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Patrice Bernard, Vice President, Operations Support and Strategic Initiatives

Patrice Bernard is Vice President, Operations Support and Strategic Initiatives and has been with BDC since 1990. His main responsibilities include participation in corporate planning, establishment of field budgets and performance reviews as well as ongoing review of processes, norms and financing solutions. He is also responsible for BDC's client contact centre. Patrice holds a Bachelor degree in Finance from Université du Québec à Montréal (UQAM) and spent most of his career in field positions in Montreal and Eastern Quebec.

This week, BDC is launching its 2006 Young Entrepreneur Awards campaign — the search for top young entrepreneurs from across the country has begun. This week's expert shares advice for young (and not so young) entrepreneurs who are thinking of starting up.

Starting your own business can be equally exciting and rewarding. However when you're starting up a company in today's competitive market, you should be prepared for some obstacles along the way. And we all know today's economic reality — with its fluctuating Canadian dollar and unexpected events — is a challenging one. To make it in business, you have to be ready with a well-defined plan that provides direction and enables you to live through tougher times. Entrepreneurs should be mentally ready to run their own business as previous management experience does not always prepare you for what's ahead.

Information is the key to success The most successful businesses are run by people who know their sector well. Industry experience enables you to avoid mistakes that newcomers inevitably make in areas such as product distribution, marketing or HR strategies. Relying on your network is also a good idea. For entrepreneurs who attempt to tackle a totally new business, they should make sure to arm themselves with information first.

Get the help you need Building a network of professionals such as bankers, lawyers, accountants and experienced consultants who can help you out is a good first step. Many people looking to launch a new venture may lack basic skills such as doing a proper cash flow projection or handling accounts receivable. The rule should be that if you can't do or learn it yourself, get somebody in who can. External consultants can offer management coaching that helps entrepreneurs deal with rapid growth, new markets, exports and start-ups. Essentially, coaches can help business start-ups review their business strengths and weaknesses and identify strategies to fill gaps. It's also wise to get an external point of view on key areas such as finance, sales, marketing, operations and human resources.

Prepare a well-structured and realistic business plan Having a great business idea is not enough. Begin with getting a clear business plan on paper, which will help you assess your potential, confirm your commitment to becoming an entrepreneur and win the confidence of bankers and investors. Many entrepreneurs think a good business plan is a voluminous document. However, in reality, as long as the plan is precise, clear and sound, a banker will consider reviewing it. One of the key factors to success is to be realistic when it comes to projections. Entrepreneurs are better off showing less optimistic scenarios, demonstrate how they'll perform and consider the various risks that they may face. You should keep in mind that your business plan is prepared for you — not for your banker — and it will serve as a roadmap to your project.

Form alliances Strategic alliances help entrepreneurs diminish their vulnerability when they first start businesses. This way, you end up sharing your gains and your losses. Business owners can consider teaming up with other companies that can help them enter new markets with new products and services, get better prices through bulk purchasing or accelerate research and development by sharing costs and resources. For example, a furniture design company could partner with a manufacturer for the production of its designs. Focus on what you do best and rely on other companies to offer complementary services.

Establish clear HR strategies Recruiting and retaining the right people is a challenge for start-ups as they may lack the financial resources to pay high salaries. Add to that the departure of baby boomers and the lag in education, which has created a shortage of qualified candidates. A start-up should focus on ways to market the company in order to attract the right people and build presence in the public eye through focused advertising, job fairs, industry association activity and community involvement. In the initial stages of building your company, always keep a hands-on participation. However, make sure your involvement in every aspect of the enterprise is balanced with proper delegation or team support, and that employees' skills complement your own strengths and background. To retain employees, business owners should make sure that their benefits are competitive and that they can offer employees an environment where they can grow personally and professionally. For example, a business could offer key employees shares as a motivator to grow with the company.

Capitalize your business fully Getting financing for a start-up is already a challenging task since you have to prove your worth and good credit to bankers. But many entrepreneurs also tend to "under-finance" because they have poorly assessed their entire range of needs. You need to take every expense into consideration — from the cost of equipment and hiring to how you'll have the necessary working capital to finance gaps between sending out your bills and actually getting paid. A difficult task will be to evaluate how long it will take to bring the company to a profitable stage, and the investment required in commercialization. Those aspects are important as they will directly affect your working capital needs. Proper financing is key to the project's success, and entrepreneurs should consider starting with a smaller business that they will grow rather than starting big with inadequate financing.

For more information and tips on starting up a business, visit BCC's website.