Category Archives: Small Business Start-Up

5 Money Management Tips for First-Time Entrepreneurs

Saving money is easier said than done. However if you want to start a business, you need to break away from living paycheck to paycheck and start saving. You need to budget and save if you want to invest in your future as an entrepreneur.

Follow these five tips if you want to start managing your money more effectively.

  1. Make organization a priority.

When you’re organized, you can track every aspect of your finances. Record all of your financial information in one place so you can refer to it and track your progress. Being more organized with your personal finances will help prepare you for entrepreneurial success.

  1. Check your credit.

About 30 percent of people don’t know their credit score. If you’re among that 30 percent, it’s time to request a free credit report. If you have poor credit, set goals to improve you score.

  1. Save where you can.

People often cringe when they think about cutting back, but there are many painless ways to save. Look at your daily spending and see if you have any spending habits that you could do without, like that $5 latte you get every morning.

  1. Search for additional information.

There is plenty of free information about money management right at your finger tips. Subscribe to websites and follow podcasts that offer advice on money management.

  1. Set long-term and short-term goals.

You won’t achieve financial success overnight, which is why it is important to create long-term and short-term goals to keep you on track. Keep in mind your goals should be SMART; specific, measurable, attainable, relevant and time-based.



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Starting a Business: The First 90 Days

Once your door is open, the first 90 days of being in business set the foundation for success, make them count!

Here’s what to expect during the first three months of business;

First Customer – You aren’t in business until you have your first customer. This should be a priority during your start-up. Reach out to other business owners, friends, and family for referrals.

Master Selling – Sales are essential for business success. Take time to learn and apply new selling skills, using those new skills to close the deal with customers.

Make a Profit – Without profits your business will fail. Determine when your business will start to make profit and ensure your focus is on making profit.

Evaluate Pricing – During the first three months in business your assumption about prices to charge and expected profit will be challenged with reality. Take a good look at your price strategy. Don’t make the common mistake of offering the lowest price.

Set Quarterly Goals – It’s easy to get caught up in the day-to-day. Set short term goals to keep your business on track. Attaining these goals can mean the difference between failure and survival.

Reward Yourself – Recognise the energy and time spent to get your business off the ground and reward yourself. Taking time away from your business will recharge your motivation and ensure success for the next 90 days.

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Financial Mistakes to Avoid When Starting a Business

Some financial mistakes are minor and can be corrected on the fly, but some can easily burn the house down, so to speak. It’s a big reason why the majority of startups fail during their first few years of business. A cash flow that suddenly dries up, a huge unexpected expense, or a rapidly accumulating amount of debt have all been known to bring even the most promising new businesses to their knees.

Here are some of the biggest financial mistakes new business owners tend to make and how to avoid them.

Not Separating Business and Personal Bank Accounts

Although having one account may seem more convent, commit yourself to creating separate bank and credit card accounts for your business before you start to collect revenue. Doing this at the beginning will make it much easier to do the accounting for your business, plan for tax time and budget for unpredictable expenses that may lie ahead.

Having separate accounts will also allow a more accurate picture of your business’ financial health by preventing overlap between what you personally earn & spend and what the business is generating & costing on a monthly basis. This will also better shield you from damaging your credit if your business were to take a nosedive.

Making Big Purchases for your Business

When you start a new business, it’s understandable to want the best equipment, a fancy website and office. However, if you’re itching to make major purchases during the startup phase of your business, think these decisions over carefully. Some expenses will be mandatory depending on the type of business you’re starting, but you need to ask yourself if the expense is going to help you generate more revenue in the short-term.

Other expenses that aren’t essential to the growth of your company offer very little value to your bottom line. Make do with what you already have. Grow your business first and accumulate a higher level of disposable cash before spending on the “nice-to-haves.”

Making Big Personal Purchases

During the first year of business, there are a lot of unknown variables and unexpected learning opportunities that will come your way. The reality is that you’re going to hit roadblocks, you’re going to have failures and some of these may come with a big price tag on them.

If you purchase a car, home or any other large personal purchases and your business has something unexpected come up, you won’t be able to pay yourself next month. You can’t be strapped down with a huge amount of personal expenses. Be as minimal as possible in your business and personal life while growing your new business.

Not Saving for Slow Times and Emergencies

There is no shortage of people telling you to keep a stash of savings at hand for unexpected expenses. Call it saving for a rainy day, but there will be times when something happens and covering the cost with your credit card is a short-sighted solution that will only create more problems down the line. Most financial planners advise entrepreneurs to keep at least three months worth of expenses in an emergency fund for both their business and their personal expenses.

Not Creating a Clear Budget for your Business

If worst comes to worst, you may be able to run your business without a clear plan for the future, but you’ll have a very hard time succeeding without at least a rough budget to help guide what you can and cannot afford to spend each month. Your job is to steer your new business towards profitability, and you can only do that if you create a budget for operational, marketing and other expenses. Having a clear budget increases financial discipline and clarifies the roadmap to business growth.

Create a budget, track your expenses, save for emergencies and always think of expenses in terms of how they will generate revenue for your business.


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Sole Proprietorship, Partnership & Corporation

Which legal structure is right for your business?

Each form of business ownership has advantages and disadvantages that should be considered before choosing a legal structure for your business.

Sole Proprietorship

A sole proprietorship is a business owned and operated by one individual.


  • It is inexpensive to register your business as a sole proprietorship in Ontario.
  • It only has to be renewed every five years.
  • Operating as a sole proprietorship means you own 100% of the business.


  • You are legally responsible for the business; it is considered an extension of yourself.
  • You are personally responsible for any debts and liabilities your business incurred.
  • Your personal assets can be seized and used t o discharge the liability you’ve incurred if your business fails.


There are three types of partnerships in Canada;

General Partnership – Each partner is jointly liable for the debts of the business.

Limited Partnership – Liability is limited to the amount you invest into the business.

Limited Liability Partnership – Is available to groups of professionals such as; lawyers, accountants, and doctors.


  • Eases some of the liability burdens a sole proprietorship would bear.
  • Has the same tax simplicity as a sole proprietorship.


  • One partner can be held responsible for debts incurred in the name of the business by another partner.
  • Without a partnership agreement, your partner could make you responsible for debts incurred.


A corporation is a legal entity separate from its owners or shareholders.


  • No member of the business can be held personally liable for debts, obligations or acts incurred.


  • This legal structure is expensive and can be difficult to set up and operate.

Pick a form of business ownership that is right for your current circumstance, it can be altered, then review as your business grows.


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6 Financial Mistakes Small Businesses Make

Budget is a key factor when it comes to starting a business. Maintaining a healthy bottom line is an important factor to your business’s success and growth.

Business owners often make a variety of financial mistakes and let their hard-earned money leak away. Here are common mistakes and how to fix them.

  1. Overpaying at Tax Time

Every business has a responsibility to pay tax, but often overpay. Misunderstanding tax deductions or mismanaging expenses can lead to paying more than you have to. Keep track of receipts and expenses to take advantage of tax deductions at year end.

  1. Being Blinded by the Top Line

It is easy to compare your business to the competition but don’t get caught up by their top line when your bottom line is much more important.

  1. Impulse Buying During the Start-Up Phase

When starting up, it can be easy to get carried away with unnecessary expenses that can eat into your bottom line. Focus on expenses that are necessary to start, then when your business is more profitable think about buying that new desk or replacing old technology.

  1. Diversifying Prematurely

After generating some significant income, some business owners look into diversifying their product or service before investing back into the business. Before making changes to your business plan, ask yourself if it is a good idea and why you are doing it.

  1. Confusing Being Busy with Being Productive

Money is earned by working effectively with the resources you have, not running yourself into the ground to turn a profit. Identify what areas need improvement to be more efficient and profitable and set goals to improve.

  1. Not Keeping a Safety Net

Running your own business means your cash flow may not be consistent for the first little while. Without a safety net, your business could fail your first dry spell. Saving and maintaining at least two months of operating costs is a great way to give your business a chance during the first few rough patches.

By avoiding these common financial mistakes, you can protect your business’s future and transform it for the better!

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Calculating Start-up Costs

Whether you are trying to secure funding or you are trying to figure out what it will take to get your business up and running, an accurate estimate of start-up costs is necessary to predict financial performance for the first year or few years.

Every business has different cost requirements, but these steps will help you gather some numbers to start.

  1. Determine your start-up cost structure.

Here are six cost categories for new businesses;

  • Cost of sales
  • Professional fees
  • Technology costs
  • Administration costs
  • Sales and marketing costs
  • Wages and benefits

Think about these cost categories, how they affect your business and how they will be weighted across your business.

  1. Develop comparables

Compare industry leaders with your business’s costs. Some aspects like your revenue numbers will be different, but it will help you break down how much you should be spending on each cost category.

  1. Project start-up costs conservatively.

When calculating start-up costs, keep in mind you may need to cover expenses for a few months before you even open for business. And once you are operating, it will take time to become self-sustaining. Be conservative in the early stages with your cost projections and estimated revenue.

  1. Separate one-time costs from reoccurring costs.

Distinguish which costs you will have year-to-year like salaries and rent from one-time costs like furniture and equipment. This will allow you to establish a budget for after the start-up period.


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4 Tips to Evaluate your Business Idea

So you’ve spent some time thinking and you’ve decided to quit your day job and start a new venture as a business owner with your great business idea! Wait a minute, let’s take a step back… Before committing to starting your business full time, it’s important to evaluate the potential of your business idea.

Here are some things to consider when testing the feasibility of your business idea.

  1. Find your target market.

A key factor in running a successful business is having customers who want to buy your product or service.  Picture your ideal customer, their age, gender, income, and location. This will give you a better idea of who you are targeting and how many are in your area.

Conduct a market analysis to determine how big the market is, how saturated it is and if there is room to add your product or service to the mix. Once you have done your research, then you can decide if it is the right target market for your business.

  1. What makes your product/service unique?

While you researched information to identify your target market, you probably found other businesses with similar products or service in your area. This doesn’t mean your business won’t work, it just means you will have to identify what makes your product or service different from the others. You can do this by creating a unique selling proposition, an effective tool that helps you define your brand and make your business more memorable.

  1. Research your competition.

Along with knowing who your ideal customer is, you also need to know who else is trying to target that same audience. Knowing who your competitors are and what they offer that’s different from your product or service is important to understand before you move forward with your business.

  1. Financial forecasting.

A big concern for most business owners is money, especially at the start. What will it cost you to get off the ground? Where will your capital come from? What are you start-up and ongoing expenses? What is your earning potential once you’re up and off the ground? These are all questions you should have answered before starting your business so you have a better chance at success.

Going through this type of evaluating may seem like a long process but it could save you time and money in the long run. Once you’ve done your research and have decided your business is feasible, the next step is to create a business plan.

For more information on business planning, contact the Cornwall Business Enterprise Centre.

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