BE YOUR OWN BOSS
Be your own boss. This was the mantra of my mentor back in college. He always reiterated the value of BEING THE BOSS in our classrooms. Sadly, not all of my classmates made it that far in the business world. I took his advice to heart and got started with a small business that involved buying and selling of college books to freshmen and sophomores. This took off quite a bit but I failed in a lot of steps. My mentor was kind enough to point out where I went wrong.
As a consultant, I found this question to be one of the most frequently asked: HOW MUCH DOES IT TAKE TO START A BUSINESS?
Most people would argue that you need a lot of money, but there are some businesses that don’t really require you to get a second mortgage just to fund your own business. Here is a short list of some business ideas and why they don’t need a lot of money.
- Local Moving company – this is a business that doesn’t require a lot of money because you only need to assemble a crew that can move, a small office space, a small truck, and some items necessary to carry huge furniture pieces. If shelling out for a truck is too much, you can also rent one. The reason why this was on the top of the list because I remember a cousin of mine who started his own moving company in Kitchener. His office was his garage and his crew was no more than 5 people. He started getting clients moving into new apartments or small houses. Now, he’s one of the most reliable moving companies in Kitchener.
- Local Driving schools and lessons – another business idea that needs not a lot of money to get started. All you need is a car and a good practicum for people who want to learn how to drive. You don’t need an office space unless you intend to hold a class for a lot of people but even if you do, it won’t cost you a lot of money to rent out a room.
Practical advice to move things forward
Supposing you’re interested in setting up your own moving company, what are the things that you need to do to turn this idea into a reality?
1.) SWOT – SWOT is short-hand for Strengths, Weaknesses, Opportunities, and Threats. A SWOT analysis needs to be done so you can identify the key aspects for your business and what needs to be done to enhance the strengths, remove the weakness, take the opportunities, and to eliminate threats.
2.) Consult – You can talk with a business consultant about how to proceed with your idea. They will help you get things started, but don’t bother if they end up charging a lot of money. My suggestion is to talk to friends who have their own businesses.
Some businesses don’t survive in their given industry not because they ran out of customers, but they never had control over their overhead expenses. They lost control to the point that their profit ended up paying for the overhead expenses, so they had no chance to increase their ability to turn a profit. The stocks remained stagnant and then declined steadily until it came to a point when they were no longer able to sustain the company. Most consultants and business experts would look at this situation as the inability to make a profit, but I see it as the inability to control overhead expenses.
What are within the realms of your overhead expenses?
You have your:
- Utility bills, which includes electricity, water, internet, Gas, and rent just to name a few
- Your payments for your stocks or products to the suppliers
When the title says SPEND LESS MONEY ON YOUR OVERHEAD EXPENSES, it refers to your utility bills. Losing control over your overhead expenses equates to not being able to control your utilities. You have faulty wirings, a leaking water heater (helpful resources) , and other utility problems that would drain your finances.
Supposing your finances look liked this. Your company earns $10,000 every month.
- $3000 goes to payroll for your 6 employees.
- $2000 goes to refilling your stocks and paying your suppliers
- $4000 goes to paying your utility bills
You now have $1000 a month in profit. Now, what if you were able to reduce your utility bills by 50%? You now have $2000 more to add to your $1000 profit. You can also use this money to give your employees a raise or to increase the number of stocks you have, so you earn more money. This allows you to increase your profit and then you can repeat the cycle. But all of this will be for naught if you are paying more for your utility bills than your payroll or stocks.
How does one reduce utility bills?
It boils down to two words – repair and replace. Leaking pipes on your water heater and plumbing fixtures, and faulty wirings should be repaired because they can be responsible for your increasing bills. A faulty wiring can cause your electric bills to shell out a few cents when it sparks. If it sparks a hundred times a day, that’s close to at least $10 to $50 a day. Multiply that by 30 days and you get $1500 on top of your usual electricity bill. The same goes to your leaking pipes attached to your water heater or plumbing fixtures. Getting them repaired should be your concern when you are dealing with leaks.
If repairs are not enough, you may want to replace the unit or outlet. You will end up spending more money on replacement, but it pays for itself in a few months.
All in all, your utility bills should always be held in control, just like the other aspects of y our overhead expenses. You can hire a maintenance person to help you monitor your appliances and office’s inner workings.
The phrase “no man is an island” applies to businesses because no business can stand on its own two feet without the help of other organizations and associations. The following organizations listed below are for Small/Medium business owners to call upon when they need financial assistance, information about managing their business, and funding that will help them contribute to the economic development of Canada.
So, what are these organizations?
ACOA – Atlantic Canada Opportunities Agency is an agency that works to create opportunities for economic growth by allowing businesses to become “competitive, innovative and productive, by working with diverse communities to develop and diversify local economies, and by championing the strengths of Atlantic Canada.” ACOA works on initiatives that will foster:
- Greater productivity
- Skill development
- The commercialization of innovative technologies
- Improved global competitiveness
ACOA will also help you start a business or expand it, as well as help you conduct research and development projects that will help boost the economy, and even help you do business abroad.
BDC – Business Development Bank of Canada is for entrepreneurs looking to seek financial assistance for their business. Entrepreneurs who are still starting up or undergoing the early growth phase of their business are eligible for their long term financing. They also provide consultation services that will fit a business owner’s budget. They have a team of specialists that will help you find solutions for your business. “BDC Consulting is ISO 9001:2008 certified for the design, development and provision of innovative consulting services for businesses.”
The Entrepreneur’s Forum or EF helps new and growing businesses find advisers to help them with their strategic planning. EF will use a traditional yet personal method that will connect business owner and adviser by setting them up to meet over coffee, lunch, or dinner. The advisers that do get to talk with business owners are frank and will not sugar-coat their opinion, advice, and input. They will go as far as to help you break into a new market or even to save your business.
The Department of Innovation, Business and Rural Development (IBRD) is an agency that supports regional development and economic diversification. They focus on “small and medium-sized enterprise development, industrial diversification, innovation, investment and economic intelligence”. They are keen on helping people start businesses or expand their current businesses.
There will always be people who will establish their own business even if they don’t have the technical or understanding of doing so. This doesn’t mean that they should first learn the basics of business administration, marketing, and other factors that could make or break their business. If you look at it from a wide-scale perspective, you’ll find that business owners with no expertise in the world of business have an equal fighting chance at success just as much as those who do (regardless if you have an MBA or PHD in business).
Strategy is the key to success for SMB and you will be hearing this word a lot. Strategic planning is done to ensure that your business is on the right path, or at least is trying to follow it with minimal effort.
How does one carry out a strategic planning for their SMB? For the sake of this article, let us use a laundry service as an example. You are the owner of a small laundry service located in a corner apartment downtown. Your location alone is part of a wide-scale strategic planning that helps drive customers to you, but let us get down to the inner workings.
First, you need to understand your strengths and weaknesses. This can be done via SWOT analysis. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. This is a straightforward model that allows you to visualize what your business can and cannot do. This can be done by gathering information via environmental analysis and then separating the external factors (opportunities and threats) from the internal ones (strengths and weaknesses). Why is this crucial? It allows you to see what your business is capable of doing from an objective point of view. For example, you can claim that you have your own brand of detergent that you mix as your strength and the expensive price is your weakness. However, you can sell it to your customers for added income (opportunities) but they may go for branded ones (threats). This process is that simple.
Once you’ve done your SWOT, go back to your MISSION-VISION. People underestimate the power of a mission-vision statement because they feel that it’s a useless body of text. Having a mission or vision of your business will allow you to establish a path of sorts that will help you succeed. As the owner of a laundry service, your mission is to clean clothes and your vision is to be the top laundry service in your area. Again, simple yet effective. This also allows you to focus on the things that need to be done to get from point A to B.
Lastly, invest in coaching and mentoring programs. Learning does not stop in the four walls of a classroom. Business owners need to be guided just as much as college students. I have met some of the most successful business owners in my city and they tell me that the path to success is to continue learning. When you invest in programs, seminars, or workshops that you think will help you run your business, you are guaranteeing your business’ success. For every program you undertake, you are one step ahead of any stagnant business owner.