We’ve all fantasized about turning a passion project into a full-time job by becoming our own boss. The pull of deciding your own schedule and making enough money to live your dream life is strong.
And this dream is shared by many Canadians. In fact, RBC’s recent small business poll found that the majority of Canadians (54 per cent) have the urge to open a small business. Here’s the good news: if you’re going to start a business, Canada is the place to do it. StartupBlink, a website that ranks the best cities and countries to start a new business, has ranked Canada’s startup ecosystem as the third best in the world.
But it’s not enough to have a great idea; you need to know how to turn that idea into profit. Innovation, Science and Economic Development Canada found that only half of new firms (51 per cent) survive their fifth year of operation. The key to long-term success for any entrepreneur lies in their first foundational steps of planning and setting up their business venture. Here are seven tips to successfully get your business set up and transition from a 9-5 employee to a full-fledged entrepreneur.
Seize learning opportunities to build your entrepreneurial skills
Use your time wisely. If you’re working a day job and a side hustle at the same time, take advantage of the various learning opportunities. Now is the time to take up that offer of free seminars or courses and volunteer for projects that will expand your entrepreneurial skill sets in areas such as strategic planning, people management, budgeting, networking and communications. You can also consider taking classes at your local college or community programs to hone your foundational knowledge of key business principles like accounting, business operations and marketing.
Seizing these learning opportunities in your 9-5 will broaden the expertise and value you can bring to both your business and your current day job.
Build a business plan
Producing a business plan is important but the real value lies in the development process as it will push you to dive deep into the market you’re about to enter and examine your business critically. Conduct thorough research around your industry, customer demographic, purchasing behaviours, competitors and potential suppliers and distributors. While the internet makes it easy to conduct research from the comfort of your home, it isn’t enough. Make sure you get out there and speak to people who are already in the business. Talk to your mentor or experienced professionals like your lawyer, accountant or advisor at your bank, and connect with other entrepreneurs both within and outside of your target industry. This is the time to ask a lot of questions to understand the industry you’re stepping into and gather insights from other business owners who have lived through the early stages of entrepreneurship and survived to tell the tale!
Test & learn
Once you’ve clearly defined your customer base, get to know them on a deeper level. Find out, what drives their purchasing decisions and how you can convince them to buy your products or services through market testing. Testing your product or service with a small focus group of target customers before you go all-in is an essential part of the planning process. It will help you determine the viability of your business, validate your assumptions, identify weaknesses and improve your offering before it’s introduced to the mass market.
Get set up & make it official
There are some early foundational steps to consider to set yourself up for success and minimize the hassle down the road. One of them is making your business official by registering or incorporating it. Ownr.co is an affordable online service powered by RBC Ventures that simplifies the registration or incorporation of your business.
Once you’ve registered your business, consider separating your personal and business accounts. Doing this will help boost the credibility of your establishment, especially when dealing with the transfer of money between suppliers and customers. Doing this early will also help you avoid the headache and hassle of trying to untangle your personal and business finances for your accountant around tax season. You can easily and quickly do this online with RBC’s Online Business Deposit Account.
Figure Out Your Finances
It is critical that you determine how much money your venture will cost – both in terms of initial investments and day-to-day operational costs. Develop a short and long-term cash flow projection to understand your profitability timeline and identify additional financing needs you might need to plan for. During this process, determine how much money you will need to sustain yourself if you decide to take your business full-time and try to set aside a little extra. It’s important to create a financial cushion for life’s inevitable surprises.
Once you’ve developed a cash flow plan, it’s a good idea to share it with a business advisor at your financial institution and soundboard ideas and feedback. If you’re asking for financing support, your business and cash flow plans will instill confidence that you’ve thought through the ask and drive a more productive planning conversation.
Simplify your operations
It’s easy for entrepreneurs to get buried in the weeds of administrative tasks such as invoicing, payroll, expense tracking and finding working spaces. While these are essential to your business operations, these tasks also take up valuable time you could be spending on more strategic efforts to attract clients and grow your business.
RBC has many offerings that go beyond traditional banking to alleviate these administrative hassles and help entrepreneurs manage and grow their business with ease. If you’re an RBC client, many of these services are either free or provided at preferred rates. Helpful tools for entrepreneurs include things like: Wave, an easy-to-use invoicing and expense tracking software; WeWork office & meeting room spaces; and Promote by Acquisio – a digital marketing tool to help business owners find and attract new customers.
Be Patient and Ask for Help
Starting and growing a business is an incredible investment of your time and resources, and is a great test of patience. You might not make a profit until after your first, second or third year. It’s important that you don’t let this discourage you. There’s no shame in asking for help if you need it. Lean on family, friends, mentors or other entrepreneurs for support. You can also seek guidance from your professional contacts such as your lawyer, accountant, former colleagues and business advisors at RBC who can guide you along your entrepreneurship journey.