Status Pending, Venturing into the world of business.

This is one post of what will likely be a few and to start this little blogging adventure. Lets kick this off with the foundation, the second most important part of kicking off that business. The first is likely deciding to do something and convincing yourself to go all in and make it a success.

Now the foundation is all of the little things that really aren’t that little. You need to look at incorporating, will you take on partners for this venture, insurance, paperwork and the day to day. If you get a good foundation in place from the beginning, it makes for smoother sailing down the road.

Kicking off with a couple of necessary evils. Incorporation and insurance. Minimize your exposure and cover your ass. Get a lawyer, call an insurance broker and get this in order, it is a valuable investment.

The business plan. Important to have a working plan going forward, something that will grow and change with the company. “Business plans” from the 90’s should largely be dead as they are immediately inaccurate as soon as you start writing. Have a sales and finance forecast (something you can work towards) and pull together a working plan, know what your doing, how your doing it and what will be the marker(s) for success.

Looking at finance, put the building blocks in place at the start and as the company grows the pains will be minimal. Take a look at a service like Wave out of Toronto, great product for small and medium sized companies right out of the gate. Accounting and payroll all in one at a price that doesn’t break the bank (free and for some service a minor charge). While a lot of people feel an excel sheet works in the beginning, it doesn’t work well once you hire, make sales or start spending money.

Onto partners. Are you going at this alone with the idea of hiring down the road or are you looking to bring on partners/co founders to make the dream a reality? Alone you only have your self to blame if things go wrong. With partners or co founders you want to minimize the possibility of things going wrong.  Agreements are key (founders agreements etc) and anything involving finance should be signed off on by at least two of the co founders/partners (or even a CFO and founder). From personal experience you want to close all of the gaps you can, ensuring you have checks and balances in place. Things go wrong and it happens all of the time, you just want to minimize the possibility (it can ruin a company and in some cases friendships).

That is about it for now. Have questions, comments or something to add to this, let me know. I’m easy enough to find on the internet.

Next blog post. Still thinking about it ….

 

 

Comments
  1. Darrin Searancke

    Well said, Robert. Obviously a lot to consider before moving forward and always a good idea to be aware of potential pitfalls. Can you always anticipate growth? Incorporation seems like a bit of a jump for a smaller business.

    • Robert

      Anticipating growth, its more about setting the target and pushing yourself to achieve the numbers. As for incorporation, only in Canada is it an over priced exercise. Other than that “A primary advantage to incorporating a business is the limited liability conferred upon its shareholders”.

  2. Firepuncher

    Good post. As far as incorporation goes, I have done a few of both and am unincorporated now but suspect that will change in a year or two for tax reasons. In my experience it depends on the type and size of business, I stand to be challenged on this btw guys. One consideration is obviously the ability to limit personal financial liability of directors. However again depending on the type of business this is not always possible. For example if you are starting a retail business and are in need of financing of assets or inventory, incorporation will not usually help limit personal financial exposure because most banks and suppliers will demand a personal guarantee of credit extended to the business. If you are starting a service business, this is where incorporating is critical, obviously there is usually need of liability insurance but failing that or claims beyond insurance coverage incorporation will at least protect you personally from actions by your company in most instances.

    I also agree that the cost of incorporating here is ridiculous, the next time I am going to look closer at self incorporation as an exercise at least.

    Lets continue this over caffe say Java Blend tomorrowÉ

    S

Leave a Reply

Your email address will not be published. Required fields are marked *