The face of Canadian entrepreneurship continues to evolve. A recent Intuit study found that more than half (53 per cent) of Canadian small businesses are run by part-time entrepreneurs. These are people who spend their days working for someone else, while pursuing their dream of building their own business on evenings and weekends.
Of these part-time entrepreneurs, 35 per cent would quit their jobs and go full-time if they could pull in a mere $30,000 per year or less. They aren’t looking to become millionaires, they just want to do what they love.
So what do business owners need to know before taking the leap? Here are 10 tips to help turn your passion into a full-time job:
1. Start with a solid business plan. Establish what your business goals are and how you intend to accomplish them before making the leap to becoming a full-time business owner. There are many factors to consider as part of this plan, including revenue projections, overhead cost and a product or service road map. Establishing a plan that anticipates all possible business needs and outcomes will help minimize risk when you leave your day job and increase the likelihood of long-term success.
2. Understand your finances. Previous Intuit research found that the number one regret of experienced business owners is that they didn’t spend enough time understanding financial management early in their careers. Having a solid grasp of your finances will better prepare you to take your business to the next level. Cloud-based accounting software, such as QuickBooks Online, is an easy-to-use solution that can help you understand the bigger picture and manage your finances.
3. Find a financial guru. Develop a relationship with a financial professional who can offer advice and strategic insights that give you a better sense of your overall financial situation. They will also provide you with the information you need to secure a loan from banks or the government.
4. Seek out seed money. More than half of new Canadian businesses start out with only their personal investments. Only 10 per cent of these businesses borrow money from a financial institution or receive government funding. As mentioned, working with a financial professional can increase the likelihood that you’ll secure seed money from traditional sources. Alternatively, big businesses are increasingly offering funding to startups. Make sure you understand the options available to you, and make the most of every dollar as you get your business off the ground.
5. Keep your eye on the prize. Making the transition from a startup to a mature business is a long road. According to Statistics Canada, 80 per cent of new small businesses survive for a full year, but more than half of all small businesses are out of business by year five. It’s important to focus on your long-term objectives and what your business needs to make it. You’ll likely encounter setbacks along the way, but every startup goes through tough times. Keep looking ahead.
6. Recognize your weaknesses. Having a business partner can help you manage the challenges of making the transition from a part-time to full-time business owner. Find someone who has different strengths than you. For example, if you have a creative mindset, a partner who is business-savvy will give you a broader perspective. Be sure to choose the right business partner and don’t let personal relationships cloud your judgment.
7. Understand risk. You’re clearly not afraid to take risks; after all, you started your own business. Still, everyone has their own level of risk tolerance. Some uncertainties associated with going full-time include loss of income and personal sacrifice. Identify how much you’re willing to risk and the best time to make the transition.
8. Build a support network. It’s a good time be a startup in Canada. There are many resources available to help you, including Startup Canada, Communitech and the Canadian Youth Business Foundation. These services can provide you with tips on how to secure financing and offer professional development opportunities.
9. Make your customers your number one priority. Developing strong relationships with your customers is vital. These relationships are critical during a period of transition, and will be a strong foundation as your business grows. Starting a rewards program is one way to prioritize your customers while building your business through customer referrals.
10. Get the word out. Think about how to make the best first impression with potential customers before investing in your business full-time. Brand awareness cannot be underestimated, and can be done through various methods that suit any budget. Think about the best ways to get the word out, whether it’s attending a networking event, developing signage for your store or building a LinkedIn page.