Chapter four: Getting from a plan to a business

You’ve put a lot of work into planning your business; now it’s time to get it going. In this chapter, you’ll learn about the necessary steps to turn your plan into a reality. You may find that you can skip some of these steps, especially if you’re planning a very small business. It’s worth taking the extra time to complete this section. It will help you anticipate what might happen, maintain your focus and improve your ability to manage risks. Remember to keep your business plan up to date as you continue to learn about and develop your business.

How to register your business

Before you open your business, you may need to let the government, Band Office or your professional association know about it. To register your business, you need to start by deciding on your business name. It is important to choose a name that is unique and easy to remember. You cannot choose a name that is already in use by another business, so you’ll have to do an online name search once you have an idea. In Ontario, you can use the Enhanced Business Name Search to see if a business name has already been registered.

You must also know the type of business structure you will be operating before you can register your business. While you can change your structure later, it’s better to seek advice early.

Once you’ve decided on your business name and structure, you are ready to register. You are usually required to register your business in the province or territory where you will operate. There are certain cases in which you may also be required to register with the federal government. For example, if you plan to hire employees, you’ll need to register for a business number with the federal government. If you decide to incorporate, you can register either federally or provincially. The Canada Business Network guide on registering your business provides an overview of the key registration requirements that may apply to you.

In Ontario, you can register your business in the following ways:

• through ServiceOntario’s website
• by mail
• in person at one location in downtown Toronto

The cost to register your business ranges from $60 to $80. In Ontario, your registration is valid for five years and must be renewed. You can visit the ServiceOntario website at or call 1-888-745-8888 for access to a variety of tools and resources to register your business.

How to open your business accounts

You’ll need to have at least one, and possibly several, business accounts at a convenient branch of a bank or credit union. The bank or credit union will keep your money safe and help you to manage it effectively. Every Canadian bank has a website full of useful information about the types of accounts they offer and the costs and benefits of each one. Visit your local branch and discuss your needs with a Customer Service Representative.

Information you’ll need to open an account

• business registration (e.g., corporation number, letters patent)
• Master Business License
• business address
• names and personal information, including signature, of all people who will have the ability to deposit or withdraw funds
• your draft business plan

You’ll also be asked questions about:

• the nature of the business
• your projected revenue

How to obtain insurance

You’ll need insurance for your property and for your operations. Some of your lenders/financiers, suppliers and customers may require certain levels of insurance coverage. An insurance broker can help you to determine the type of insurance you need, where to get it and how much it will cost.

Helpful tip: An insurance broker will help you to find a company that will insure your home, your car, your business property and your business activities. If you have employees, you will also need to register with the Workers’ Safety and Insurance Board.

Recruiting your staff

From your business plan, you’ll know the types of skills you’ll need to run your business. If you’re starting a very small business, you may find that you don’t need to hire any staff. This could change as your business grows. If you’re a medium or larger business, consider working with a Human Resources Consultant to set up your new organization.

As you’re getting ready to open your business, make sure you place job ads and recruit people with the skills you need. It’s important to have the right people for the right jobs. You can get advice from a variety of sources online or from your business advisor or Economic Development Officer on:

• writing and placing a job ad
• interviewing applicants
• deciding who to hire
• job descriptions
• what to pay your employees
• how to supervise your employees
• how to create an enjoyable and productive workplace

The interview

It’s important to interview potential staff before you hire them. An interview can tell you a lot about a person’s work style and how they would interact with their colleagues and customers. If you publicly advertised for the position, start by screening the applicants to make sure they have the basic qualification that the job requires. Once you’ve narrowed down the list of applicants, begin contacting them to set up an interview.

Helpful tip: you don’t need to interview every individual that applied for a job, but the more people you interview, the more choice you’ll have when selecting the successful candidate. Remember that a person’s application cannot give you a full picture of their personality and work habits. Try to interview between three to six candidates to make sure you have a sufficient pool to choose from.

Prepare a list of questions prior to conducting the interviews. Your questions should be easy to understand and should give you information about a candidate’s past job performance, skills, qualifications, and personality traits that are directly related to the position you are trying to fill. Be sure to ask all candidates the same questions so that you can compare their answers when deciding who is right for the job.

Picking the right candidate can be a difficult decision. Should you hire the most experienced person or the person who was most excited about the job? How do you weigh the importance of a candidate’s qualifications versus their personality traits? Your staff can be critical to the success of your business, so think through your hiring decisions carefully.

Your staff

You may want to create charts similar to the ones below with a description of the roles, responsibilities and qualifications of the people who will be working in your business. Keep in mind that your staffing needs may change as your business grows. It may be helpful to update your charts whenever you hire new staff.

Management

Front-line workers

Words of wisdom on hiring and retaining staff

Peter Jensen is a co-founder and Managing Partner of Jensen Group, an Aboriginal design and multimedia company:

Nothing is more important to a business than the people it employs. Businesses are in a constant state of flux – either growing or shrinking, but never truly static. If you have great people, they grow your business. If you don’t, they shrink it.

The staff you employ represent you – they are your face, your voice and your personality to your clients, to the other members of your team and to the general public. Of course you want skilled, competent and accomplished individuals – everyone does. But for us, work ethic is one of the key attributes we focus on. Skills you can teach, but work ethic is instilled. If your company prides itself on quality service, you won’t achieve it without employees who share your work ethic.

Shannon Bennett is the Chief Financial Officer of Jacob & Samuel Drilling Ltd., a Métis owned mineral exploration drilling company:

We’ve seen lots of failures in the mining industry. Often there’s failure because there’s a lack of staff with the necessary strengths in finance and accounting. Strong and routine accounting practices are critical to business success, and having the right staff in place is a must. Finance and accounting staff should regularly undertake cash projections and should have a solid understanding of break-even points, in order to put the company in a position to survive through tough times.

Case study: Amaguk Inn

Courtesy of the Purdy Crawford Chair in Aboriginal Business Studies at Cape Breton University

The Amaguk Inn is located in a remote community. The hotel is equipped with 18 guest rooms, a dining room, and a lounge. When the hotel first opened in 1998 there were 6 employees and today there are about 15. A major challenge the Amaguk Inn faces is staffing – employees at the hotel have little or no formal training in the hospitality industry and sometimes have to take on multiple tasks. Not only does the hotel face lack of trained staff, it also faces a high turnover rate.

To learn more about the Amaguk Inn and consider the steps you would take to reduce employee turnover and provide cost-effective and beneficial training opportunities for staff, please see the Amaguk Inn case study.

Open your doors — celebrate!

You'll be ready to welcome the world when you have:

• a space that’s ready to use: either online or physical.
• equipment and staff who know how to use it
• everything you need to deliver your product or service
• money to make a transaction
• customers aware of your business and ready to try your product or service

Make a sale

Will that be cash or credit?

It seems like a simple question, but there’s a lot to think about. Will your business transactions be large or small? Will they be frequent or infrequent? How much will it cost your business to offer credit? If you’ll be selling to government or other businesses, how long do you expect to wait for payment once you’ve sent an invoice? Each industry has its own standards. In retail, purchases are made using cash, debit or credit cards. In some wholesale businesses, suppliers expect a cheque on delivery. In some service businesses, an invoice is sent once the service has been delivered and the client is expected to pay within 30 days. If you have an online business, it may be logistically easier to accept credit card payments over the Internet, rather than cash. These standards of payment are called “terms of trade.”

Write down the terms of trade in your business plan.

Managing your business

There are a number of ways to organize all the things that happen in your business. Business activities tend to be cyclical and understanding the cycles in the life of your business will help you to predict and plan for events.

Business owners need to keep track of their business and all of its functions. It’s important to understand how the different functions of a business relate to one another. Think about what needs to be managed and when things need to be done in your business.

What needs to be managed

There are three key areas that need to be considered by anyone owning, operating or managing a business: the product or service of the business, the marketing of that product or service and the financial activities of the business.

For each area, it’s important to consider:

• Who is in charge of these aspects of your business?
• What activities fall into each of these areas?
• How do they relate to one another?
• What’s your plan or strategy for each of these parts of your business?
• What else needs to be managed in your type of business?

Managing your employees

Depending on the size of your business, your staff may be responsible for most of the day-to-day operations. As the owner or a managing partner, it is important to make sure your employees are fulfilling their responsibilities. This will help to ensure that your business runs smoothly. You may choose to develop a personnel policy that establishes generic rules and guidelines for everyone in your business to follow.

Your employees should have a clear indication of what is specifically required of them in their jobs. When you hire a new employee, arrange a meeting within their first week to discuss roles, responsibilities and expectations. Your employees should also meet with their manager on a quarterly or annual basis to reflect on the progress achieved in relation to the expectations.

Helpful tip: It can be hard to know what to do when an employee isn’t working out. Find other business owners you can discreetly talk to about the challenges you face (i.e., you should avoid identifying individual employees by name). They’ll listen to you and could have good advice to share from their own experience.

Managing your employees tends to be easier when they enjoy working for your business and feel supported in their work environment. It’s important to create an organizational culture that helps to motivate your employees and improve their level of job satisfaction, loyalty and commitment to your business. There are a number of ways you can encourage positive morale amongst your employees. You can organize a team retreat, plan a holiday party, or start an “Employee of the Month” program to recognize staff achievements.

When things need to be done

It can also be helpful to develop a calendar to organize the timing of important business activities. Many activities are cyclical, in that they happen on a regular basis. Below are some examples and their general timing:

Every day:

• opening routine
• give assignments and direction to your team for the day
• keep track of daily sales
• deposit money
• file orders, receipts and invoices
• keep track of production, shipping and receiving
• check equipment
• talk to your customers
• fix any problems
• closing routine

Every week:

• operations: check inventories, re-order supplies when necessary
• marketing: review your salves, post on social media
• human resources: meet with your management team or partners

Every month:

• finances: pay your taxes and rent
• marketing: identify sales trends, decide on next month’s promotions
• human resources: meet with your team, evaluate employee performance
• regulatory compliance: make sure you’re meeting your employment standards, customer service, and health and safety obligation

Every year:

• finances: complete financial statements, do an inventory, file taxes
• marketing: set goals for next year, identify new opportunities
• human resources: evaluate employee performance, review your staffing needs, adjust employee compensation
• legal: review your lease or other contracts

You can also take a “quarterly” or seasonal approach to identifying what needs to be done.

Pay your bills

Money is coming in – or will come in to the business once customers pay their invoices. Now that you’ve been in business for a while, your suppliers are likely asking to be paid. Especially in the early days of a business, it can be hard to keep up with all your bills (Accounts Payable) because you have to pay for some things before they’re sold, or customers may be slow in paying what they owe to you (Accounts Receivable).

You and your bookkeeper will need to maintain good communication with your customers and suppliers to make sure the funds keep flowing. If you have trouble paying your suppliers, they may become reluctant to keep selling to you, which could jeopardize your entire business.

Conclusion

Below is a business preparedness checklist that you can use to make sure that you have completed the necessary steps to move your business from a plan to reality.

Check when complete:

• register your business
• open your accounts at a bank
• line up your professional advisors
• refine your business plan
• get your financing in place
• prepare your business space
• order equipment and supplies
• recruit and train your staff
• promote your product/service
• open your doors and celebrate!
• make a sale
• pay your bills
• share news with your team
• build relationships with your customers

Where to find support and more information

Recruiting your staff

Job Bank – Allows you to advertise job postings for positions in your business through an online service.

Hiring your employees

• information on requirements and expectations when hiring new staff
• information on how to write a job advertisement and the interview process

Employment regulations

Canada Business Ontario – Information on your obligations as an employer, including pay equity and health and safety standards

Training your employees

• Job Set Canada – Provides information on the different types of employee training and provides a training needs checklist
• Canada Business – Learn about training opportunities available to you and your employees

Managing your employees

Job Set – Provides information on performance management for your employees and guidance on how to manage performance problems or challenges

Departing employees

Job Set – Provides information on the responsibilities of the business and the employee when an employee leaves.

Sales and customer relationship management

Canada Business – Provides information on how to increase sales and how to manage relationships with customers and the public.

Day-to-day business operations

Canada Business – Provides information and guidance on how to manage your finances, your supply chain, your operations, your risks, and more.