BMO's Financial Tip of the Week: Consider a Variety of Factors Before Starting a Small Business
TORONTO, ONTARIO--(Marketwire - Oct. 4, 2012) - As part of BMO Financial Group's ongoing commitment to financial literacy and 'Making Money Make Sense' for Canadians, BMO is releasing a financial tip every week in 2012.
BMO's Financial Tip of the Week: Canadians looking to realize their self-employment dreams should consider a variety of factors before starting their small business.
"While there are many benefits to opening a small business, entrepreneurs should understand that this is an enormous undertaking, especially from a financial standpoint," said Joe Collura, Small Business Area Manager, BMO Bank of Montreal. "Lack of sufficient preparation could have a negative effect on the success of the business and on business owners themselves, so it's important to seek the assistance of a financial professional who can help you manage your finances when it comes to ensuring the success of your business."
BMO offers the following tips to entrepreneurs-to-be:
- Do your research: Take advantage of your resources and the network you have, including relationships with agencies and suppliers, your interest/hobby groups, mentors, etc., to learn all you need to know to set up your company. This includes gaining industry insight into arranging a new phone number, deciding whether or not to incorporate the business, looking into the potential tax implications and much more.
- Consider the pros and cons: Think carefully about why you want to start your own business. Being your own boss can offer some flexibility, but be prepared to make sacrifices, such as longer hours and a possible decrease in cash in order to ensure your success.
- Develop a plan: Stress-test your business ideas and research your market, including what products and services you will offer, the appropriate price point(s), who your potential customers will be and what your sales targets will need to be to cover your costs. Keep your end goal in mind as you build your company and maintain a positive - yet realistic - outlook as you progress.
- Seek outside advice: Seek the advice of an accountant and a small business banker - financial specialists who can provide insight into setting up your company, market competition and personal and business capital needs.
For more information on starting a small business, please visit: http://www.bmo.com/home/small-business.
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Paul Cunliffe, Toronto
Valerie Doucet, Montreal
Laurie Grant, Vancouver