Every week, I receive several inquiries from Manitobans looking to start a business. Most of the questions are the same; “How do I apply for a small business loan?” and “What documents do I need?” If you’re wondering about starting a business, and have questions, here are a few tips to think about.
Develop an “Elevator Pitch”
Be able to explain your business in 30 seconds or less. Most business owners are passionate about what they do. The successful ones can explain their business in a very short amount of time. Be clear and to the point. Not only will it keep you focused, it will help when talking to potential investors, suppliers and future customers.
Create a Business Plan
It’s not enough to just have passion. You need a plan. There are plenty of free resources to help you get started on building a proper business plan. Here’s a link to a free resource from the Government of Canada: Craft your business plan
Build a Budget
In the first year of operations, what will you need to purchase? What supplies will you need? What marketing materials? What services will you have to buy? The total of these costs and the timing of them will help determine the amount of money you need. As a good rule of thumb, expect to contribute at least half of the required funds personally (some exceptions apply such as the Canada Small Business Financing Program). If you don’t have enough money to cover half, then you may need to scale back your plans, seek partners, or find investors.
Build a Cash Flow Forecast
This is perhaps the trickiest part but is critical to determine if you’ll be able to afford the interest on your loan and eventually repay it. If you can’t figure this part out, talk to an accountant for advice and guidance.
This probably seems like a lot of work. And it is. But get ready to roll-up your sleeves. You’re starting a business!
If you have any questions about what it takes to start up a business, talk to me and my team at the ACU Business Financial Centre. We’re here to help.