Smart planning is crucial to the success of small business, says Roger Houle, assistant vice-president of commercial banking at Valley First Credit Union.
Making up more than 47 per cent of all companies in the Southern Interior, small business is a key economic driver in the region. Houle says that while there is a certain allure to being your own boss, creating success relies on more than just a good idea.
“I’m sure many of us dream about calling the shots on our own work,” said Houle. “Unfortunately, starting a business is more complex than having a good idea. There are many unforeseen challenges that can sidetrack and derail an entrepreneur long before sales begin to roll in.”
With more than 30 per cent of start-ups failing after the first year, Houle said the keys to success lie in the preparation, in particular creating a business plan, unearthing hidden costs and securing financing.
“After you decide to start your own business, the first step is to create a business plan. Your plan should detail elements such as target market and competition, product or service price, marketing strategies, costs for starting your business and cash flow projections.
“It’s equally important to determine what you will be measuring the success of your business along the way so you know whether you’re meeting your goals.”
By completing a business plan, a new business owner will likely discover things that they did not think about initially, allowing them to fully grasp the extent of what is required to start a successful business.
“It’s like building a house; you need to have all the permits, plans and designs in place before you even break ground,” said Houle.
Understanding your capital requirements is another vital element to success, added Houle.
“It seems like a straight-forward concept, but this is where many great start-ups fall short,” said Houle. “Whether it’s through a bank loan, personal resources or investors, knowing how you are going to pay the bills is as important as what you plan to sell.”