2 Books: Starting & Running a Small Business for Canadian

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Accessing Canada Business services
You can get in touch with your provincial or territorial service centre in five ways: Website:
The Canada Business website (www.canadabusiness.ca)

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contains information about business-related programs and services of federal and provincial agencies.
The site allows you to input your province, industry, and/or demographic group and receive information tailored to the location and nature of your business, and provides links to the individual websites maintained by some provinces.
The main site contains information on such topics as
• Starting a business
• Looking at growth and innovation in your business
• Getting financial assistance through grants, loans, and financing
• Managing federal and provincial taxes
• Complying with business regulations
• Obtaining licences and permits
• Exporting and importing
• Hiring and managing staff
• Creating a business plan
• Managing and operating a business
• Conducting market research and getting access to statistics
• Doing marketing and sales
• Exiting your business

Some of the provincial sites also provide information about and let you register for business workshops and seminars, as well as links to other useful websites.
Phone: Call the Canada Business toll-free Business Info Line at 1-888-576-4444 between 9:00 a.m. and 5:00 p.m. in every Canadian time zone.
(TTY service for the hearing-impaired is also available from 8:30 a.m. to 6:00 p.m., Eastern Time, by calling 1-800-457-8466.)

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A business information officer will direct you to the best sources of information or refer you to programs and services relevant to your business situation.
Fax: Contact Canada Business by fax at 1-888-417-0442.

E-mail: Send questions to Canada Business by e-mail from the main website
under “Contact Us.” In person:
At the offices of your provincial/territorial service centre, you can use the resource materials on your own or with the help of a business information officer.

The provincial service centres also have arrangements with existing business service organizations in communities across Canada to provide
Canada Business information.

Contact your provincial/territorial service centre for the location nearest you. Provincial/territorial government websites Each provincial and territorial government maintains a website.

Some of the provincial sites contain good general business information that you can use to get started. Here are the websites:
Alberta: www.alberta.ca

British Columbia: www.gov.bc.ca
Manitoba: www.gov.mb.ca

New Brunswick: www.gnb.ca
Northwest Territories: www.gov.nt.ca

Nova Scotia: www.gov.ns.ca
Nunavut: www.gov.nu.ca Ontario: www.gov.on.ca

Prince Edward Island: www.gov.pe.ca

Saskatchewan: www.gov.sk.ca

Bank and trust company websites
The major banks’ and trust companies’ websites have information about the products and services they provide to small businesses.

Some have information about general business topics, as well.
Small business or entrepreneurship centres
A number of small business or entrepreneurship centres provide support and training to start-up and small businesses,

for example: Centennial College Centre of Entrepreneurship:
This Toronto-based centre provides entrepreneurial training, business plan development, analysis of proposed acquisitions, as-needed business advice and consulting,
and international business training.

It also offers a 30-day New Business Starter Program, designed to provide entrepreneurs with the basic principles and practices of business, along with the skills to market, operate,
and control a business.

Visit www.centennial college.ca/coe/home to find out more.
Centre for Entrepreneurship Education and Development Incorporated (CEED):
This Nova Scotia not-for-profit society is devoted to helping people discover and use entrepreneurship as a vehicle to become self-reliant. Its services include technical assistance, entrepreneurship consulting, and entrepreneurship courses.

CEED’s website (www.ceed.ca) has more information. Ontario Small Business Enterprise Centres:
These Ontario government centres are located throughout the province and provide entrepreneurs with support to start and grow their businesses.

They offer a wide variety of support resources, including consultations with qualified business consultants, workshops and seminars, and mentoring and networking opportunities.
Visit www.ontariocanada.com/ontcan/1medt/smallbiz/en/sb_sbec_en.jsp
for more information.
The Stu Clark Centre for Entrepreneurship:
The University of Manitoba’s Asper School of Business
(http://umanitoba.ca/ faculties/management) operates this centre.

It aims to encourage the development of new businesses and entrepreneurial thinking among Canadians.

The centre supports a variety of programs aimed at youth, as well as undergraduate students and adults. Its Manitoba Venture Challenge
is a province-wide competition open to new and established businesses in Manitoba whose owners are seeking outside investment or need advice to start or grow their businesses.
Youth Employment Services (YES):
Among other services,

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this not-for-profit organization based in Montreal provides English language services to help entrepreneurs start and run businesses.
Services include business coaching, seminars on topics of interest to small business,
a mentorship program, and more.
Visit www.yesmontreal.ca
for more informationhttps://youtu.be/YZQdbK68IRk.

Business incubators A business incubator is a business-mentoring facility that nurtures small- and medium-sized businesses during the start-up period.

Business incubators provide management assistance, education, technical and business support services, and financial advice.
They may also provide flexible rental space and flexible leases.
For more information about Canadian business incubators, including a list of business incubators in Canada, contact the Canadian Association of Business Incubation

Getting Information Geared to
Your Specific Business After you find out about starting and carrying on a business in general, you can find out more about your field of business in particular.
For example, you might want to know these facts:
What skills you need for this business
What government regulations apply to this business
How much it will cost to run this kind of business
What the demand is for the goods
or services you’ll be supplying
Who the likely customers are for the goods and services you’ll be providing
What the competition is like for this type of business What supplies and equipment you require for this type of business
You need a good gateway into the sector you’re interested in.

Here are our recommendations. Industry Canada Industry
Canada’s website (www.ic.gc.ca) is particularly useful at the preliminary stage of starting a business because, in addition to general business information, it contains information on a wide variety of businesses, organized by sector.

Each type of business has its own page, with additional pages on a number of subtopics.
The subtopics vary for each business category, but they cover areas such as the following: Company directories: With links to lists of Canadian companies carrying on business in the field Contacts: With links to major trade associations in the field Electronic business:
With links to a variety of information about e-business and
e-commerce Events: With links to major trade shows in a particular business field Industry news: With links to Canada and U.S.

trade periodicals Regulations and standards:
With links to relevant government regulations and standards organizations Statistics,
analysis, and industry profiles:
With links to North American Industry Classification definitions and to selected Canadian statistics on topics such as the Canadian market, imports, and exports
.Trade and exporting: With links to relevant international trade agreements and export information Trade and professional associations

Trade and professional associations are another great source of information about particular fields of business.
Thousands of associations exist in North America.

Whatever your field of business, a related association probably exists.
A good association will give you access to industry-specific information.
Most associations maintain a website, setting out the services the association provides and membership information.

You’ll find many benefits to trade and professional associations: Trade and professional journals: Many trade and professional associations publish journals
or newsletters with current information about the field.

They also contain ads for equipment and supplies that the business uses, and some list business opportunities (businesses for sale, partners wanted, premises for lease, equipment for sale, and so on).
You may be able to get information about trade and professional journals on the Industry Canada website by following the Industry News link offered for some industry sectors. Workshops and seminars:

Many trade and professional associations hold seminars and workshops on topics
of specific interest to members.

Some offer courses leading to a designation or certification in the field.
Trade shows: Most trade associations hold an industry-wide trade show at least once
a year. Trade shows are good places to make contacts in the industry and learn about the latest trends in the field.

Obtaining Essential Business Skills After you research your chosen business field, you may realize that you need some training before you can start your business.

You may need skills specific to your chosen business field (such as how to frame a picture if you’re going into the framing business, or how to mediate if you’re going into family counselling), or you may want to pick up some general business skills and knowledge such as simple bookkeeping, basic computer skills, or how to prepare a business plan.

When people think of education, they usually think of universities, community colleges, career colleges, vocational schools, and boards of education.
But in fact, many different places offer business education and skills training.

You may be able to pick up the skills you need from a trade association,
a Canada Business service centre, or the little place in your local mall that teaches keyboarding.

In fact, you may want to avoid many of the educational institutions, because they often offer certificate or diploma programs more suited to people looking for a job, rather than individual courses focused on the specific skills an entrepreneur needs.

Where you go to get your training will depend on the kind of skill you’re
trying to acquire.

Skills for your particular business You may be able to pick up the special skills required for your particular business in a day, a weekend, or a week.

Or you may need a certificate or diploma in the field that will take months or years
to get. You may be able to find out not only what skills you need, but also where to get them, from Industry Canada or from the relevant trade or professional association.

Or you can use an online search engine (such as Google, Bing, or Yahoo!) and type in the name of the specific field you’re interested in plus the word “education”
or “training.”

If you’re not required to have a degree, diploma, or certificate offered by a university or community college, consider programs offered by privately run career colleges or vocational schools.

These programs tend to be shorter than university and community college programs,
but be warned — these courses are usually more expensive, sometimes much more expensive!

The trade or professional association in your field may offer short workshops or seminars on individual topics of interest to you, as well as complete training programs specifically for your field.

General business skills To acquire in-depth business skills, you can enroll in degree, diploma, or certificate programs offered by colleges and universities.

These programs run over the course of a year, or from two to three years.
You probably won’t be able to take one course of interest to you without taking another course as a prerequisite or without signing on for the entire program.

If you want to acquire some business skills as quickly as possible, look for continuing education courses offered by your local university.

For example, the University of Toronto School of Continuing Studies
(http://learn.utoronto.ca) offers courses
(usually with classes held once a week for about three months)
in a wide variety of business-related areas, including Accounting Fundamentals, Business Law and Insurance,

Business Management, Business Strategy,
Social Media Starter, Taxation for Canadian Business, and Understanding and Resolving Conflict. University of Calgary Continuing Education
(http://conted.ucalgary.ca) has seminars on numerous topics, including Time Management, Accounting for Non-Financial Managers, Building Great Customer Relationships, Writing Skills for Business, and Creative Negotiating.

Your local board of education may offer courses in business skills as part of its continuing education programs, and you should have no problem enrolling in individual courses rather than in programs.

Classes will probably be scheduled once a week over several months.
You may also be able to find weekend workshops or evening seminars offered by your trade or professional association, or through your provincial Canada Business service centre.
Finding Professional and Other Help Planning a business start-up takes a lot of work.

But you don’t have to do it all alone.
You can and should get professional help with many of the tasks involved. In this section, we help you determine who you need on your team, and how to find the best candidates.

Determining whom you need At the very least, you need a lawyer, an accountant, and an insurance agent or broker.

We also offer suggestions for other professionals you might find useful.
Lawyer Almost everything that happens in the business world has legal implications.
A lawyer can help you navigate through every stage of your business odyssey.

When you’re setting up your business, a lawyer can Help you decide whether or not to incorporate Help you form a corporation or partnership

Review start-up documents such as loan agreements, leases, and franchise agreements Draft standard forms for contracts to use in your business

When you’re in business, a lawyer can be of further assistance by Helping you negotiate contracts

Giving you advice about hiring and firing employees Helping you collect your unpaid accounts Acting for you in a lawsuit if you sue or are sued

Even if you decide to get out of the business, you’ll still need a lawyer to help you sell it, or give it to your children, or wind it up.

Accountant In Canada, anyone can claim to be an accountant.

What you want is a professional accountant — a chartered accountant, certified general accountant, or certified management accountant. Professional accountants are licensed and regulated.

An accountant can help you Buy an existing business Set up a bookkeeping system Prepare budgets and cash-flow statements Prepare financial statements

Prepare your income tax returns
Deal with the Canada Revenue Agency (CRA) from time to time Insurance
agent or broker

You’ll need insurance for your business, including
Property insurance to cover loss or damage to your business property Business interruption insurance to cover your loss of earnings if your business premises are damaged

General liability insurance to cover claims made if you cause injury to a customer, supplier, or innocent bystander Key person insurance to tide over your business in case you, a partner, or an important employee dies or becomes disabled

An insurance agent
(a person who deals with and sells the policies of only one insurance company)
or insurance broker (a person who deals with and sells the policies of several insurance companies) can give you advice about what kind of insurance you need and how much.

Both agents and brokers are regulated and licensed by provincial governments.

Other assistance Depending on the nature of your business, you may also want help from any of the following professionals (in no particular order):
Advertising firm and/or media relations firm:
To help you get the word out about your business Business coach:
To help you acquire presentation skills, get pointers on power dressing,
pick up business etiquette, and even improve your table manners
(for those four-fork lunches with potential investors and customers)
Business evaluator:

To help you decide on the value of a business you are thinking of buying
Computer systems consultant:
To help you choose and set up your computer equipment and choose and install your software Graphic designer:
To help you design a business logo, your business cards, and letterhead Human resources specialist (also known as a headhunter):
To help you hire staff Interior designer:
To help you set up your business premises attractively Management consultant:
To help you polish your management skills Marketing consultant:
To help you identify the market for your product or service and determine how best to reach that market Website designer:
To help you create a great website for you business Finding peer support
Even though you’re going it alone in the business universe, you may want to seek out the companionship of fellow travellers for sharing experiences and getting advice.
Whatever demographic group you fall into, you’ll likely find a business
organization for you.

These organizations provide opportunities to network and get advice geared to your demographic. Here’s a sampling:
Canadian Association of Women Executives & Entrepreneurs: An organization that provides networking, support, mentoring, and professional development to businesswomen at all stages of their careers (www.cawee.net).

Canadian Council for Aboriginal Business: A national, non-profit organization that promotes the full participation of Aboriginal individuals in the Canadian economy (www.ccab.com).

Canadian Gay & Lesbian Chamber of Commerce:
An organization designed to improve opportunities for gay, lesbian, bisexual, transgender, transsexual, two-spirited, and intersex owned/operated/friendly businesses (www.cglcc.ca). Canadian Youth Business Foundation: A national charity whose mandate is to support business owners age 18 to 34 (www.cybf.ca).

Getting Started In This Chapter
Thinking about your target market as you develop a product or service
Getting your product or service to the right people Pricing your product or service Buying an existing business instead of building your own business
Deciding on a fair price for a business Considering a franchise Finding the right location and business premises

Understanding incorporation and partnerships Knowing the rights and responsibilities of a corporation Safeguarding assets without incorporating

Your business will be in big trouble if you offer a product or service that not a soul wants, or that your chosen customer group is not interested in.

In this chapter, we help you avoid those problems and give you hints on how to develop a product or service tailored for your target customers or clients, and at a reasonable price. And don’t forget that starting a business from the ground up isn’t your only option.

This chapter also gets you thinking about existing businesses and franchises. Where you do business is a big factor in your future success, so we point out what to remember when finding your ideal business location.

We also get into the ins and outs of different forms of ownership, and what you should know about incorporating a business.
Developing Your Product or Service with a Market in Mind To start a business, you need a product or service to sell.

And it needs to be something that customers or clients want to buy.
Developing a product or service requires quite a chunk of your time and energy.
You’ll need to take on some tasks that may seem challenging, such as researching potential customers and existing competition.
If your idea is new and innovative, you may be able to get assistance with the evaluation, for example from

The Canadian Innovation Centre (CIC)
(www.innovationcentre.ca) in Waterloo, Ontario, an organization that grew out of the invention commercialization activities of the University of Waterloo.
Their website has information for inventors as well as links to other
useful organizations such as the (U.S.)

National Inventor Fraud Center
(www.inventor-fraud.com), which offers advice on how to steer away from invention marketing companies that are set up only to scam inventors.

Don’t get mixed up with a company that combines high-pressure sales tactics with a low success rate.

Is this idea right for you ?
Or is this a good idea at all? Before choosing a product or service,
play a little Q and A with yourself: Is it legal ?
And if it’s legal now, will it become illegal after it takes off ?
Remember radar detectors for the travelling public?
Is it hands-off ?
The idea may already be patented and the patent owner doesn’t want
to license to you.

(Go to Book II for more about intellectual property, such as patents.)
Are you legal? Some products and services can be provided only by a licensed individual or business. Is the product or service safe?
Could you cause harm to someone and end up getting sued?

Do you have the right reputation or expertise?
You may need both to develop the idea into a business
and reel in customers or clients.
Does anyone want the product or service?
Your idea may seem wonderful to you, but to prosper, your market must be slightly larger than one person.

So you have to do some customer research — identify a target market for the product or service and estimate the size of the market. Here’s a brief guide to doing customer research.

First, think generally about who your customers or clients might be
(keep in mind that you could be wrong about this, though).

For example, are they Other businesses?
A whole bunch of them or just one or two?
Are the businesses service providers or retailers or manufacturers?
Do the individuals live in a particular neighbourhood or geographic area, or do they live all over the country or around the world?
Are they men only?
Women only?
The young? Older people?
The well-to-do, or just anyone with a buck to spend?
Who’s the competition?
And what are they up to?
This information is known as competitive intelligence.
Your competitors may already have claimed all of the customers or clients you identified by doing your market research.

Or they may not.
You can find out by assessing your potential market share.
To start with the question we just asked (Who’s the competition?),
your competition is made up of the following:

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Direct competitors — who offer exactly the same product or service Indirect competitors — who offer an alternative product that more or less meets the same need as your product Who-was-that-masked-man?
competitors — who offer something completely different that potential customers will spend their money on instead of on your product or a similar product, much to your regret and amazement Inertia — the tendency of customers and clients to do nothing at all when brought face-to-face with your wonderful product or service Look carefully at your direct and indirect competitors and see if you can find out whether

They’ve cornered the market and are doing such a good job at such a good price that you haven’t much hope of taking market share away from them.

Or whether you should be able to relieve them of market share because you can offer better value — for example, a lower price, a higher-quality product or service, a more convenient location, greater expertise, friendlier service, and so on.

Sometimes the first competitor into the market may just have collected and educated your potential clients for you !
Their business is profitable — are they growing or shrinking?
They’re big enough and mean enough to run you out of town if you show your face on the street (have you noticed how small airlines regularly get eaten?).

How much money can you put behind this idea?
You likely can’t get your idea off the ground for free.
So you’ve got to crunch a few numbers to find out the following:
The approximate cost of launching your business.
This involves adding up your start-up costs plus bridge financing for your operating expenses until your business is generating income.

The approximate amount of money available to you for a business start-up.

The cash you have on hand or can raise through family contributions may be enough to get your particular business up and running; or you may need a bank loan for a larger amount; or you may need a significant investment from an angel investor or venture capital firm.

How much you’ll be able to raise (especially from outsiders) is linked to the likely return on investment for your idea.

So just because it will take $1 million to build a plant to produce your product doesn’t mean you should scrap the idea. It could be full steam ahead if an investor believes that your business could generate profits of $2 million annually after a couple of years or that the business might be worth $50 million in five years.

Finding a Route to the Target Market Okay, so you think you’ve got a product or service that can go the distance. Now you have to figure out how to get it from you to the person who will actually use it — so you have to decide on one or more distribution channels.

You have two basic choices:
Distribute directly:
The product or service goes from your business to your buyer
(most services and products take this route).

Distribute indirectly:
The product or service goes from your business to another business to the buyer. Although your target market is the buyer, your customer is the “middleman” business.

Pricing Your Product or Service You can make a profit in different ways —
for example, by combining a small profit on each item or service provided with
high sales volume, or by combining a low sales volume with a big profit on each transaction. (Best, of course, is high profit on each unit and high sales volume, but not many businesses are that lucky.)

But if you underprice, you’ll lose money on every sale even if you sell a gazillion units; if you overprice, no one will buy at all.
How do you figure this whole thing out?
In this section, we talk about how to settle on the right price to charge.
Deciding on the minimum price you can charge Minimum price is not all that difficult to figure out. As a rule, you don’t want to charge less for your product or service than it costs to produce.

(An exception is offering the product or service as a loss leader,
to lure customers in — but you can’t keep that up for long, and certainly not on an important part of your line.) The formula below tells you, as the owner of a start-up business, your cost to produce (your break-even cost):

Your break-even cost for the period is the amount you need to charge for each unit of your product or service to pay your direct and indirect costs.
Deciding on the maximum price you can charge Now over to the other end of the price scale. Here, the ceiling for your price is the value of your product or service to the customer or client.

Value is what the customer perceives that he or she is getting in exchange for the cost of the product, and includes things such as quality and reliability of the product or service, image or prestige associated with the product or service, uniqueness of the product or service, backup from your business such as support and guarantees,
convenience of dealing with your business

(such things as good location or inexpensive delivery or the helpfulness of your staff), and incentives such as rebates (money back following a purchase), discounts
(money off the purchase price), and other freebies.

If a customer believes that your price is greater than the value of your product or service, the customer won’t buy from you. Setting your price Setting a price comes down to supply and demand. If a product is essential or useful and hard to find, the price can be higher and the product will still sell (until people run out of money).

If a product is not a must-have or is readily available, the price has to be lower if you want to sell. Higher or lower than what?
The competition’s price.
So see what your competition is charging.
When you know that, then you can implement one of the following three strategies: Charge more than the competition.

This will work only if your product is seen as more valuable than the competition’s. You can increase the value of the same product or service offered by the competition by (for example) creating a higher-end image for your business or by trading on your reputation as an expert.

Charge the same as the competition. But you still need to increase the value of your product over the competition’s.

You could do this, for example, by offering a more convenient location to your target customers. Charge less than the competition. Just be careful not to undercut your own cost of production, and keep in mind that you’ll acquire a “reputation.” Whether it’s true or not, customers and clients will tend to associate lower prices with lower value.

Only in rare cases will people think they’ve made a marvelous discovery of a business that carries exactly the same product as the competition, but at a lower price.  Considering an Off-the-Shelf Business Building your own business is a lot of work.

In addition to coming up with a business concept, you have to find a good location, prepare your business premises, buy equipment, and find and attract clients or customers
(see Book VI).

And when you custom-build your business, you have no one to give you on-the-job training or to pass on wisdom gained from experience about what works and what doesn’t.  But custom-building a business is not the only way to go into business.
You can buy an existing business instead.

In the next few pages, we weigh the advantages and disadvantages of each approach.
Buying an existing business You might want to buy an existing business for a number of reasons:

You already know of a business that you want to own.
You’ll be able to eliminate a lot of the difficult, early work involved in building
a business.
You may be able to tap into a source of advice from the original owner.
You may be able avoid some of the risks of starting a new business:

• You know that the product or service already has a market.
• Your immediate money situation may be better — borrowing money may be easier, because banks know that the risks of failure are lower for an established business than for a start-up.
• You may be able to get rights such as the right to distribute a specific product in a particular area, or the licence to manufacture a particular item.
But before you go rushing off to buy a business, know that buying a business has disadvantages, as well: A successful business isn’t cheap.

A successful business may not continue to be successful for you.
The success may have been based on the personality and/or skill of the current owner. The business’s problems become your problems.
Looking carefully at existing businesses Before the owner agrees to answer your questions, show you around the business premises, and let you see documents, he or she may ask you to sign a confidential disclosure agreement.

By signing the agreement you agree not to tell anyone else what you find out about the business, and usually you also agree not to use the information for any purpose but assessing the business for a possible purchase.
Take a very careful, even cynical, look at any business before deciding to buy. In the upcoming sections, we set out some questions to guide your examination of a business that’s up for sale.
Why is the owner selling the business?
This may be the most important question to ask. Many reasons exist for selling a business, but from the buyer’s point of view, some are better than others. These reasons shouldn’t set off alarm bells for you:

The owner is retiring
( . . . as long as the business didn’t cause the ill-health).

The owner wants to pursue a different career or business opportunity
(unless a problem with this business triggered that desire).
The owner is having marital problems.
These reasons may signal trouble:
The business is not profitable.
The owner cannot raise enough money to finance the business.
Competition for the business is heating up. Markets for the business’s product or service are drying up.

The work hours are too long and/or the work is unpleasant.
The owner may be very forthcoming about the reasons for selling, or may be reluctant to talk. Even if the owner does talk, don’t believe everything you hear.

Try to get information from others in the same industry — business owners, employees, suppliers, and customers.

What is the reputation of the business?
A major reason for buying an established business is to get the benefit of its reputation. Speak to the business’s customers and suppliers to find out what they think of the business.
Contact the Better Business Bureau, industry associations, and any licensing bodies to see if any complaints have been made against the business.
Search online for reviews of the business.

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What is the reason for the success of the business?
You want to make sure that the business has been successful because of a lasting reason. So here are some areas to check out: Does the business have a great product
or service — or was it built on a fad that’s now fading?

Press on the picture to Read the Book
Part I: Small Business Essentials
We don’t want you to take flight into entrepreneurship without any idea about what you’re getting into. So in this part we do a kind of prelaunch check to help you figure out whether you’ll make the grade or whether you’ll wash out.

In Chapter 1, we tell you what going into business for yourself is really like. It’s not all coffee breaks and exciting foreign travel — that’s for sure !
Do you think you have the right stuff to survive and prosper as an entrepreneur ?
Take our questionnaire . . . if you dare.

(If you don’t dare, you’re a wuss and you just got washed out.)
In Chapter 2, we tell you how to find sources of information about starting and carrying on a business, about acquiring general business skills and skills specific to your business field, and about linking up with your chosen field.

We also give you some ideas on how to find experts whose help you’ll need.
In Chapter 3, we help you figure out what ideas you’ll want to use in your
business — such as inventions, written materials, business names, and slogans and logos — and whether you have or can get the legal right to use them.

(We also tell you what can happen if you use ideas without having the right to use them.) In Chapter 4, we take you through the process of developing a product and identifying a market.

Finally, in Chapter 5, we take you through the process of buying a business, and we finish off with some wise words about franchises. Part II: Getting Started Looks like we can’t hold you back! You’re determined to go into business.

To make sure your business start-up is a success, you’ll need a few things.
In Chapter 6, we explain about the three forms of business organization and how you have to choose one (or else one will choose you). What’s your pleasure — sole proprietorship, partnership, or corporation ?
If you haven’t got a clue, this chapter will help you decide what’s best for you.

In Chapter 7, we take you shopping for all the basic equipment your business will require. We cover a lot of territory — furniture, hardware, software, domain name and Web site, business cards, and stationery.

And we don’t stop for ice cream or bathroom breaks.
(Hey, you gotta be tough if you wanna succeed in business.)
In Chapter 8, we help you decide where your business (and all the equipment you bought in Chapter 7) is going to be located:
Your home office ?
Leased commercial space? Purchased premises ?
We also discuss the pros and cons of each choice.
Now you realize that setting up your business doesn’t come free, and the bills start to arrive in Chapter 9, so you’ll need money.

Don’t panic! After we help you calculate how much you’ll need, we also tip you off about where to find the money. In Chapter 10, we complete the money-hunting process by explaining how you go about asking potential lenders and investors to part with some of their cash.

Part III: Operating Your Small Business Ackk! What was that ?
Probably just an incoming risk — nothing to worry about as long as you keep out of its way. You may be all set up and ready to open your doors, but we have more to tell you to help you get along well with the people you’ll deal with in business.

In Chapter 11, we tell you how to create and keep a good relationship with your customers and clients by creating a marketing buzz. In Chapter 12, we wise you up to risk management — the art of keeping yourself and your business out of trouble.

In Chapter 13, we introduce you to your customers and explain how to keep both them and yourself happy. In Chapter 14, we introduce you to your suppliers, who are often just as important to a business as customers.

And in Chapter 15, you meet your crew! (After you’ve hired them, that is.) Oh-oh — red alert! You’re under attack . . . by taxes. In Chapter 16, we help you fight back by clueing you in about how taxes on a business work. You’ll survive the tax attack and get within firing range of the basic principles of accounting for a small business.

In Chapter 17, we explain what you have to know about accounting, even if you have an accountant and a bookkeeper. Part IV: What Does the Future Hold ?
Who can say what you’ll run into as you head into the future ?
We try to prepare you for the good, the bad, and even the ugly in this part.
In Chapter 18, we discuss a few common problems (our focus is on two areas: lack of money, and disputes) and some solutions.

In Chapter 19, we offer some tips to help you steer a course to success as your business expands. And in Chapter 20, we tell you how to turn off the lights and close the doors in case you decide to — or are forced to — pack it in permanently.

Part V:
The Part of Tens In this part, in three short and perky chapters, we offer you Ten questions every prospective small business owner should ask:
Each question highlights a major topic covered in the book.
Ten key documents a business needs: We discuss them briefly here but refer you to various chapters throughout the book, where we talk about them at greater length.

Ten Internet sites you’ll find useful: This is a quick reference guide to some sites that are handy for running a small business. The CD-ROM You can find every form, table, questionnaire, and contract that we mention in this book on the CD-ROM.

The files were prepared in Microsoft Word, Excel, or are Adobe Acrobat PDF files, so you’ll need a compatible program to view and use them.
We’ve also rounded up some very helpful free and trial versions of software that we think you’ll find useful in your business. Icons Used in This Book Scattered along the left-hand side of this book are little icons.

Here’s a guide to what they mean: This icon tells you to fire up your CD drive and have a look at the great software that comes with this book, or at an electronic version of a document or table that we’re talking about. This icon draws your attention to important information you’ve probably already forgotten if we’ve told you about it before, or to information that we want you to remember in the future.

This icon suggests that we’re going to say something that will make your eyes glaze over. But we use it sparingly — instead we try to make sure to cover technical points in understandable language, so you hardly know you’ve hit a technical bump at all. This icon tells you to sit up and pay attention. We’re telling you something that’s worth acting on or keeping in mind.

This icon says that you’re heading for trouble and should reconsider your flight path! This icon is kind of self-explanatory, don’t you think? We use it when we think you should consult an expert — instead of trying to do it yourself and getting into a legal tangle. This icon is also self-explanatory. We use it to steer you toward an expert who will keep you out of financial tangles.

This icon tells you that you have work to do, to find out more information than we can tell you in this book. Where to Go From Here You don’t have to read this book in order. Each chapter is self-contained, so you can pick up some information here and some information there about a topic that’s of particular interest to you.

For example, if you’re interested in buying a franchise, have a look at Chapter 5.
If you’re keen to incorporate, take a peek at Chapter 6. Worried about where you’re going to get the money for everything you need to run your business?

Check out Chapters 9 and 10. If you’re forward-thinking, and you’re already envisioning how your business will expand, go to Chapter 19.

But if you’re really thinking of starting a business and you haven’t been in business before, we recommend that you begin at the beginning and read until you reach the end. Part I Small Business Essentials In this part . . .

We help you to figure out whether you’ve got the right stuff to go into business for yourself in the first place. We also give you information about starting and carrying on a business, and we help you to decide what ideas you’ll want to use in your business and whether you can get the legal right to use them.

Then, we take you through the process of developing a product and identifying a market. And in case you don’t want to start a business from scratch, we tell you about buying an existing business.

Chapter 1 Do You Have the Right Stuff ?
In This Chapter Knowing the pros and cons of becoming a small business owner Finding the right business opportunity Assessing your entrepreneurial spirit Looking at timing and resources Deciding if you should keep your day job So you’re thinking of starting your own business! Every year, lots of people get the entrepreneurial urge and start businesses.

Some of those businesses become very successful. But every year lots of new businesses fail. Business success or failure isn’t the result of fate, or random chance, or (usually) acts of God.

A business does well for good reasons — like a great product or service, a solid marketing plan, and the owner’s good management skills.
Likewise, when a business goes under, you can often identify the reasons — lack of money to get properly started, poor timing or location for entering the market, or a wipeout on the customer service front.

Whatever the reason for a business failure, it usually boils down to this:
The business owner didn’t look carefully before leaping. This chapter and the others in this section of the book help you think about going into business before you hit the ignition button and blast off. Think of this first section as “countdown.” Weighing the Pros and the Cons People start up their own businesses for different reasons.

One of the best reasons is that they’ve found a business opportunity that’s too attractive to pass up. A good reason is that they want to work for themselves rather than for someone else.

A depressing — but still valid — reason is that their other job options are poor
(the number of small business start-ups always rises when the economy sinks). Whatever your reason is for wanting to become an entrepreneur, you should know that life as an entrepreneur is a mixed bag. Running your own business has some great advantages, but it also has some hefty disadvantages.

The pros Here are some of the advantages of going into business for yourself:
You’re free! You’ll have the freedom to • Make your own decisions — you’re in charge now. Only investors (see Chapter 9), customers and clients (see Chapter 13), government regulators (see Chapter 6), and so on will tell you what to do.
• Choose your own work hours — in theory, anyway.

You may not be able to get away with sleeping in until noon or concentrating your productive hours around 3 a.m. But you’re more likely to be able to pick up the kids from school at 3 p.m., or exercise from 10 a.m. to 11 a.m., or grocery shop during normal office hours.

• Create your own work environment (see Chapters 7 and 8) — surround yourself with dirty coffee cups and overflowing ashtrays if you feel like it. You can be creative !
You can build your business from scratch following your own ideas rather than following someone else’s master plan. (See Chapter 3.)

You’ll face new challenges! Every day. And twice as many on days that end in a y. You’ll never be able to say that work is always the same old boring routine.
Your job will be secure . . .
as long as you have a business! Your business may fail — but no one can fire you. (You can ask yourself to resign, though.)
(See Chapter 18 for information about the depressing prospect of running out of money.) You’ll have increased financial opportunities! If your business is successful, you have the potential to make more than you could as an employee.

You’ll have tax advantages !
This is especially true if your business is not incorporated (a sole proprietorship or a partnership), but it’s also true in a different way if your business is incorporated
(see Chapter 6).

The cons Do you think we used enough exclamation marks in the exuberant Pros section? Bet they got you all enthused and excited about entrepreneurship. But calm down for a minute — being an entrepreneur has plenty of disadvantages, too.
For some people, they outweigh the advantages.

For example: You may not make a lot of money. You may make enough money to live on, but it may not come in regularly like an employment paycheque, so you’ll have budgeting problems. Or you may not make enough money to live on. You may not even make any money at all. You may go bankrupt and lose not only your business, but most of your personal possessions as well.

See Chapter 18 for comfort (or failing comfort, at least for information). You lose easy and inexpensive access to employment benefits if you don’t hang on to employment elsewhere. These may be benefits that you have come to count on — extended health and dental benefits, disability insurance, life insurance, a pension plan, and so on. You’ll have to work really hard.

That is, if you want to succeed — and you won’t just be working at the business your business is about. You’ll also have to do stuff you may not be trained to do, such as accounting, sales, and collection work. (But see Chapters 13 and 17 for some help.) You may not have a lot of free time. You may see less of your friends, family, and pets (even if you’re working at home) and have less time for your favourite activities.

Getting a business up and running takes more than hard work; it also takes your time and commitment. Don’t scoff that you won’t let that happen to you, at least not until you’ve put in hours filling out government paperwork
(GST/HST for example — see Chapter 16) on a beautiful sunny day that would be perfect for, well, almost anything else.

By the way, you don’t get paid for your sacrificed time, either. You may have to put a lot of your own money into starting up the business. And even if you can borrow the money, unless the lender is your mother and your mother is a sweet, trusting soul rather than a financial shark, you’ll have to give personal guarantees that the money will be repaid (with interest) within a certain time.

The pressure is building! (For more on borrowing, see Chapter 9.)
By the way, not to add to the pressure or anything, but you should know that you might lose your own money or not be able to repay borrowed money because of factors beyond your control. You could get sick (and now you probably don’t have disability insurance), be flattened by a competitor, squashed by a nose-diving economy, or whacked by a partner who pulls out on you.

(See Chapter 18 for advice on how to deal with some of these problems).
You are the bottom line. No excuses — success is up to you, and failure is your fault. You’ll have to keep on top of changes in your field, the impact of new technology, economic fluctuations. . . .
Your personal life can stick its nose into your business life in a major way. If you and your spouse split up, your spouse may be able to claim a share of your business under equalization provisions in the family law of some provinces.

You might have to sell your business or your business assets (property) to pay off your spouse. (Chapter 20 looks at selling your business.)
Choosing Your Business After you’re aware of the upside and the downside to running your own business, start considering how people choose a business to go into.

Five main kinds of businesses exist:
Service: Doing things for others, including the professions (doctors, lawyers, dentists, architects, accountants, pilots); skilled trades (plumbers, electricians, carpet installers, bookkeepers, renovators, truckers, carpenters, landscapers); and a huge range of other things for which you might need a lot of training and skill, or at least some talent and willingness.

We’re talking about music teachers, financial planners, real estate agents, painters, insurance brokers, management consultants, taxi drivers, travel agents, dry cleaners, caterers, event planners, hairdressers, equipment repairers, commercial printers, photographers, gardeners, snow removers . . . this list could go on.

Retail: Selling things to the general public, such as jewellery, groceries, clothing, appliances, books, furniture, antiques and collectibles, toys, hardware, cards and knick-knacks, garden accessories, plants, cars . . . this list could also go on.

Wholesale: Buying large quantities of goods from manufacturers at a discount and selling in smaller quantities to others — usually retailers — for a higher price.
For example, you could buy nails in bulk from a manufacturer and resell them to hardware stores.
Wholesalers sometimes also sell to the general public, usually without the frills of a retail establishment (for example, bulk food, carpets, and clothing).

Manufacturing: Making things from scratch — from designing and sewing baby clothes for sale through a local children’s clothing store to making furniture in a workshop to manufacturing steel ingots in a mammoth industrial plant.

Extraction: Harvesting natural resources, including agriculture, fishing, logging, and mining. Note that e-commerce is not a new and separate kind of business — that kind of thinking got it into trouble in the first place and caused the dot-coms to crash in the first years of this century. E-commerce is simply a tool to use in business.

Small businesses are most likely to concentrate in service and retail.
Service, in particular, is usually the cheapest business to start up, so it attracts a lot of entrepreneurs.

Now, most people don’t look at a list of the five kinds of businesses and wonder, “Service or extraction ?
Retail or manufacturing ?
What best expresses my personality ?”
Instead, they have an idea that happens to fit into one of the five categories.
At least, having an idea helps. And most people do, but others don’t.
Those who have a clue Most people who are thinking seriously about going into business for themselves have an idea about what they want to do before they start thinking seriously.

Many people get their idea from a job they’ve held and decide to develop a new product or service similar to a former employer’s, or become a consultant in the field.
If you’re going into the same field as your previous employer, be careful not to breach any confidentiality agreement or noncompetition agreement you may have entered into.

And do not infringe your previous employer’s copyright or trademark (see Chapter 3). The idea may come from your skills: If you have professional training or training in a skilled trade, you can set up your own business instead of joining a firm. If you have a hobby, you may be able to expand it into a business.

If you invent something, you may be able to create a business around it. If you have always wanted to start a particular kind of business, maybe now is the time. Or you may have become aware of an excellent business opportunity. It may or may not be related to your training or a hobby or your “dream” business.

Or in your travels, you may have seen a good idea that hasn’t hit your hometown yet. (Starbucks was once confined to one city on the West Coast, believe it or not. Years ago, one of the authors was taken from Vancouver to Seattle by a friend to try a cup of Starbucks coffee but remained oblivious to the business opportunities!)

Those who are clueless Some people are serious about going into business but haven’t decided on the business yet. If you’re one of these people and you’re looking for ideas . . . you probably need to look further than this chapter, or even this book.

So here are some suggestions about where to look for an appealing business start-up idea. To get a business idea in the first place, you can Look around the field in which you have work experience to see if any opportunities are waiting to be explored.

Maybe you’ve noticed that customers would be delighted if they could get a specific product or service that no one’s offering right now. Look around a field in which you have play experience to scope out opportunities — a few thousand people’s hobby could become one person’s successful business.

Parlay your love of mountain climbing into an outfitting or guiding business, for example. Take out your pet peeves and look them over. You may not be the only person who wishes someone would make/import/distribute a better pair of dog boots.

Read newspapers and magazines, trade publications, newsletters and online publications to find out what’s going on in the business world. Visit trade shows, inventors’ shows, conventions, or conferences to find out what’s going on in a particular field. Go on field trips (in your own city or town or in the wide world) to see what businesses exist and how they’re doing. Look for government or other lists of licensing opportunities. Ask friends and acquaintances for ideas.

After you have an idea, you need to evaluate it by considering the following factors. What to look for in a business start-up To begin with, try to aim toward something you’ll enjoy doing. Starting a business is hard enough without choosing a business that you’re pretty sure you’ll loathe, even if you think it could make a lot of money.

Next, look for something people want . . . as opposed to something they don’t want, or that they’ll have to be carefully educated to want. It should also be something they’ll want tomorrow and next week as well as today — in other words, don’t base your business on a product or service that’s going out of use or out of style. Ideally, your product or service is something that people want often, rather than occasionally or only once. Especially in Canada, consider offering a product or service that isn’t completely seasonal like skate sharpening or outdoor ice cream stands.

Choose something with a good distribution and advertising system in place:
For example, a product you manufacture should be one that established retailers will be happy to carry; a product you sell should be one that already benefits from a national marketing campaign by the manufacturer; a service you offer should be positioned within a network that will bring you lots of referrals.

Look for a business with a high profit margin. You’d like your direct cost of performing the work or supplying the product to be a small percentage of what you charge the client or customer.
(The service industry is good for high profit margins; manufacturing and extraction aren’t.) What to avoid in a business start-up While you’re searching for a business with lots of advantages, you also have to avoid a business with too many disadvantages.

You’ll probably be happier if you stay away from a business that will be immediately overwhelmed by the existing competition.

If the field is competitive (as are most fields worth going into), look for a niche where you have a competitive advantage (say, because you have a lot of natural talent or you’ve acquired great skills and experience; or because you have exclusive manufacturing or distribution rights).

Don’t go head-to-head with the established players and imagine you’ll knock them down ! You also don’t want a business that will be overwhelmed by regulation — by the federal, provincial, or municipal government — or by the governing body of a professional or skilled trade.

You’ll find regulation in any type of business, but it’s worse in some than in others.
For example, food and drug manufacturing are heavily regulated by the federal government, as are telecommunications and commercial aviation.

If you open a restaurant or bar, municipal food inspectors and provincial liquor inspectors will visit you regularly. Look into the extent of regulation when you research the area of business in which you are interested. We tell you about getting information geared to your specific business in Chapter 2.

You might prefer to avoid a business that will require expensive insurance from the start (this describes most of the professions, and the manufacture of products that are potentially harmful). (See Chapter 12 for more about insurance.)

Helpful hints for aimless entrepreneurs Think about these trendy areas for business start-ups: Become an alter-ego for people who have money but no time.

Be a concierge or personal assistant (do chores for people, like picking up dry cleaning or getting tickets to a show); personal shopper; closet organizer; handyman-for-hire; drop-in cook (shop for ingredients, go to the client’s home and spend a few hours cooking meals for the entire week); or personal dating service operator or matchmaker. Sell the promise of health, youth, and beauty to an aging population.

Be a personal trainer; spa service provider (massage, manicure, pedicure, makeup, facials); a plastic surgery consultant or coordinator; a tattoo artist or tattoo removal specialist or body piercer. Or be a manufacturer of exercise equipment, comfortable furniture, sun-protection clothing, or sports clothing.

Be an outsource for other people’s businesses. Provide telephone and e-mail surveys, market surveys, data processing, technical support, secretarial support, bookkeeping, Web site design, or help in using social media sites.

Go the eco-entrepreneur route.
Manufacture, distribute, or sell ecologically sound cleaning products, recycling systems, or energy sources that are environmentally friendly or recyclable.
Provide specialty travel arrangements.

Organize seniors’ tours, educational tours, eco-tours, or singles’ tours.
Look after other people’s kids, parents, or pets.

Provide a chauffeur service for kids (to get them to school, practices and games, after-school lessons, or appointments); offer dog walking, house-sitting, babysitting (rent-a-parent), or health-care coordination for the elderly; provide tutoring,
keyboarding/typing, music lessons, computer lessons, or test preparation help;
or provide sports coaching, a summer camp program, party planning and preparation,
or a party place.

Unless you’ve got guaranteed access to a big wad of cash, you’ll certainly also want to avoid a business with high start-up costs. You may think you can build a better steel mill, but you can’t do it on a $25,000 loan.

Consider how much you have to invest in starting up a business, or how much you can raise by borrowing. If you have almost nothing to invest and realistically don’t expect anyone else will want to invest a lot in you and your business, choose a business that requires almost no initial investment (that’s usually service).

You’ll probably also want to steer clear of a business with immediate high labour needs. Paying employees isn’t just a matter of cash flow (although that’s pretty important). As an employer, you’ll also have to deal with a lot of regulations and paperwork — such as income tax, Employment Insurance,
Canada or Quebec Pension Plan, provincial workers’ compensation, and occupational health and safety rules — and you may already have enough on your plate.

(See Chapter 15 for more about the responsibilities of being an employer.)
Determining If You Have the Small Business Personality Whatever your reason for wanting to go into business for yourself, and whatever the business you decide to go into, stop and check whether you have the right personality for the adventure before you start. This is true whether you really want to go into business for yourself or whether you think you have no choice but to do so.

And it will give you an excuse to put off figuring out your finances. Realizing that you don’t have the right stuff to run your own business is better done before you sink a lot of time and effort, and maybe even money, into a business.

You can always pursue other options. And if you find you’re not going to be the perfect entrepreneur, but you’re determined to go ahead anyway, then a self-assessment will tell you where your weaknesses lie and show you where you need to improve or get outside help.

An entrepreneur needs most of the following qualities — whether you were born with them, or developed them, or are about to get working on them now:
Self-confidence: You have to believe in yourself and your abilities . . . no matter what other people might think. You have to believe that your success depends on the good work you know you can do and not on matters beyond your control.

However, your self-confidence should be realistic and not induced by whatever weird thing they put in the coffee at your current workplace.
Goal-orientation: You have to know what you want, whether it’s to revolutionize a particular industry or to be home when your children return from school.

However, if your main goals are money, power, and prestige, you probably need to reorient yourself toward something a little more attainable in the small business sector. Drive to be your own boss:
The burning desire and the ability to be your own boss — if you need or even want direction about what to do next, you won’t make it in your own business. You have to be able to make your own plans and carry them out.

Independence: The ability to work independently rather than as part of a team. You’ve probably had propaganda pounded into your head since you were a kid that teamwork is really important, and maybe even better than working on your own. It isn’t if you’re an entrepreneur. Survival skills: The ability to survive without a social group is handy.

When you start up your own business, you’ll probably be working by yourself for some time. If you need people around you to chat with, or else you start to go crazy . . . then you may go crazy. People skills: Even though you have to be able to get along without being surrounded by people all the time, you still have to get along with people.

You’ll be dealing directly with customers and clients (see Chapter 13), investors
(see Chapter 9), suppliers (see Chapter 14), associates (see Chapter 6), and employees
(see Chapter 15), and you need their willing cooperation. Determination and persistence:
You have to want to succeed, and you have to plan to succeed and keep working at succeeding. It’s that “fire in the belly” stuff you hear about from people who look like they haven’t slept in the past eight months.

Self-discipline: You can’t let yourself be distracted from your work by nice weather, phone calls from family and friends, earthquakes, or wrestling matches on TV. Reliability: You’ll build most of your important business relationships by always meaning what you say and doing what you promise.

Versatility: You have to be prepared to do many different things in short periods of time, probably constantly switching from task to task. Creativity:
You have to want to do something new or something old in a new way. If copying what someone else is already doing is the best you can manage, you may not go far.

Resourcefulness: Creativity’s country cousin, resourcefulness, means being prepared to try different ways of doing things if the first way doesn’t work.

Organizational talents: You’ll be plunged into chaos if you can’t organize your goals, your time, or your accounts, to name just a few things.

Risk-management instincts: You have to be able to spot risks, weigh them, and come up with a plan to steer around them or soften their impact in case of a collision.

(See Chapter 12 for some help in managing risk.) Nerves of steel in a crisis: Nerves of granite, titanium, oak, and so on are acceptable. Nerves of rubber, talc, or pasta al dente are not. Crises won’t necessarily be frequent, but they will occur.

Don’t count on gin or prescription drugs to stiffen your spine during a crisis.
And you can’t collapse until the crisis is over.

Pick-yourself-up-itiveness — a combination of optimism and grit: You’re going to have failures, some of them caused by your own mistakes; and you have to see failures as valuable experiences rather than as signs that you and your business are doomed.

Opportunism: You need to not only recognize opportunities when they come along, but you also need to seek them out — and even create them yourself.

Success-management instincts: You can’t let yourself be bowled over or lulled by success. You have to be able to see each success as a platform on which you can build your next success. (See Chapter 19.) Objectivity: For a business owner, it’s always reality-check time. You have to have the courage to stare down reality’s throat and acknowledge your own mistakes.

You also have to corner reality by getting feedback about your business and how you run it from customers and clients, suppliers, professional advisors, competitors, employees, and even your mother-in-law. Then you have to have the strength to make necessary changes.

That’s a long list! And you’ll also need a Zen-like calm about not having a regular paycheque. Not only will you not get a bank deposit once a month, but you won’t get paid for sick days, personal days off, or days when you show up at the office but are too zonked to work. In addition, it helps if your parents (or close relatives or close friends) are or were in business for themselves.

You may have absorbed some business know-how from them, plus you may have easy access to advice. And to finish you off, good health and physical stamina can do an entrepreneur no harm. The small business personality aptitude test When you know what an entrepreneur is supposed to look like, hold the mirror up to yourself. After years of laboratory and field research, we have created the Kerr & Kurtz Not-Particularly Standard Scale of Aptitude for Entrepreneurship and a test to peg you on the scale. Take the test now.
Scoring: Unless scoring is otherwise indicated in the question, award yourself 0 points for each
(a) you choose; 1 point for each
(b); 2 points for each
(c); and 3 points for each
(d). The total number of points you can score is 49.

1. At school, when you were urged to show team spirit and join a team or production, you a) Enthusiastically tried out for everything because you loved working on a team or in a group. b) Tried out for a couple of teams or productions that you really wanted to be on. c) Tried out for something to avoid being harassed by the team-spirit police. d) Made gagging noises and said you’d rather eat bugs.

(Give yourself an extra point if your answer is “none of the above,” but you offered to manage one or more teams or productions on the condition that you received a percentage of any revenues.)

2. You’ve arranged to meet a friend to see a movie.
You a) Wouldn’t hesitate to cancel at the last minute if something better came up.
b) Would show up but wouldn’t worry about being on time.
c) Wouldn’t worry obsessively about being on time, but if you were late, you’d try to have a good excuse ready (whether true or not).
d) Would show up at exactly the appointed time, if not earlier . . . unless the friend is someone who would choose (b) — sometimes choosing realism over reliability is okay.

3. You’re preparing for a dinner party. At practically the last minute you go to the grocery store, armed with a list of necessary ingredients. Because you’re in a hurry and aren’t paying enough attention, you buy some wrong ingredients. In fact, they’re so wrong that you won’t be able to make the main course you had carefully planned.

You a) Are filled with despair at your own incompetence and stupidity, so you call up your guests and tell them the party’s cancelled.
b) Serve dinner without a main course and hope no one will notice.
c) Assume everyone’s coming for your company rather than your food, and replace the main course with tinned spaghetti from the back of your cupboard.
d) Create a new main course from whatever ingredients you have on hand, refuse to admit even to yourself that it tastes funny, and keep the wine flowing.

4. You’re in your kitchen. Just as you see that a pot on the stove is about to boil over, the phone rings, the doorbell chimes, and in another room your printer starts making noises that signal a monumental paper jam.
You a) Black out from stress.
b) Answer the phone and ignore the door, the stove, and the printer.
c) Go to the door and ask whoever’s there to take the pot off the stove and answer the phone while you take care of the printer.
d) Take the pot off the stove, take the phone with you as far as it will extend toward the printer, stop the printer from destroying itself, and then open the window, stick your head out, and yell “Who is it?” to the person at the door.

5. In your household, a dishwasher storm trooper insists that the dishes always be loaded in a particular way.
You a) Obey the storm trooper’s orders to the letter.
b) Assure the storm trooper that you load the dishwasher according to the rules, but always make a point of putting some of the silverware in the wrong way up. c) Get into constant arguments with the storm trooper about the correct way to load the dishwasher. d) Are the storm trooper. 6. When a home appliance you’re using for a necessary job breaks down, your reaction is to a) Head for the nearest coffee bar for a double-double-mocha-java. b) Kick the darn thing to terrorize it into working again.

c) Ignore the “CAUTION! OPENING THIS PANEL WILL LEAD TO RISK OF ELECTROCUTION!” label, insulate yourself, and poke around in the hope you can get it going. d) Take it in for repairs, but use all your skill to negotiate a one-hour turnaround time or a free replacement while the repairs are being carried out.

7. You’re driving in heavy traffic on the highway and your exit comes up suddenly. You’re not in the exit lane.
You a) Quickly pull into the exit lane without checking, assuming that all other drivers are on alert for idiots like you and will be able to react in time to avoid crashing into you.
b) Go on to the next exit, even though you’ll end up driving some distance out of your way.
c) Quickly check the lane you want and calculate that you can safely change lanes if you accelerate through the change instead of braking or maintaining your present speed, and as long as no one in the exit lane changes speed.
d) Were already aware of traffic all around you because you habitually keep a 360-degree watch when driving, and you calculate that you can change lines safely if you slow down and pull in behind the car currently beside you in the exit lane.

8. You’re in a store on a major shopping spree.

When you hand your credit card over to the sales clerk, he runs it through the machine and says, “Sorry, the machine isn’t accepting this card, you’re over your credit limit.” You give the clerk a different card and it gets rejected, too.

You a) Abandon your purchases and flee the store, terrified you’ll be arrested for a criminal offence.
b) Ask, in a dignified way, if the store will put the items away for 24 hours while you get the matter straightened out — and then never return.
c) Ask to use the store’s phone to call up one of the credit card companies and see if you can get your limit raised.
d) Offer to write a cheque, using your credit cards as ID.

9. On a shopping expedition, you find two similar products, except one is on “special” and considerably less expensive than the other.

You a) Buy the cheaper one because the store says it’s a good deal.
b) Buy the more expensive one because things that cost more must be better.
c) Snag a passing sales clerk and ask if he can tell you about any difference between the two products, and base your decision on that information.
d) Don’t trust a salesclerk to know the product line he or she sells, so you carefully compare the two products for quality, manufacturer’s reputation, and (as applicable) fit, range of use, warranty, and so on, and then base your decision on all of these factors.

10. If a service person is nasty to you without provocation when you’re trying to buy something you really need right now, you say,
a) “Forget you; I don’t need to take this,” and leave without making the purchase.
b) “I want to talk to your manager, buster.”
c) “Hey, whatever’s eating you isn’t my fault; can’t you be a little more pleasant?”
d) “Looks like you’re having a bad day; I hope I’m not doing anything to make it worse.”

11. If we asked you to drop by next Tuesday to organize a DVD collection gone wild, you would
a) Immediately call up your dental surgeon to make a Tuesday appointment for that root canal she said you needed.
b) Show up, square the piles of DVDs, and maybe blow some of the dust off the cases.
c) Come and line up the DVDs against the wall in alphabetical order.
d) Arrive early, your eyes glowing with enthusiasm, sort the collection into drama, horror, musical, comedy, and classics, sort each category alphabetically by director, lead actor, or title, and then by release date.

12. You’re working on a project.
The radio is playing quietly in the background.
At what point are you distracted from your work ?
a) As soon as you sit down. You immediately get up and change stations — why wait for a distraction to happen when you can distract yourself ?
b) When you hear a song you really like.
c) When the news comes on, and the announcer says that police have surrounded your immediate neighbourhood because of a bomb threat.
d) When the radio suddenly explodes.

13. You make a request based on a plan you’ve thought out, and are refused.
When you don’t instantly vanish, the person to whom you made the request says,
“What part of ‘No’ don’t you understand ?” Your automatic response is to
a) Burst into tears.
b) Apologize politely for taking up the person’s time.
c) Go and ask someone else.
d) Explain your request again, leaving out the big words.

14. On Monday morning, you
a) Look back fondly on the weekend, which you spent with your pals from work.
b) Look forward to getting in to work so you can chat with your co-workers whom you haven’t seen since Friday.
c) Exchange civil conversation with your co-workers for a few minutes about how the weekend went.
d) Politely answer “Fine, thanks” to anyone who asks about your weekend, and then get down to business as quickly as possible.

15. One minute before you are to start an important presentation in front of several dozen people, you bend over to pick up your notes that fell on the floor, and your pants split up the back seam. You don’t have a jacket with you, your shirt isn’t long enough to cover the rip, and you don’t have time to look for a concealing garment.

So you a) Sidle out of the building and later mail in a letter saying you quit your job.
b) Persuade someone you meet while hiding out in the washroom to go and say that the presentation is cancelled.
c) Enter the room, keeping your back to a wall, and deliver the presentation sitting down.
d) Begin your presentation by cheerfully announcing that you’ve ripped out the seat of your pants. (If you would then turn around and flash your underwear at the audience, deduct a point — you’ve gone beyond self-confidence to exhibitionism . . . and this is especially true if you’re not wearing underwear.)

16. You’ve been ordered to travel to another city on business.
This trip is the last thing in the world you need or want to do, but you have no choice.
So you go, but
a) Sulk before, during, and after the trip, and swear you’ll make them all pay for sending you.
b) Resign yourself and do the best job you can.
c) Look on the trip as a break from your routine — when you get back, your daily grind will seem great in comparison.
d) Investigate what personally rewarding activity of your own you can work into the
trip — such as a meal at a good restaurant, a visit to a museum or spa, or a reunion with an old friend. So after taking the test, how did you do ?

In case you’re feeling shy, we’ll encourage you by telling you what we got on the test.
One of us got 36, and the other got 28 and 39 (she’s a Gemini and she took the test twice; once for each side of her business personality). We’re not revealing which one of us got what. Some cosmic mysteries must persist, even in business. Our scoring system, as you might guess, is completely unscientific; but use these ranges to interpret your score: 48 (or 49) points: You’re kind of scary.

A year from now you’ll probably send us a terse e-mail telling us where we got this book right and where we got it wrong, and mentioning as an afterthought that the business you started after taking our questionnaire is now worth $1.7 billion! 40 to 47 points: You probably won’t get around to sending us the e-mail we discuss in the previous bullet for two years.

30 to 39 points: You’ve got a bit of work to do on some aspects of your business personality, but being an entrepreneur for a while should take care of that — you learn pretty quickly when your livelihood depends on it! 20 to 29 points: You’ve got potential — but think entrepreneurship over very carefully before you take the leap! 10 to 19 points: Keep your day job. 0 to 9 points: You may actually be a small furry rodent, and you should be nibbling this book, not reading it.

As for our scores, we’ve both run small businesses on and off for the past 25 years. Either this means we shouldn’t be in business, or it means you don’t have to score high on our test to do okay in the business world.

Or else it means that tests don’t mean much. Or at least this one doesn’t. If you’d like to try a more serious test, have a look at the free online entrepreneurial assessment provided by the Business Development Bank of Canada. (www.bdc.ca); select Tools, then Entrepreneurial Assessment.

Considering Other Factors before Starting Your Business Even if you’re a potential paragon of entrepreneurship, think about the following before leaping into business for yourself:
Would your personal life allow you to take the entrepreneurial plunge right now ?
Do you have the practical resources to go into the particular business you have your
heart set on ?
Is this a good time (for economic and market reasons) for anyone to go into this particular business ?
Your personal life What’s going on in your personal life right now ?
Starting a small business makes more sense at some times than at others.
Think about the following questions:
Do you need a steady income right now — maybe because you have small children and your spouse has given up paid employment to stay home with them,
or because you have debts to repay ?
Do you need a steady and conventional lifestyle right now because all hell is breaking loose in the rest of your life ?

Do you need to be physically present in your home more (maybe because you want to spend time with your young children after school or you have to look after an elderly parent), so a home-based business makes more sense than working outside your home ?
Do you have some money to throw around right now, perhaps from an inheritance or a buyout package from your employer ?
Would you have trouble raising the necessary cash to start a business — say, because you’ve just gone bankrupt ?
If you have a spouse, or someone who depends on your income or companionship, ask him or her to list the pros and cons of your going into business for yourself right now — from his or her own point of view.

You might as well get it all out in the open.
Your practical resources Do you really have what it takes to start this business ?
Ask yourself now, before you invest time, money, and effort and maybe pass up other work or opportunities for which you’re better suited.

For starters, if you go into any business, you’ll have to Find customers; identify customer needs; develop new product and service ideas; decide on prices; and develop promotional strategies.



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