Table of Contents
From Dollar One — Chapter 4: Start Up and Scale Up
Start Up and Scale Up
Running a business isn’t an easy job. It’s not even just one job. Being an entrepreneur means wearing multiple hats at once. You’re the founder and CEO, and you’re also the accountant, the marketer and social media manager, the sales director and more.
How can you build your business in a way that avoids spreading yourself too thin, which can prevent your ability to grow?
In this chapter, we’ll talk about how to set your business up for success from the outset, with sections on how to:
1.Set up your business
2.Make a plan
3.Find customers and make your first sale
4.Make it scalable — and get ready to grow
Phase 1: Set up your business
Before you get ahead of yourself, it’s important to establish your business as an entity separate from yourself. Get the necessary steps out of the way early, while you’re not busy dealing with customers and orders — and paperwork. You’ll be glad you did later.
Below are a few of the steps you’ll want to take as you get your business up on its feet. (For our purposes, we’ll assume you’ve already established your idea and have at least a rough idea of what your business is going to do.) And note that there’s a free downloadable version of this list at the end of this section to help you get started.
Registering your business
Here, the Government of Canada walks you through the process of registering your business. Note that if you’re a one-person show, the easiest option is to register as a sole proprietorship — it’s the most common choice for startup entrepreneurs who are eager just to get going with their business. (You can add investors/shareholders and/or incorporate later, ideally with the help of an expert.)
Does your business have a name? As a sole proprietor you can simply do business under your own name if you want. But if you’ve thought of something catchy, find out whether it’s available for you to claim it.
The easiest way to rule out your name choice is to search the internet to see if another business is already using it. If you can’t find a business with the name you want, great. Now to make sure no one’s registered it in Canada: You can use the links from Innovation, Science and Economic Development Canada to check a database of corporate names, as well as the business registries of the federal government and certain provinces.
Getting set up to collect sales tax
As a small business making sales, you may have to collect sales tax and remit the funds to the government.
As part of the federal business registration process we linked to in the previous section, you’ll get a business number, which you can then use to register for GST/HST remittances. But you only have to charge GST/HST if you earn above a certain threshold: If your business earns less than $30,000 over four consecutive calendar quarters, you’re considered a “small supplier,” and collecting and remitting GST/HST is voluntary — learn more about GST/HST for small businesses here.
Are you doing business from British Columbia, Saskatchewan, Manitoba or Quebec? If so, you’ll also have to get set up to collect provincial sales tax. Follow the links to get started.
Collecting and remitting sales taxes may sound daunting, but the government websites make it clear what you’re supposed to do, and it’s actually easy once you get into the routine. Just don’t forget to add sales tax to your invoices!
When you’re accessing some government services, such as the Canada Revenue Agency, you can use Interac sign-in service to make signing in more convenient. Choose “Option 1 — Using one of our Sign-In Partners.” By choosing Interac sign-in service, you don’t need to remember a different username and password for each site. Instead, you can use your existing login credentials with a participating financial institution, as a convenient and secure way to log in.
Licences
Depending on what kind of business you’re starting (and what province or territory you’re working in), you may need to have one or more licences to run your business. This online tool can help you figure out what you need.
Banking and finance
Remember when we said that entrepreneurs and business owners wear several hats? In the early stages of your business, you’re probably going to be acting as your own accountant.
One of your first tasks should be opening a separate bank account for your business. This is where you’ll deposit your earnings, and you’ll use it to pay out your expenses. You don’t want to be tempted to spend your business income on non-business things, do you? Definitely not, but the real reason to maintain separate accounts is to capitalize on these advantages:
- Having separate accounts makes it easier to get an accurate picture of the cash flow for your business, including which funds you’re using to support and grow it.
- It helps you track your expenditures, without having to take the time to figure out if an expense was personal or business.
- Your income and expenses are going in and out of the same account, which makes it easier to confirm the amounts during tax time.
- You can use your past months’ records to help forecast future cash flow.
- If you handle your Interac e-Transfer transactions through your business account, you’ll have the info in one place, which makes it easier to keep track.
(At last!) making sales
Finally, the all-important actually making money part of having a business.
An easy way to start selling in-person is to accept payments right on your phone without the need for expensive or large point-of-sale (POS) systems. These solutions make it easy to sell your goods and services at a craft fair, a farmers’ market, or even a client’s house. There are a few ways to do so.
The first is to use an accessory that will allow you to accept tap or chip-and-PIN payments on your phone or tablet. You may see this described as a SPoC, or a Software-Based Pin on Cots solution. This is a great option if you have a range of payment totals, which may sometimes exceed tap limits.
Meanwhile, if your business mostly or only accepts payments that fall under the tap limit, you may want to consider Tap to Pay on iPhone or Tap to Pay on Android. These solutions enable you to accept all types of in-person contactless payments with only an iPhone or Android device — no extra terminal or hardware needed. It’s a secure, easy to use solution that lowers the barriers to accepting payments in more places. Plus, Interac Debit is a low-cost payment option for your business. Learn more about Tap to Pay on iPhone and Tap to Pay on Android.
There may be times when Interac e-Transfer is the right solution for accepting customer payments — for a larger-ticket transaction when you’d otherwise use a cheque, or if someone isn’t carrying their debit card, for example. With Interac e-Transfer, money will be deposited into your account automatically, so you don’t have to wait for a cheque to clear. Much better for your cashflow.
Pro Tip
When it comes to business-to-business transactions, ask to be paid using Interac e-Transfer whenever you can. That way, you’ll get paid fast — instead of having to wait, as you would with a cheque or EFT (Electronic Funds Transfer). Plus, with Interac e-Transfer, you’ll have an electronic record of your transactions — which makes it easy to keep track of money going in and out of your accounts.
Ready to launch your idea into the world? Give your business a solid foundation by starting with a plan. Download this Small Business Plan Starter Exercise and follow the steps — it’s a totally free tool to help you write up a business plan that could help your idea achieve liftoff.
FREE STARTER EXERCISE
Download our Small Business Plan Starter Exercise— a free tool to help you write up a business plan.
Download exercise to get started
One more step? Seeing if you can get help financing your business
How will you finance your business, beyond your own savings? Businesses based in Canada may be eligible for a number of different grant and loan programs.
Grants are money that’s given to you to grow your business and you don’t have to pay it back. Loans are, well, loans. You’ll have to pay them back based on the agreed terms and conditions.
Innovation, Science and Economic Development Canada gives you information on available financing programs for Canadian small businesses.
Pro Tip
When you’re accessing government services, look for opportunities to streamline sign in with Interac sign-in service. It’s a convenient way to access select online services because it enables you to use credentials you already trust to log in with your participating financial institution, instead of creating and managing a new username and password for each site you interact with online. Your details are not shared with the government, other partners, or Interac — they’re just between you and your financial institution.
Phase 2: Make a plan
Now that your business is up and running, it’s time to turn your attention to where it’s going.
Experts often advise entrepreneurs to have a five-year plan for their businesses. Five years seems like a long time, but it’s better to have a plan early than to scramble and react if things scale up faster than you expect (a great problem to have!).
Your five-year-plan should include:
- An executive summary that outlines the challenges you face, and solutions to help grow your business.
- The goals you’re setting out to achieve during this time. This includes sales targets, new hires, research and development, new products, whether you plan on borrowing more money, or if you plan on taking on a business partner.
- Your marketing plan. How are you planning on accomplishing this plan? (e.g. Will you need to hire an outside agency? Will you run an ad campaign?)
- A SWOT analysis — this lays out your business’s strengths, weaknesses, opportunities and threats.
- An analysis of your industry that includes customer segments, popular products, pricing, future growth opportunities and whether there are new avenues to explore when developing products and services.
- Your business metrics. How do you plan to measure success? This can include sales, revenue, profits, and meeting other specific measures or launching and achieving specific initiatives.
And don’t worry, having a plan doesn’t mean your hands are tied as your situation evolves. Your plans are living documents, so revisit them regularly and update them with new information as it becomes available.
In the meantime, you can stay on track and keep your eyes on the prize by setting periodic goals along the way.
Phase 3: Find customers and make your first sale
So you’ve officially launched your business. Congratulations!
Now to land your first customers — and your first sales. How are you going to do it? By drawing attention to yourself. That’s where marketing comes in.
A 2019 BDC survey found that Canadian small businesses spend an average of $30,000 on marketing. But when you’re starting out, you probably won’t have a marketing budget anywhere near that. Instead, you’ll likely be among the 30 per cent of small businesses that have a marketing budget of less than $5,000.
How do you make the most of limited resources for getting your name out there? Here are some tips:
Make yourself easy to find online
One of the best ways to make sure your potential customers can find you is to have a website that briefly explains what you do and how to contact you.
Not a web designer? No problem. Entrepreneurs on a limited budget can opt for a DIY solution. Make-your-own-website services like Wix and Squarespace are designed to be easy for a non-expert to use.
Online directories are another way for customers to find you — directories of local businesses, for example, and/or Yelp, 411.ca and the Yellow Pages. Some services offer business listings for free.
Experiment with social media
Maintaining a social media presence is time-consuming and requires media savvy. It works best if you bring a diverse toolkit of technical skills to the task, like rudimentary video editing and the ability to understand an analytics report.
You have to decide how much time and energy makes sense for you to invest in a social media presence. If you sell direct to consumers, a social media presence helps put a friendly face to your business.
On the other hand, if you cater mainly to other businesses, you probably won’t find too many customers through most social media platforms. LinkedIn is the big potential exception — people expect to see business-to-business content there and may respond to it if it’s relevant to them.
Attend events — see and be seen
Meeting face to face is as important as finding customers online. Look for opportunities to make connections and meet potential customers in your area.
For example, if your business sells comic books, try getting a sales booth or table at a local comics festival. (And of course you might make some sales — don’t forget to bring your phone to take payment!)
Getting marketing help
You’re an expert in your own product, but no one’s an expert in everything. You can hire a professional designer, social media consultant or SEO consultant to help you grow and enhance your online and social media presence.
Paying your vendors with Interac e-Transfer means no fussing around with paper invoices and waiting for cheques or Electronic Funds Transfer (EFT) payments to clear. Plus, with its bank-grade security features, Interac e-Transfer can help keep your payments secure.
Phase 4: Make it scalable — and get ready for growth
Getting ready to scale means making sure you have processes that can scale with you. As your business grows, so does the need for processes and tools that can help you adapt to your customers’ needs.
What kinds of processes are we talking about here? The four types of business processes are operational, management, support and strategic. You may not have all of them in place right now, so start by identifying the processes you do have, and how you can make them more efficient.
Here’s how to assess your processes, in two steps:
- Create a list of tasks and processes you use as you’re running your business (examples could include: how you process customer purchases, invoicing, accounting and taxes, shipping label creation, and vendor payments).
- For each process, look for ways to simplify it so that it won’t take too much time as your business grows.
Let’s take customer purchases, for example. If your business involves selling to the public, a cash-only payment policy isn’t very scalable — think of the amount of time you’d have to spend counting and sorting it (assuming you’re not losing customers who don’t carry cash), plus trips to the bank, if your business grew to twice its current revenue — or 10 times.
Interac and your small business payments toolkit
Interac Debit is a better fit than cash for your retail payment processes because it continues to deliver benefits to your business as it grows. It offers low fees that stay low per transaction, no matter how big you get. And its quick checkout speeds mean you’ll keep up with growing lineups at busy sales locations.
If your business involves services or bigger-ticket transactions, it’s possible you’re finding yourself dealing with cheques, which (like cash) present problems as you scale. (How easy would it be to manage your cash flow if you weren’t always waiting for dozens of customer cheques to clear at the same time?)
Why not use Interac e-Transfer instead? It’s another example of a tool that grows with you. As your business expands, you can take advantage of the enhanced features of Interac e-Transfer for Business, which lets you send and receive up to $25,000 per transaction to vendors and customers and is available through most major financial institutions in Canada. The funds move from account to account in near-real time, which makes it easier to manage your cash flow versus cheques (which can take up to a week or more to clear), or Electronic Funds Transfers (EFTs), which can take days.
As well, Interac e-Transfer for Business offers a rich remittance data feature that allows you to reconcile transactions with less paperwork and streamline your records. You may not need that feature now, but it means your transactions can include data like invoice numbers and customer account numbers, which can help you streamline back-office processes by integrating with your accounting software. This can help you avoid time-consuming manual reconciliation processes and be a big help at tax time. Again, your business might not be big enough to worry about that yet. But maybe with a little luck and a lot of hard work …
Interac helps you reach your business milestones
* Sending limits will vary by participating financial institution and accounts within each participant.
Looking ahead
Where will your business take you next? That’s up to you.
The important thing, as you’re starting up and growing, is to make choices that set you up for success — and put you on the path toward more and more milestones. And as you’re getting set to grow, check out the next chapter of From Dollar One, which gives entrepreneurs tips on tools and strategies for growth.
More resources: Support for your small business
- Mindfulness & Money is a community-led program, sponsored by Interac and designed to educate and inspire small business owners in the new economy, including supporting them as they grow their businesses ethically
- If you’re a Black entrepreneur, you may want to be included in a listing map that allows Canadians to find and support more than 8,000 Black-owned businesses across Canada, from Federation of African Canadian Economics (FACE) in collaboration with Interac
- The Canadian Federation of Independent Business (CFIB) is Canada’s largest non-profit organization dedicated to small businesses. Members have access to tools and resources, discounts on essential services and more.
This article offers general information only and is not intended as financial, legal or other professional advice. While information presented is believed to be factual and current, its accuracy is not guaranteed and it should not be regarded as a complete analysis of the subject matter discussed. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Interac Corp.
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