Write a business plan

Technically, you can write a business plan any way you like, but there is a generally accepted template for business plans. Stick with this structure unless you have a compelling reason to change it.

This is because business plans are often shown to third parties. In particular, they’re often used when applying for investment or credit. Using the standard format ensures that third parties see what they expect to see. It also helps to ensure that you cover all the relevant points.

The standard format for a business plan is as follows:

• Executive summary

• Business description

• Organization and management structure

• Products or services

• Sales and marketing plans

• Market analysis

• Financial projections

• Funding requirements

• Appendix

All of these parts are important. Possibly, the single most important part is the executive summary. This is because it’s the section that is used to get the attention of third parties such as investors and lenders.

The executive summary generally follows a standard format:

• Introduction

• Business description

• Market analysis

• Products or services

• Financial information and projections

• Plans for the future

Putting all this together may sound like a lot of work, especially for a small business. In actual fact, it often is. However, the work is more than justified. Quite simply, it ensures that you only put in the effort to open a small business if it has at least a decent chance of success.

Make a marketing plan

As part of your business plan, you will have undertaken market research. This means you can give clear answers to the following questions:

• Who are your direct and indirect competitors?

• What are the competing products/services in your market?

• What trends and forces drive your market?

Have an idea of what assets you can potentially leverage. For example, do any other small businesses complement yours? If they do, it might be useful to open a communication channel with them. This can lay the ground for a very constructive working partnership.

Use the results of your market research to create a marketing plan. Start implementing this as soon as possible. Starting your marketing early maximizes the time you have to build up traction before actually opening your small business.

At a minimum, start your organic social media marketing. It takes time and effort to develop a presence on social media platforms. Ideally, set up a website too and start working on your SEO (search engine optimization).

Set up your business legally

Choose a legal structure for your small business before you open it (e.g. sole proprietorship or corporation). Then complete the associated paperwork to make your business completely legal.

You need to register for tax. Corporation tax is handled by the provinces/territories. If you need to collect and remit other taxes (e.g. GST/HST), register with the CRA.

If you know you will take on even one employee, you also need to register as an employer. Again, this means registering with the CRA.

Depending on the nature of your business, you may also need to get a business license for some or all of your activities. Business licenses tend to be handled at the municipal level.

Organize financing

Organizing your financing consists of two steps. Firstly, open a bank account for your small business. Secondly, look at how you are going to pay your way until your small business starts to earn a sufficient level of revenue.