Industry Canada states that, at the end of 2012, there were over one million small businesses in Canada, employing 7.7 million people. It represents almost 70% of the total private labour force. Small businesses are also experiencing rapid growth. The net increase in the number of small business was almost 22,000 over the 2008-2009 period, the latest year for which data is available.
This week, we turned to Ejaz Nadeem for 8 things to consider when developing a successful business model. Ejaz is the Vice President of FirstOntario Wealth Management and has been in the industry for over 25 years helping both businesses and families alike.
You may be one of those individuals who would want to convert your innovative idea into your own small business. Writing a business plan is the first step on your way to entrepreneurship. Before you invest your own money or look for financing, you need to demonstrate whether it is even feasible to turn your idea into a business.
A business plan helps you create such a road map. It includes a description of your competition, an outline of the costs of doing business, and a forecast of revenues. At the end of the day, a business must generate profits and maintain healthy margins to be successful. Simply put, you must be able to show that within a reasonable timeframe, your proposed venture will generate revenues that exceed costs, including owners’ compensation, and provide a healthy residual to reinvest into the business.
There are a few questions that you must answer in order to develop a successful business model:
- Do you plan to provide a service or sell a product?
- Will it be a brick and mortar business or an online business?
- Are you creating and serving a niche? Is your product or service unique?
- What is your target market? Will you be selling to consumers directly (Business to Consumer, B2C) or to other businesses (Business to Business, B2B)?
- How do you plan to engage your target market?
- Who is your competition and how does your business fit in? How would your business be differentiated from your competition?
- How would you make money?
- How long do you plan to remain engaged in the business and what is your exit strategy?
Some of these questions may be relatively easy to answer while others may require in-depth analysis, research and guidance from an experienced individual or a mentor. You may also want to consider speaking with a financial advisor or a business consultant for help. Good luck on your road to entrepreneurship!
FYI: If you’ve been an established business in the Hamilton region and are looking to take your business to the next level, here’s your chance! The FirstOntario 1Awards are back with a chance to win a share of $130,000 of cash and in-kind services. You can enter your small business today until March 31, 2015 at http://www.1awards.ca/.