Who exactly is an entrepreneur?

By Samantha Garner | December 7, 2019

what is an entrepreneur

What Is Entrepreneurship?

Entrepreneurship has been defined in various ways over the last several hundred years. The French word entreprendre, meaning “to undertake, to do something,” was in use as early as the 12th century. Three hundred years later the corresponding noun “entrepreneur” developed, and referred in English terms to a merchant or an adventurer.

Since the first formal use of the concept by economist Richard Cantillon in the early 1700s, entrepreneurship has meant many things to many different people.

Earlier definitions of entrepreneurship centre on innovation, or “new combinations of the factors of production” such as new products; new services; new methods of production; new markets; new sources of supply and new forms of organization.

Who Is An Entrepreneur?

In Canada, there are nearly 1.3 million registered businesses. Of those, 98% have fewer than 100 employees, 55% have fewer than five employees, and 75% of all businesses in Canada have fewer than ten employees. This means most of businesses in Canada are small – by a long shot. If you add the unregistered businesses and the self-employed people of Canada to the number, we have just under 5 million businesses and self-employed people. Cool, eh?

About one in six Canadians either work for themselves, or have started a business. Canadian entrepreneurs come in all shapes and sizes, ages, genders, backgrounds, and circumstances.

What this means is: you can become a successful entrepreneur. It takes hard work, determination, a good idea and a little luck along the way. And, of course, entrepreneurship training. On average, 150,000 new small businesses are created in Canada each year — but only 35% survive five years. But the good news is that, according to studies, entrepreneurs with education in entrepreneurship and previous entrepreneurship experience have an 80–90% chance of success with a new business.

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Most important accounting records for a small business in Canada

By Samantha Garner | November 30, 2019

As a Canadian entrepreneur, you must keep accurate financial records of all activities for your company for six years. Along with your financial statements (balance sheet, income statement, and cash flow forecast), you’re required to keep records for all the individual accounts that make up those statements.

What accounting records do I need to keep?

In Canada, the major accounting records that you must accurately keep are:

  • Accounts Receivable: Who owes you, how much do they owe, and for how long have they owed you?
  • Accounts Payable: Who do you owe, how much and for how long?
  • Inventory: How much did you buy; when did you buy; and how much did you pay? How you account for your inventory will affect your cost of goods sold.
  • Payroll: Total salaries paid to employees, payroll taxes and deductions.
  • GST/HST and Provincial Sales Tax: All businesses with an income greater than $30,000 per year are required to collect and submit on behalf of the federal government a goods and services tax (GST) and, depending where your business operates, provincial sales tax (PST) or harmonized sales tax (HST).
  • Cash: Cash inflows and outflows should be recorded to maintain proper control of cash.
  • Fixed Assets: What you bought, how much you paid, and when you bought, along with depreciation amounts.
  • Other Records: Such as insurance, leases, investments.

There’s lots of accounting software that’s easy to set up and use. You can ask your accountant for their advice on which program would be best for you and your business.

Keep in mind that, while software can be useful, outside accounting advice is important to small business success. Accountants see loads of businesses in different industries and can help you understand and manage the financial health of your company. They also remove some of your own stress and worry about overlooking important financial details. Win-win!

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How to figure out your small business’ start-up costs

By Samantha Garner | November 23, 2019

value proposition

As an entrepreneur getting ready to launch your business, you’ll need to get a good handle on your start-up costs.

Start-up costs are the one-time expenses you need to incur before you make your first sale. Start-up expenses are one-time capital (big money) expenses and monthly operating expenses. One-time capital costs might include purchase of initial inventory, purchase of equipment or furniture, improvements to your physical space, development of a website and deposits and fees.

How can you determine start-up costs?

The estimate of your start-up monthly operating expense depends on your guess of how long you’ll be operating your business without any money coming in the door. This is known as “Months to First Sale.” On average, it takes about six months to plan and start a small business, but it really depends on your industry. Also, start-up costs for a home-based service business are usually substantially less than a manufacturing business, for example.

What’s the best way to find out how long your Months to First Sale will be? In our opinion, it’s to ask a member of your industry, or someone who operates a business like yours.

How you decide to pay will influence your one-time start-up expenses. For example, if you need a $30,000 delivery van, you can buy it, which means you’ll need $30,000 in cash. You can also lease the van, which means borrowing money to pay for the vehicle and, therefore, a smaller initial amount of cash for the deposit or loan down payment. This lets you pay over time when your cash flow is likely to be stronger. However, you’ll always end up paying more in total because of interest expenses and built-in fees associated with leasing. Carefully consider your start-up needs!

Here’s an example estimate of a small flower shop’s monthly operating and one-time start-up costs:

Monthly operating costs: Monthly Months to first sale Estimated cost
Salary for the owners $5,000 3 $15,000
Rent $6,250 4 $25,000
Advertising $1,000 1 $1,000
Supplies (wire, ribbon, vases) $2,000 1 $2,000
Telephone/internet $100 2 $200
Insurance $550 4 $2,200
Utilities $300 4 $1,200
Miscellaneous $2,000 1 $2,000
TOTAL $48,600

Want to learn more about start-up expenses? Check out our 100 Essential Small Business SkillsTM program!

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Getting your small business ready for year-end 2019

By Samantha Garner | November 16, 2019

small business year end 2019 canada

It might not seem true, but we are nearing the end of the year (and the decade)! While you’re thinking of holidays and preparing for shorter days, you can also get your small business ready for year-end.

Getting your small business ready for year-end in 2019

(Some of these tips assume a December 31 fiscal year-end, but they still apply if you have a different year-end!)

  1. Organize your files files, records and receipts.
  2. Update your payroll records.
  3. Report all 2019 paycheques on T4 slips.
  4. Make sure all tax deductions are in order.
  5. Make any business purchases that would qualify for tax deductions for 2019.
  6. Create a to-do list for the first week of January and make appointments now with key advisors, especially your bookkeeper and accountant.
  7. Remove old contacts and update professional contacts.
  8. Update your personal productivity and technology tools – download updates and templates and make sure your current apps are still working for you. Even more fun – look for new ones! Check out some productivity apps you may find useful.
  9. Keep your important information safe by updating your passwords. Apps like LastPass or even Chrome’s and Safari’s built-in password managers can help.
  10. Check to see if any of your licenses or permits are up for renewal.
  11. Review your business plan. Did you meet your goals? Did you fall short? Take this time to think of new strategies based on what worked and what didn’t – or what changes in the business environment might necessitate a plan update.
  12. Review your small business’ marketing, human resources management, financing, and operations. Can you improve in those areas in 2020?
  13. If you have employees, prepare and give evaluations. Discuss expectations and performance, and listen to any concerns your employees may have.
  14. Plan for holiday time off, whether or not you have employees. If you do have employees, the earlier you get everything organized, the better.
  15. Enjoy the downtime! If your small business gets quieter at the end of the year, give yourself a well-deserved rest. You’ve earned it!

Have questions about any of these tasks? Ask a GoForth Expert. The answer to your question could help other Canadian entrepreneurs who may be wondering the same thing. How charitable of you – perfect for the holiday season!

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What makes a good marketing strategy?

By Samantha Garner | November 9, 2019

What's the best small business marketing strategy?

The 4Ps of marketing – Product, Price, Promotion, and Place – were classified by E. Jerome McCarthy, a marketing professor from Michigan State University, in 1960. But are the 4Ps still relevant and useful for small business owners?

What should your marketing focus on?

Product

Today, customers are rarely looking for just a product – they’re looking beyond the product itself, and to solutions. It’s no longer “If you build it, they will come.” Solutions deliver, products and services don’t.

Small businesses should focus on creating solutions or products and services that bring value to their customers and not only on features or functionalities. This value – the value proposition – forces companies to move beyond the basics and express the solution that customers really want.

Price

Price is still a major factor in a purchase, although it’s not the only one that makes a successful sale. As information becomes more and more accessible and transparent, there’s greater demand for value for money. Customers are often willing to pay a premium price for better service or faster delivery, because they consider it a value-added benefit that justifies the higher cost. Be careful of overpricing relative to the benefits of your product or service.

Promotion

Promoting a product has moved on from blasting potential customers with ads and bulletins. These days, it’s all about engaging and resonating with people. Promotion also expands well beyond the traditional marketing channels. Google introduced the term Zero Moment of Truth (ZMOT) that shows consumers research and engage with your company before they make a decision to purchase. This means you should be there at the micro-moments when the consumers need them the most.

However today’s customers are more media-savvy and ad-weary than ever before. This means that small companies must not only focus on the primary promotional methods, but also add digital marketing techniques and build relationships with customers and potential customers. You can do this by creating engaging content or campaigns on social media platforms, or even build an online community through forums.

Place

This category used to look at the locations and channels that were most appropriate for a potential customer to make a purchase. But now, every business competes in two worlds: a physical world (marketplace) and a digital world of information (e-commerce). We’re all connected and online, no matter where we are. Customers want ease of purchasing regardless of whether they are in a physical store or shopping online. Also, the introduction of e-commerce opens up sales opportunities worldwide, providing companies with more places to sell their products. The marketing landscape has changed dramatically thanks to e-commerce. Today’s small businesses must keep the digital space in mind when considering their marketing strategy.

Check out our GoForth Expert Rob Campbell’s advice on how to create a strong marketing plan.

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