Starting a small business?
Starting a small business?
Here’s what you need to know
Successful entrepreneurs embrace risk, but they are also grounded in reality. They understand that behind every great business idea lies extensive research and sound planning. Here are some ways to start planning and get your business off the ground.
Follow your passion. Choose a business that energizes you. You’ll be spending countless hours at it and your home and work life are likely to blur. Entrepreneurs are more likely to succeed if they are pursuing a passion.
Research your market. Do you know who your potential customers are? What makes your product or service unique? Is someone already doing what you’re doing?
Visit the websites of potential competitors to learn about their products, their clients, and how they market themselves. Call them to learn about the kind of customer service they offer. Take the time to research the market before starting your business.
Develop a business plan. A business plan will help you organize your thoughts and direct your energies. Your plan will encapsulate much of your background research. It will outline the goals of your business, how you intend to accomplish those goals, your understanding of the marketplace — the competition and your potential customers — and how you intend to finance your business.
The Scotia Plan Writer for business is a free online tool that can help you create a roadmap for your new venture. [Link to: http://www.scotiabank.com/cda/content/0,1608,CID10328_LIDen,00.html]
Get your finances in order. It’s a good idea to save as much money as you can before you launch your business, as you may need to draw on your savings at the early start-up stages when you don’t have a lot of revenue coming in. You should also establish and maintain a good credit history – this will help you when you need to borrow money for your business.
Borrow smartly. A line of credit can be a very useful tool for you when you start your business. One of the main benefits of a line of credit is its flexibility. Once you are approved for a specific amount of credit, you can draw on the money when you need it, without having to reapply each time. And you pay interest only on the amount you draw on. Having a line of credit will also help your business establish a good credit history.
Did you know? You may be able to use the equity you’ve built in your home to lower the borrowing costs on your line of credit. Your financial advisor can help you decide if this is suitable for you.
Review your insurance coverage. Many employees are covered by group medical, dental, disability, and life insurance. When you leave your employer and strike out on your own, that coverage usually ends (unless you are covered under your spouse’s plan).
Speak to an insurance professional about home insurance for your business assets and disability insurance to protect you and your family should you suffer an illness that prevents you from running your business.
The more of these steps you can take in the early stages of your business, the better your chances for success. Your small business advisor can help ensure you are well prepared for your new venture.