Entrepreneurism: From Passion to Profession (What You Need to Know)
When people think about launching a business, they usually think about making a living out of a personal passion or hobby. However, what many budding entrepreneurs may not realize is how many hats they will need to wear once the business gets going.
“Most people are often surprised that I don’t get to do ‘just this’ now [the hobby]. All of a sudden, there are payments you need to manage, taxes you need to manage, office space, and equipment you need to manage. Whereas when you’re an employee, you are focused on a very specific role or responsibility and not worried about all of this. Now you’re a jack of all trades,” explained Antoine Carrière, in-resident entrepreneur with Prince’s Operation Entrepreneur.
Since many entrepreneurs are sole proprietors, they are typically solely responsible for all aspects of the business.
“You’re kind of this one-man, one-woman, one-person show. You can go out there and get support from contractors, different suppliers, and sometimes we might even get some partners; but, oftentimes, it’s the single individual that is kind of running things,” added Carrière.
Day-to-day operations not only mean delivering on your businesses’ products or services, but it also means managing client relations, creating a budget, and marketing yourself.
Carrière shares some tricks of the trade on how aspiring entrepreneurs can manage the various aspects of running day-to-day operations for opening day and beyond.
Budgeting (more than counting beans)
To ensure you and your business are financially successful, budgeting is a must. So, what’s the number one rule for finances? According to Carrière, it’s paying yourself first.
“Just make sure your minimum expenses are put aside before other expenses are covered,” commented Carrière.
Carrière explained that for example, to ensure a good relationship with a supplier, a businessperson may agree to pay them upfront for an extended period of time and consequently end up not having enough to pay for rent or groceries.
“Make sure that you understand how much you and your family need to bring in each and every month in order to cover the basic living expenses,” noted Carrière.
Carrière also warns that there will be surprises when it comes to your business finances, and chances are it will cost you more than you predicted. It’s essential to evaluate whether you and your business are always at the edge of your financial limit or if you have a buffer.
Marketing (what you need to do)
In today’s world, social media makes for a very convenient avenue for marketing your business. But it is not necessarily always the best way to promote your business.
“You need to know who your client is and how your client likes to be reached, said Carrière. “If you’re dealing with the retired community, a lot of them aren’t connected on social media, depending on how old they are. Some of them still read their paper in a physical format each and every day.”
So, even if you have a state-of-the-art Instagram account, it might not make a whole lot of difference if your clients aren’t on Instagram, according to Carrière. Once you analyze who your clients are and what their preferred mediums are, then you can explore what to do and how. That’s why it is critical to conduct market research before even opening your doors to customers.
Hiring Employees (also known as Human Resources)
Because it’s easier to teach a set of skills and competencies, when searching for the right employee, look for someone who already has the values you are looking for, suggested Carrière.
“Have a conversation with employees about values and identify if you are talking the same talk around that before even talking about skills and competencies,” commented Carrière.
She suggests entrepreneurs start by writing a thoroughly researched job analysis and written job description to attract the right employees. A well-written job description will ensure a smooth hiring process. Additionally, the Government of Canada suggests interviewing three to six candidates and making sure you have formulated questions beforehand.
Legalities (find a good lawyer – you many need one)
Depending on the industry, and the potential for injury or loss, it may be a good idea for entrepreneurs to have legal support.
“I always say have that conversation before. What could be my challenges? What might come up and what should I be mindful of? And what are the probabilities of that happening [injury]?” noted Carrière.
Taxes (they know where to find you)
If you are required to, be sure to keep aside any GST or HST you collect throughout the year and not to spend it. Entrepreneurs are unofficially acting on behalf of the government when collecting these taxes.
“I’ve seen too many entrepreneurs take it as ‘this is great, I’ve been collecting GST on sales, and I need a little bit of money for cash flow.’ And they actually use that money, and they shouldn’t to help with their immediate cash flow.
“Well, come to the end of the year, and they have to remit that money, they say ‘I don’t have it, and the government says that wasn’t your money,” said Carrière.
Entrepreneurs will be required to register for GST/HST if they make taxable sales, leases, or other supplies in Canada, or if they are not a small supplier. Visit here for more information on taxes and businesses. Visit the Government of Canada website to see if you are required to register for GST/HST and for other resources on maintaining daily operations.