The job market is always changing. Some fields of employment are more at risk than others, and many Canadians faced job loss in 2020. This can leave many people uncertain and feeling like they don’t have control over their own work.
More Canadians are turning to entrepreneurship than ever. With the gig economy booming and increased funding and grants for small business owners, self employment is looking more favourable.
The first question potential entrepreneurs may ask themselves is, “Can I do this?” It’s a wise question to ask because not only is the process of starting a business challenging, it takes a lot of savvy and intensive work. Not knowing what you’re in for can lead to failure and no one wants that.
So, is it easy to start a business? Parts of it are while other parts are more complicated.
Is starting a business easy?
While starting a business in a struggling economy presents a whole set of challenges, it’s not impossible. If you have a vision, passion, and drive, starting a business might just be a wise decision. But you also need resources and to understand what you’re up against before you start. That shouldn’t be a deterrent, but rather, knowing and preparing yourself is much better than going in blind and failing. Failure can be costly but is also part of the process.
Here are a few things to consider before starting a business.
Starting a business is challenging
How hard is it to open a business? First, the process of starting a business is challenging. There is no other way to put it. It can be emotionally, physically, and financially draining. On top of that, new businesses are more likely to fail than already established ones. But there are steps you can take to help navigate some of that challenge and set yourself up for success, no matter how bumpy the road may get.
1. A business plan is a non-negotiable (almost)
A business plan is like the ace up an entrepreneur’s sleeve. It’s a navigation tool, a milestone tool, and a way to forecast for your business so you can plan ahead and break down those milestones into measurable goals.
One of the features of a business plan is a built-in contingency plan. Predicting the future is an educated guess at best, but it doesn’t have to be defined blindly. Part of forecasting means building in a plan B. It takes into account economic fluctuations, market changes, customer behaviour changes, and even demographics.
Read more about why you need a business plan.
2. Collect resources
In the process of starting your company, resources can be anything from market analyses, products and services, to information on what business bank account is best for you. If you’ve already started your business and are in the very early stages, you might want to consider business loans, grants, or other business funding options.
Every industry has its own market reports. Even in specialized industries, there will always be reports on your niche. Pay attention to the market fluctuations and watch colleagues and competitors in the same industry. How are they going about marketing their products and services, and how successful are they? Is the market saturated or are there large competitors with your business idea that take the lion’s share of the industry?
3. Register your business
Even at an early stage, registering your business can be beneficial. There are two general ways that entrepreneurs choose to register their businesses: sole proprietorship or incorporation.
A sole proprietorship is not a legal entity like an incorporated business is. It is made up of one business owner. For tax purposes, a sole proprietorship is the simplest way to run a startup in Canada, and business taxes are filed as the business owner’s personal taxes.
An incorporated business is more complex than a sole proprietorship and is not as common among new entrepreneurs and small businesses, although there are some benefits for entrepreneurs to register their business as a corporation. A corporation is a legal entity separate from its owners, and therefore, the owners have limited liability.
Registering your business can be a bit cumbersome, particularly if you’re doing so as a corporation. Legal fees can mount and the time spent with paperwork is time spent away from getting your business up and running. That’s why a lot of entrepreneurs turn to Ownr to help them register or incorporate their businesses.
Be careful of side hustle burnout
There’s no way around it; starting a business is stressful. It’s an exciting time, but it’s important to continually gauge your stress. This process is a marathon, not a race.
Many founders don’t transition into becoming full-time entrepreneurs until their company is viable enough for them to devote all of their time to it. This can be stressful, leading to long hours and sleepless nights. The pressure boils over, causing side hustle burnout which can spill over into your personal life.
Burnout isn’t just detrimental to your budding startup, but it’s harmful to your health. As a new founder, there are some strategies you can employ to help mitigate burnout. Of course, there will always be stress, but that doesn’t mean it’s not in your control.
Pacing yourself is paramount. Remember your business plans? You’ve already set out your goals and reasonable timelines. Set yourself a schedule and make sure you give yourself some rest time in there. As you work your way through your tasks, frequently refer to your business plan and adjust whatever timelines or goals need adjusting.
On a day-to-day basis, you’ll likely underestimate the time it will take you to do something. Consider using a time tracker tool or strategies like calendar blocking and the Pomodoro Technique so that you’re aware of how long you’ll need in the future.
Watch for red flags
If you are becoming burnt out, there will be warning signs, and learning to spot them early can save your business and your health. Behaviours like waning motivation, inability to stop working, and struggling with support can signal that the stress might be mounting.
Settling realistic and achievable goals at the outset helps with waning motivation because you gain a sense of accomplishment when you achieve them. Make sure to check in with your goals and adjust if necessary. And as hard as it may be, don’t beat yourself up if something isn’t going exactly how you envisioned.
Starting a business can be tough. Finding a support network of people who are entrepreneurs can make a huge difference. As you network, you’ll find other like-minded peers who can help keep you motivated and who understand the stress involved in starting a business. And believe it or not, they’re probably feeling the same way you are.
You may face more financial risk
Starting a business costs money and for many founders, the capital to get off the ground is from their own pockets. This can be financially straining and people often seek out other forms of funding, like grants, credit, and loans to help bring their idea to life.
As mentioned before, there are certain financial liabilities that entrepreneurs are exposed to. Sole proprietorships-—a business that is owned by one individual—are not legal entities. All income is declared by the owner on their personal tax returns. Responsibility for debt payments rests squarely on the owner’s shoulders and as the business starts to earn larger profits, the taxes can grow hefty.
Some business owners make the decision to incorporate their businesses to limit their personal financial liability and keep their personal taxes separate from the business. A corporation is a separate legal entity and therefore, financial liability rests with the company, not the owner.
A financial plan, which is a component of a business plan, can help guard against financial difficulties. Financial planning takes stock of your expenses, income, loans, and lines of credit, plans for dry periods, and even things like health coverage, sick days, and time off.
There will be lifestyle changes
Entrepreneurship isn’t for everyone, but for those who adapt to the lifestyle changes required to run their own business, the rewards can pay off. Those lifestyle changes might be daunting, but going in knowing what to expect will help set you up for success.
Your workdays will change
Time spent working as an entrepreneur is vastly different than in traditional employment. This is both a good and a challenging thing. As your own boss, you aren’t necessarily beholden to any supervisor on a daily basis, and you can be far more flexible with your time.
Conversely, and particularly when starting a business, there are little to no bookends to your day. Hours will be long and days off in short supply. This is where business plans come in handy. Having those attainable goals can ensure you are on the right track and will be able to hire people to help grow your business so you can have a moment’s rest!
For those who struggle with self-discipline, starting a business can be challenging. Learning to hold yourself accountable for tasks and achieving goals is paramount in running a business. While you are your own boss, you are responsible for your business’s success and therefore, are responsible for all the cogs in the wheel that make up your business.
Learn to be resourceful
It’s guaranteed that you will face challenges. To overcome these challenges, learn to be resourceful. Do your research on your niche market and reach out to your business community. You don’t want to be spinning your wheels trying to make something work that simply isn’t.
This also applies to your life outside of your business. Carving time for yourself is part of learning to be resourceful. If you are more efficient with your business dealings, you likely won’t be spending as much time working.
Learning to be resourceful also means learning how to ask for help. Whether this is for your mental health and stress levels, or learning to do something like filing taxes or bookkeeping, asking for help can save you time, money, and energy.
Dealing with business uncertainty
When starting a business, uncertainty is inevitable. Dealing with this is a matter of managing how this uncertainty impacts you and your health. Starting a business can be an anxiety-inducing experience, but doing your research and having a plan can help mitigate those feelings of anxiety.
Dealing with uncertainty also means learning from your mistakes — and there will definitely be some mistakes. That’s just part of the learning curve! Remember, you can’t forecast for everything and plans are never set in stone. Be flexible and always have a backup plan.