax
Effective July 1, 2010, Ontario merged its Retail Sales Tax (RST) with the federal Goods and Services Tax (GST) and moved to a federally administered Harmonized Sales Tax (HST). The HST rate for Ontario is 13%, consisting of a federal part at 5% and a provincial part at 8%.
The RST was charged on many purchases made by businesses in manufacturing goods and providing services. It penalized business by taxing them at every step in the production, distribution and retail processes - making it a tax on a tax on a tax. The HST generally removes this hidden tax by permitting the supplier to claim input tax credits (ITCs) for the tax the supplier paid on most business inputs. These ITCs will mean lower prices for many consumer purchases and lower business costs, which experts agree improves the competitiveness of Ontario businesses and results in increased business investment, leading to more jobs and higher incomes.
As part of the move to an HST, Ontario has wound down broad-based tax provisions of the current Retail Sales Tax Act, with the exception of certain provincially levied taxes, such as the sales tax on specified insurance premiums and private transfers of used vehicles (see below).
You generally have to register for GST/HST if you provide taxable supplies and your total revenues from taxable supplies exceed $30,000 ($50,000 for public service bodies) in a single calendar quarter or over four consecutive calendar quarters. In addition, charities and public institutions must also have gross revenue of more than $250,000. You do this by applying for a business number with the Canada Revenue Agency (CRA) either by phone at 1-800-959-5525, online at www.businessregistration.gc.ca or online at ServiceOntario.
When you register for GST/HST, the CRA will assign you the reporting period that requires you to file your GST/HST returns the least frequently. You may be able to choose, based on the amount of your taxable supplies from your previous fiscal year, one of the optional reporting periods.
Once you register for the GST/HST, you must collect the 13% HST on all taxable (other than zero-rated) supplies of property and services that you provide to your customers, unless a point-of-sale rebate applies. Ontario provides point-of-sale rebates of the provincial part of the HST payable on sales of certain designated items. You will automatically credit the provincial part of the HST and only collect the 5% federal part of the HST payable on the sale of these items. Crediting purchasers in this manner will not affect your ability to claim ITCs on your business inputs.
As a GST/HST registrant, you can recover the GST/HST you paid or owe on your purchases and expenses (with limited exceptions) related to your commercial activities by claiming an ITC on your GST/HST return. However, charities that are GST/HST registrants are generally not entitled to claim ITCs.
As a temporary measure, large businesses (other than public service bodies) and certain financial institutions and persons related to these financial institutions are unable to claim ITCs for the provincial part of the HST paid on certain restricted groups of expenses. After the first five years following the GST/HST implementation, full ITCs on these purchases will be phased in, in equal amounts, over a three year period.
Even if you don't expect to have revenues in excess of $30,000 (or $50,000 for public service bodies) in your first year of business, you may want to apply for a GST/HST number and charge the tax anyway. You'll be able to get back the GST/HST you pay on the goods and services your business buys--and not collecting it sends a message to your customers that your business is very small, which may not be the impression you want to give.
For further information regarding the GST/HST, please refer to the CRA's publication RC4022, General Information for GST/HST Registrants available on its Web site at www.cra.gc.ca or call 1-800-959-5525.
Retail Sales Tax (RST)
The RST and its related exemptions, special rates, credits and rebates under the Retail Sales Tax Act generally ended for transactions on or after July 1, 2010.
RST applies at a rate of 13 per cent on a used motor vehicle purchased privately. Purchasers will pay the RST at the Ministry of Transportation, Driver and Vehicle Licence Issuing Office when transferring the ownership of a used motor vehicle bought from a seller who is not a motor vehicle dealer in Ontario.
Also, RST applies at a rate of 8 per cent on certain types of insurance, including group insurance, contributions paid into funded plans or on benefits paid out of unfunded plans as well as payments made into certain insurance schemes or compensation funds. Certain costs and fees, such as administration fees for benefit plans, are exempt from RST. Generally, administrative or management services provided to these plans or funds are taxable supplies for GST/HST purposes.
If your business sells insurance, you must charge RST, collect it and remit it to the Ontario Ministry of Finance. You must also register with the Ontario Ministry of Revenue and get an RST vendor permit. You can do this at the Ministry of Revenue or at ServiceOntario.
- Employment Insurance
- Canada Pension Plan
It's your responsibility to get a payroll account with the Canada Revenue Agency (CRA). You'll have to deduct EI, CPP and income tax from the amount you pay each employee and send those amounts, along with your share of CPP and EI premiums, to CRA.The provincial payroll deductions are:
- Workplace Safety & Insurance Board (WSIB) Premiums--to determine whether or not you need to pay these payroll deductions, check with the WSIB office nearest you, listed on their website.
- Employer Health Tax (EHT)--unless your payroll exceeds $400,000, you're not required to pay this deduction.
As an employer, you hold payroll deductions in trust for the government until you submit them, so it's important to keep these amounts separate from the operating funds of your business. Visit ONT-TAXS, Ontario's secure, convenient and free online tax service for businesses and their representatives for easy ways to file.
You're required by law to keep thorough, organized books and records and, in the case of income tax, you have to hold onto them for at least six years after the taxation year they relate to. This can be somewhat onerous.
If you have an accountant, he/she can either set up and do your books for you, help find you a good bookkeeper (bookkeepers are generally less expensive than accountants) or recommend a good bookkeeping and accounting software program so you can do it yourself.
Many types of businesses require licensing from the federal, provincial and/or municipal government. These requirements could include an operating permit, special permission to operate in your chosen location or specific qualifications for you and/or your employees.
You can use BizPal, a convenient, time-saving online service that will help you figure out what permits and licences you need from the government of Canada, the Ontario government and participating local governments.
For more information on these regulations, call the Business Info Line, a collaboration between ServiceOntario and Industry Canada, at 1-888-745-8888 or visit the Regulations, Licences and Permits section of the Canada Business web site.
All municipalities have zoning and building regulations. You'll have to check with municipal authorities to ensure that your business conforms.
It's important to know your rights and responsibilities when dealing with consumers. The Ministry of Consumer Services provides all the information needed to comply with the Consumer Protection Act and any other legislation specific to your business.
Property insurance, business interruption insurance, general liability insurance, key person insurance, disability insurance, errors and omissions insurance. The types of insurance available today seem almost endless, so how do you go about protecting yourself from risk without breaking the bank?
Here's where having an experienced insurance agent or broker can really make a difference. He/she can help you evaluate the risks in your particular business and advise you on the coverage you need, as well as the amount of coverage.
Often your agent or broker can find a package geared to your particular kind of small business, which is less expensive than purchasing individual insurance policies.
And if yours is a home-based business, don't overlook the need for business insurance. Your home insurance policy may not cover business assets--and worse yet, having your business located in your home may void your regular home insurance policy, so you need to discuss all this with your agent or broker.
Unless yours is a home-based business, you'll need to rent or buy premises. To do that, you'll need to determine a number of things, including:
- the kind of space you're looking for
- the location--its proximity to potential customers and clients, and the zoning for your type of business
- availability of parking
- supplier access
- the cost to purchase, if you're going that route
- the amount of rent you're able to pay and whether it includes utilities and services
- the amount you're willing to pay for improvements, if necessary
Depending on your type of business, you may want to consider sharing space at first to keep expenses down.
You may also want to investigate the possibility of renting space at a business incubator. Both mixed-use and sector-specific business incubators are becoming increasingly popular because they provide hands-on management assistance, education, technical and business support services, networking resources and financial advice--and as a result, have a high success rate. For more information on business incubators, contact the Canadian Association of Business Incubation (CABI).
If you decide to rent premises, you'll need to sign a lease with the owner. Make sure your lawyer goes over it carefully and explains it to you before you sign it so that you understand the commitments to which you are agreeing. Commercial tenancies aren't covered by the same landlord-tenant legislation as residential ones, and you need to be much more careful when renting commercial space.
If you decide to purchase, get help from a real estate agent who specializes in commercial properties and have your lawyer review your offer before you buy.
Ontario is determined to make Ontario accessible for people with disabilities, and in 2005 passed the Accessibility for Ontarians with Disabilities Act. The first standard to come into effect was the Accessibility Standards for Customer Service. All businesses or organizations that provide goods or services to the public or to other third parties in Ontario are legally required to comply with the requirements of the standard.
Every business has different technology needs, depending on the nature of the business and its strategies. As a starting point, review the Business Technology Checklist which itemizes the common technology required to run a business.
There are some key points to bear in mind when it comes to technology:
- Get professional help. If technology is not your strength or passion, don't waste your time, energy or mindspace. There are many options available to help small business owners, such as consultants, companies and even office supply or computer and electronics stores that offer technical help.
- Focus on how technology can benefit your business. There is a dizzying array of choices available. Resist the temptation to purchase the latest tool just because it's new if it really will not bring any value to your business.
- Back up, back up, back up. Failing to back up data is one of the most common errors that technology experts see business owners make. There are many options available, including virtual back up services, to ensure you have a fail-proof system and a way to recover data should disaster strike. And be sure you have a paper file of your technology documentation such as serial numbers and warranty dates.
- Leverage your use of technology. You will reach your goals faster and be more profitable if you learn to use technology to improve productivity and market your business. At a basic, administrative level, this includes things like using accounting software to improve your financial management and having a contact management system to house a database of customers and prospects. At a more advanced level, you can learn to use technology to market more effectively.
"HR is not about dollars and cents alone or about a rigid schedule. It's about the people and the whole package of the work environment, such as providing a positive environment and flexibility for time off and vacations."
Kokimo Candles Ltd.
While you may not need to hire employees at first, chances are you'll have to at some point, particularly as your business grows. Review the Employee Requirements Checklist for the responsibilities you take on when you become an employer.
As an employer, it's your responsibility to know what employment and workplace health and safety standards you're required to follow. These standards are covered in four Acts administered and enforced by the Ministry of Labour:
- Employment Standards Act
- Pay Equity Act
- Occupational Health and Safety Act
- Smoking in the Workplace Act
The Employment Standards Act covers things like:
- hours of work
- minimum wage
- public holidays
- overtime pay
- vacation pay
- equal pay for equal work
- benefit plans
- pregnancy leave and parental leave
- emergency leave
- termination of employment
- severance pay
- payments on termination
- retail business establishments
The Pay Equity Act ensures that women and men receive equal pay for performing jobs that may be very different but are of equal value.
The Occupational Health and Safety Act covers the responsibilities of employers, supervisors, workers and suppliers with regard to workplace health and safety. This includes things like:
- providing a safe workplace
- preparing an occupational health and safety policy for the workplace
- informing employees about possible hazards and training them in the handling, storage, use, disposal and transport of any equipment, substances, tools and materials
The Smoking in the Workplace Act sets out clear restrictions on smoking in the workplace to limit exposure to second-hand smoke.
The quality of the people you recruit will have a great impact on your company - its ability to serve customer needs, its growth and its profitability. Hiring mistakes can be costly. Before you hire anyone, you should:
- think carefully about your needs so you can be clear about what qualifications and skills you're looking for and prepare detailed job descriptions
- review your core values and look for the kind of people who will best fit in
- determine how and where you'll find candidate
- prepare a list of questions to cover in a job interview
- consider pre-employment testing that will help you choose the right candidate
- determine whether or not training will be required and, if so, how you'll arrange for it
- investigate Human Resources and Skills Development programs or provincial government programs that might help cover some of the costs. Also investigate Employment Ontario programs to locate and recruit skilled and talented workers.
- establish policies for things like performance evaluations, wage increases, bonuses, vacations and ongoing training
When hiring, be clear about:
- your vision and company culture
- the employee's duties
- skills, knowledge and education required
- level of supervision and training provided
- the start date (and end date, if applicable)
- the hours of work
- the rate of pay
- benefits (if any) you're providing
- any probation period
And remember to ask for--and check--job references. Don't assume a candidate is perfect.
While it's not legally necessary to formalize an agreement between an employer and employee, it's often a good idea to have a written contract. That way, both parties know what's expected of the other and can refer back to it, if necessary.
Determining compensation can be a delicate balance of satisfying employee expectations and keeping you profitable. Consider the base compensation, any commissions, bonuses or profit sharing, and benefits. In determining what the job is worth, check on industry standards by calling around.
Beyond the mandatory benefits, such as vacation pay, maternity and parental leave, worker's compensation insurance and contributions as an employer to employment insurance and the Canadian Pension Plan, you can offer other benefits like dental, drug, long-term disability and life insurance, and a pension plan.
If cash is tight, bear in mind that things like flexible hours, scheduling and time off are increasingly important to employees today.
When estimating the actual cost of an employee, use the 1.2 rule: take the employee's salary and multiply it by 1.2. This will compensate for days off for illness, vacations and statutory holidays.
Remember, you can only go so far as a one-person show. If you want to grow your business, it's all about managing and leading people. Check out Motivating and Retaining Employees in Part 4. If you're not in a position to hire full-time staff, other options include hiring independent contractors and/or co-op students from universities, colleges and even high schools.
As any successful entrepreneur will tell you, you can have the best product or service around, but if people don't know about it, your business will fail. Marketing is critical to your success and a marketing plan should be an integral part of your business plan. Check out this sales and marketing tool to help develop your marketing plan.
In the start-up stage, the cost of marketing is always an issue. So, once you've honed your message, how do you promote your business without breaking the bank? Get creative! Start by thinking like your target market. Where do your potential customers go to get information about a similar product or service and what would make them want to buy your product or service over the competition's? Then consider the ways you can reach your target market when you have limited funds.
Often, networking and public relations (PR) strategies can be more effective for start-ups than traditional advertising, which tends to be expensive. The rise of social media tools such as blogs and social networking sites like Facebook, Twitter and LinkedIn represent a free and potentially effective avenue for your business. You can use these to listen to your target audience and its concerns, share expertise and gain credibility. For more ideas, review Marketing Start-Up: Quick Tips.
Remember, if you want to be taken seriously as a business, you should present a professional image from the get go. That means investing in branding, which is not just something for large companies with large budgets. Effective branding tells the world who you are, what you do, and how you do it - your value proposition. It goes beyond your logo and is the whole perception of your business, with your logo just a symbol of that perception. What is your mission? What do you want potential clients to remember about your business? Think about a slogan or tagline that you can use that reflects your business philosophy and use it with your logo on all print and electronic materials. It is wise to hire a graphic designer to create a logo and 'look and feel' professionally.
Once you have a clear message, logo and tagline, use it everywhere, all the time: on your business cards, letterhead, faxes, brochures, newsletter, web site, ads and e-mail signature. The most important element in good branding is consistency in application. By conveying your brand consistently across all your communication efforts, you will establish and maintain awareness and reinforce your brand with customers and prospects at every opportunity.
Quick Tip from an Entrepreneur
"Invest in branding and your professional image. I even wear a green vest or jacket when I give my presentations to reinforce my Green Steps brand and my message."
"It's better to invest in a well-designed website rather than having Sally's brother's cousin do one for $100. Otherwise, you can be missing out on using it as a tool to track who is visiting and to capture names for a contact management database."
Manager Brantford-Brant Business Resource Enterprise Centre
Rapid advances in technology have opened up a whole new world of online marketing to supplement more traditional marketing approaches. Consider these:
1. Website. Whatever your business, you should seriously consider creating and maintaining a website. A website is at the heart of e-commerce --conducting business on the Internet--and for an increasing number of businesses it's an essential tool in today's economic environment.
An effective website can help:
- coordinate your business operations with outside partners, suppliers, distributors and customers
- promote, market and sell your product or service around the world and around the clock
- reduce the costs and increase the speed of customer support and communication
- assist with market research
You don't have to spend a fortune to get a website that works well for your business. There are many independent web developers who can do the job for a reasonable price. Get recommendations from companies with websites you think are good.
Just as important as having a good website is ensuring that people can find it on popular search engines like Google, Yahoo! and AOL. That means you'll either have to learn the intricacies of search engine placement yourself, or find someone who knows. Ask people involved in e-commerce for their recommendations.
Another thing to take into account for your website is your domain name. You can register any domain name you want, as long as nobody else is already using it. Before you choose a domain name, check to be sure it's not the same--or confusingly similar--to another business trade-mark or trade name.
For more information on registering a domain name, check out the Internet Corporation for Assigned Names and Numbers (ICANN). The site also includes contact information for the nine ICANN-accredited registrar companies in Canada.
Quick Tips from Entrepreneurs
"A web presence is more than just a website. Experiment with different key word search terms, meta-tags and cross links to ensure your site appears on the first page of popular search engine sites. If you're not on the first page, you might as well not be there at all."
Combat Sports Inc.
"Use your website to build marketing lists. Have a sign-up for people to leave their e-mail in order to receive a permission-based e-bulletin."
2. E-commerce. Creating online shopping capabilities for your website is more expensive and may be out of reach at start-up, but there's no question that consumers increasingly expect to be able to make their purchases online. Depending on the kind of business you have, e-commerce may be a priority for you.
3. E-marketing. A regular email broadcast or e-newsletter can be a cost effective way to keep your firm top-of-mind with customers.
4. Web networking. Social media tools (blogs, Facebook, Twitter and LinkedIn) are another cost-effective means of marketing your business.
Check here for more on the essentials of online marketing.
What Small Business Enterprise Centre managers say about marketing your business.
"People often think 'If I build it, they will come' and will backburner marketing especially if money is tight. As a new business, there are inexpensive ways to market, such as networking, accessing sites that provide free leads to possible contracts as well as networking in your industry and community which is key to developing your profile, credibility and contacts."
Jane Phillips, Manager
Business Enterprise Centre Owen Sound
"Traditional advertising is not an option for a lot of small business start-ups because of how much it costs. Now, with social media, you can target your messages geographically or demographically and that is only going to increase more and more over the next while. I believe that social media will be a very powerful tool."
Rob Day, Consultant
Business Advisory Centre Northumberland
"Be sure to separate the personal from the business when you use social media...and to maintain the marketing component of social media. You can't just have a Facebook page and expect people to visit. Be proactive in sending out messages to invite people to go there. Use it as a marketing tool."
Trudy Belanco, Manager
Brantford-Brant Business Resource Enterprise Centre
Quick Tips from Entrepreneurs
"When you start your business, get a database management program as it will be much easier to market if you have this from the get go."
"Get a comfort level with social media and Internet marketing. The adoption rate has gone past the kicking-the-tires phase both in Canada and globally. Talk to experts and leverage the potential of a proper Internet marketing program."
Xystar Technologies Inc.
"Creating a website is an easy and cost-effective way to advertise your product or service worldwide. Make sure it has value as a sales tool."
Real Tech Inc.
"As important as it is to utilize technology, it's also important to attend industry events and conferences, using face-to-face communication to network and spread the word about your business."
Palomino System Innovations Inc.
As you can see, there are many things to address before you officially open for business. The Checklist: Are You Ready to Start Up? will help you confirm if you have completed what is necessary before you open your doors. If so, then you're in business!