Small Businesses – the heart and soul of growth in Canada
According to an Industry Canada/Statistics Canada study from 2011, small businesses make up 98% of all companies with employees in Canada (2 to 100 employees). Also included in that study was information that 48% of the working population is employed by a small business! Clearly, without the entrepreneurial spirit, Canada who be a very different – and much poorer – place in which to live and enjoy life.
There is no room in this article to chronicle each step required in starting a business, growing it, maturing it and then at some point, transitioning it to new owners and enjoying our chosen retirement lifestyle. Instead, I am going to focus on just one key issue – developing a market for your product or service.
Your market – is there one? It is interesting to see some businesses grow very rapidly while others struggle and fail – the reasons for failure are many – lack of expertise, poorly capitalised and lack of market knowledge are three of the most common reasons cited for new business failures. There is no point making a product or trying to sell a service if no one feels the need for that product or service – regardless of how much you may believe it is critical to the world! Even if the public recognises it is something they need, are there other alternatives already in place that would be direct competition to you and your business? What about your version of the product or service is going to be so different that consumers will abandon the alternatives and purchase yours? The "build a better mousetrap and "approach to business planning – not! Is there really a need for a better mousetrap anymore?
Reviewing the reasons for business failures is never fun. A large portion of failures comes back to the original Business Plan. Bankers or other investors are going to ask for this document and are going to expect it to be complete in every respect – a key component of which is market positioning and analysis. This reviews the current market, what deficiencies may exist with quality or service or market depth or the product, what are the opportunities for growth or expansion, current competitors, threats to the market (from any source) and other obstacles that have to be considered. Think of going on the current TV hit show "Dragon's Den". You only have 15 minutes or so to make your entire pitch to these potential backers – and you have to get it 100% right the first time – and the first question asked in all cases is "where/who is your market?". The follow-up is usually some variation of "what makes your product/service so different" or "what is the value to the market?"
Before leaping into any business venture – either one of your own or with someone else, take the time to do a proper business plan. You will save yourself and your family a lot of grief and worry – here is a link that you will find useful – you can use your favourite search engine to find hundreds of sites and even software (for very modest prices) that can help you. Believe me, it is worth it!
To arrange a free consultation call MONEY® at 416-360-0000.