The conception of owning a small business can be an intoxicating adventure. It’s like creating a new born. The excitement begins believing you have a great idea, followed by;
- having the basic skills to get the business up and running,
- enough savings put aside,
- and a few connections to help spread the word about your new small business
For a small business to thrive and survive, probably the most important characteristic an owner needs to develop is grit. Think of growing a small business like raising a child; it takes time, commitment, and a lot of growing pains. Before you go out and spend money on marketing material (business cards, card stocks, or a brand new website) it is vital to first build a solid foundation. The beginning stages can seem tedious and boring; in the long term you will be happy you took the initial steps before plunging to deep and making any expensive mistakes.
A few suggestions to research before making this huge commitment;
Is your small business idea valid?
Will your small business be profitable? Is there a demand for your service or products?
What is the competition? How many small businesses offer the same products or services? Consider creating a survey to learn if there is a need or a want for your small business.
Develop a business plan
A business plan is the core of every business. This is a critical step to develop a solid plan and model for your small business to succeed down the road.
Think of a small business as a long term investment. It can become very expensive if you have equipment, insurance, or vehicles that need to be set up on a payment schedule. Remember to consider your own living expenses such as food, shelter, and clothing. Additional expenses include child care, home maintenance, or emergency funds. Entertainment such as restaurants, concerts, or events might need to be put on hold for the next conceivable future.
Will you be a Sole Proprietor, in a Partnership, or are you thinking of Incorporating your small business? It may not be necessary to incorporate at the start of your small business. Incorporating a business is an expensive and complicated endeavor. An Accountant can help you understand the pros and cons of incorporating your small business.
For many this step may seem minor BUT it is necessary. Before you go out and order business cards, make sure the business name is available and can be registered.
The research done from step 5 will give you clarity how you want to register your small business. Note registration is only available online. The registration process for sole proprietors and partnership is on a different webpage from the registration for Corporations. Make sure you register on the correct webpage.
Bank Account/Credit Card
Every small business should have a separate bank account/credit card from their personal account. Best practice is to allow expenses and revenues to be recorded through the business. In order to open a business bank account you must first have the following documents ready:
- Registered Name (Step 6) and
- Business Registration (Step 7)
You should also obtain a business credit card for your online purchases.
These 8 steps are the core to start any new small business. There are more steps including business accounts for GST, PST, payroll, etc. If you are unsure which business accounts your small business needs to open, please schedule a consultation with Banka & Company, CPA to help you sort through all your questions. Banka & Company, CPA will help you understand when and which business accounts you need to register right away and what you can presently hold off completing. To learn more on getting your small business started, click here for the link small business checklist.
Each step takes time and commitment. The more thorough you are with each step, the more clarity you will have about your small business structure. If you are in thinking or in the process of starting your own business, contact Banka & Company, CPA. We are here to help small businesses plan, manage, and succeed.