Starting Your Start-Up - Things You Must Consider
It seems so simple...
1) Think of an idea the world will love;
2) Start a company;
3) Get rich.
Or maybe you get bought out first, then get rich.
The sad reality is that most start-ups fail within their first few years of operations. So before you dive head first into setting your idea in motion and completely exhaust your life savings, here are some things to consider:
1. Speak to a Lawyer
If you’re a big dreamer and have a legitimate idea, you want to ensure that your company is set up right. Speak to a lawyer, preferably one that has experience with start-up companies, to ensure that they set up your company the right away. Since you may require investments from third parties, good lawyers will walk you through your options (i.e. types of shares, share classes, corporate structure) and recommend the optimal way to set up your company.
Our Favourites: Allan Oziel & John Wires
2. Get Funded
Unless you’ve built up a nice bankroll or have some rich family and friends, sooner or later you will need some CASH. Start thinking about how you can pitch family, friends and external investors. Get your idea and plans in order, create a business plan and most importantly, be passionate. If you receive some resistance, try to get some feedback and try again. You also have the option of adding your idea to a crowdfunding site - usually the market will speak for itself.
Our Favourites: Seedups Canada & Kickstarter Canada
3. Get The Word Out
You and your idea will need some exposure. Get a logo and website created, sign up to all of the social media sites, attend meet-ups and bottom line - Hustle!
Our Favourites: Hootsuite & Meetups
4. Know Your Numbers
Pick an accountant that is a good fit for your business; one that knows their tax and compliance rules, has dealt with start-up companies before, and one you get along with. Establish a great relationship and be in touch often.
It is important to know where you stand on a frequent basis so that you can plan ahead. Very often we see and hear about businesses meeting their accountant once a year and having no idea how well or poorly they are performing until it’s much too late. We don’t roll like that!
Speak to a forward-thinking accountant and move your numbers to the cloud. Many cloud accounting platforms utilize bank feeds and receipt-management tools, allowing for real-time information and ease of use. We utilize all of these tools at our firm because we truly believe in it.
Our Favourites: ConnectCPA (us of course!), Xero, Wave Apps, Quickbooks Online & Receipt-Bank
5. Manage Costs
Cost management is integral in every business, but more-so in a start-up. In the early days, when revenue figures may be low or even zero, you will need to keep your expenses in check in order to survive. By knowing your numbers (refer to above), you will have a good handle of where you’re spending too much (food) and where you’re not spending enough (advertising). Decide what’s important and what’s not and comparison shop as much as you can. That being said, if something is important, you always get what you pay for, so think twice before going for the cheaper alternative.
Our Favourites: Regus, Office Space in Toronto, 99designs & Elance
Some Final Words
As a business owner, you will be wearing many different hats - you’ll be the marketing person, finance department, and developer - and many times, all in one day. Establish relationships with lawyers, accountants and others in your space to leverage off their resources. Don’t be afraid to reach out to your competitors who are at the same stage you are at or who have been there before - you can all share in each other’s wisdom and experiences - providing each other with new perspectives. Most importantly, be passionate about your idea because if you don’t believe in it, nobody else will!
