Starting a business can be an exciting time for entrepreneurs, however, it’s definitely a rollercoaster ride. Navigating the waters of starting a new business can have you being pulled in multiple directions and it can be hard to know which way to go.
At Futurpreneur Canada we have people approaching us at all different stages of starting their business with different questions around getting started. That’s why we decided to compile a list of some of the most frequently asked questions and have some of our Futurpreneur-supported entrepreneurs give you the answers. After all, they’ve been in your shoes at one point too.
What types of questions should I be asking my potential customers to validate my business idea?
Entrepreneurship is about solving problems and social entrepreneurship is about solving problems for both customers and for the community and planet. When we started Zero Waste Market, we knew we had a great social proposition for addressing food waste, plastic pollution, and community engagement. However what customer problems were we solving?
Rather than jumping into hypothetical questions (“Would you buy my idea?), we asked questions about specific past behaviour, keeping our ears peeled for any pain points. In our case, they might sound like this:
- What do you find most enjoyable or frustrating about grocery shopping?
- How much $$$ do you spend on [item] right now?
After we understood their pain points, we’d offer our specific idea and ask for feedback, listening for what they love and don’t love:
- What do you think about this idea?
- What might prevent you from shopping with us?
- Would you pay $XX for this? (And then track it!)
Once we initially validated our idea, our biggest lesson was don’t stop. Each time we found a further customer program, we’d dig into it with whys, and ask them to help us imagine a solution:
- What are you doing to address this problem?
- What is the biggest challenge you face in addressing this problem?
- If you had a solution to this problem, what would it look like?
Through our pop-up model, we talked to 100-200 customers per day; we listened not only to what their pain points were with other stores, but what their pain points are with us to keep on discovering what customer problems we can solve next.
– Brianne Miller, Zero Waste Market
If the business is a partnership, what types of issues should I be discussing with my partner before launching the venture?
One of the earliest decisions that entrepreneurs must make is to partner or not to partner. The first decision you will make is whether to establish a partnership or incorporate the business. Incorporating the business will be a larger investment initially, however your partner and yourself will be protected legally and give you the benefit of a lower tax bracket. Should you decide to incorporate, consult with a lawyer that will help you incorporate the company and create a shareholder agreement.
If you have made the decision to partner with one or more individuals, it is important to discuss the following prior to launching the business:
- Are the shares allocated evenly or is there going to be a majority shareholder?
- What are the responsibilities of each partner?
- Are you both putting in equal amounts of capital? Are you both drawing a salary?
- Are your personalities going to clash or compliment?
Prior to making your decision, do your due diligence on each other and assess whether you will clash or complement each other. Everyone is bound to clash at some point, but when your values are aligned and you are both aligned to reach the same vision, a partnership can fuel that growth exponentially.
Read more on whether or not you should partner in this full blog post by Barry here.
– Barry Hartman, Co-Founder and CEO, 505-Junk
When should I launch my business?
Like many other major life decisions, there is no perfect time to launch your business. However, that shouldn’t stop you from buckling down and getting started.
My strongest suggestion for anyone working toward launching a business is to learn and understand as much about absolutely every aspect of their future business as possible. Network and talk to as many of your potential customers as you can. Use networking events as practice to become comfortable talking about your business. People will ask the tough questions you never thought to ask. View each of these questions as a learning experience – the more questions you are asked, the more knowledgeable you will become.
Once you have proven that your business idea is one that solves a problem or fills a gap in the market, write a business plan. Yes, write a complete business plan. This will seem tedious and unnecessary at times, but it will push you to dig deeper into market research and will ensure you really know what you’re getting into. If your business isn’t a viable one, it’s better to find that out when writing your business plan than after you’ve spent all of your savings and a year of sweat equity. There are many great resources our there to help you through this process.
Secure financing if necessary. Don’t worry if you can’t get 100% of what’s needed at the beginning — once you’ve started, access to other funds will inevitably arise.
Depending on the type of business you’re planning on running, there may be other factors like finding the perfect location and securing insurance. But if you’ve got a great idea, a solid plan and the funds to get you started, it’s time to start your business.
– Joy Hillier, President and Founder, Midgard Farms
How do I determine what financing options are best for me?
From the very beginning stages of launching my own business, I was, like any entrepreneur, confronted with the following question: How do I determine what the best financing options are for launching my business?
The first thing to do, when determining the type of financing you need to launch, is to create a business plan. This breaks down all the start-up and potential costs for your business, all while aligning with developmental objectives. Because of my business plan, I was able to answer the questions of what the money would be used for, how much I needed and when I needed it.
It’s always a good idea to get some help and guidance when you are researching different options for financing. There are various different organizations that support entrepreneurs by providing advice from people who were in the same shoes. In my case, I turned to my mentor to help me determine what the best financing options were for my business and objectives.
To answer all the needs for my business, I opted to take on a few different financing options, while combining them to meet my specific objectives. These options consisted of a personal investment, financing from Futurpreneur Canada and a line of credit at my personal banking institution. This gave me the flexibility I needed to meet those beginning objectives. With every step, new project or expansion in my business, I have to re-evaluate what the best course of action for financing is to meet these new goals.
– Valérie Doran, President and CEO, Bulle Bijouterie Pour Mamans
What do I include in a business plan?
A business plan can be broken down into two major parts, which are (1) market research and (2) planning. While market research refers to an analytic approach, planning constitutes a more decision-making approach.
Market research is an analytical task which gives the entrepreneur a better understanding of their industry. It gathers information on competitors, vendors, partners, distributors and potential clients. It also highlights success factors which are specific to your business sector. Armed with a new understanding of their business sector, entrepreneurs can then identify, design or develop new business opportunities for their target market.
Once you’ve uncovered your business opportunity, it’s time to jump into decision-making mode; this is where planning begins. Entrepreneurs should ask themselves what means to use to take advantage of this opportunity. That’s precisely the point of planning.
Planning includes three parts: the marketing plan, the operational plan and the financial plan.
The marketing plan identifies the ways to take to reach your potential client and communicate the benefits your business offers to them. The operational plan aims to take stock of the human and material resources needed to carry out your project, as well as the logistical elements associated to them. Finally, the financial plan looks to be a quantitative summary of your marketing and operational plans. Introduced at the very end, it serves as a conclusion by demonstrating the financial viability of your project.
– Jean-Philippe L’Écuyer, Entrepreneur in Residence, Futurpreneur Canada
What would you tell new entrepreneurs when it comes to some of these commonly asked questions? Share your insights with us on Twitter at @Futurpreneur.