Women in Business:
Part I: Are you a true entrepreneur?
Industry Canada states that over the last 20 years, Canada has
seen a 200% increase in the number of women-owned firms.
By 2001, nearly half (47%) of all small and medium-sized
enterprises in Canada had at least one female owner, and the
numbers continue to rise steadily. Of these women-owned
businesses, nearly half are sole proprietorships.
While there are differences in the ways how men and women
approach and respond to a particular situation, basic tenets
of entrepreneurship remain the same regardless of gender.
A well-developed business plan lies at the foundation, and
a well thought-out business model is critical for the success
of any business.
Writing a business plan is the first step on your way to
entrepreneurship. Before you invest your own money or look
for financing, you need to demonstrate whether it is even
feasible to turn your idea into a business.
A business plan helps you create such a road map. It includes
a description of your competition, an outline of the costs of
doing business, and a forecast of revenues. At the end of the
day, a business must generate profits and maintain healthy
margins to be successful. Simply put, you must be able to
show that within a reasonable timeframe, your proposed
venture will generate revenues that exceed costs, including
owners’ compensation, and provide a healthy residual to
reinvest into the business.
There are a few questions that you must answer in order to
develop a successful business model:
1. o you plan to provide a service or sell a product?
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2. Will it be a brick and mortar business or an online business?
3. re you creating and serving a niche? Is your product or
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service unique?
4. What is your target market? Will you be selling to consumers
directly (Business to Consumer, B2C) or to other businesses
(Business to Business, B2B)?
5. ow do you plan to engage your target market?
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6. ho is your competition and how does your business fit
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in? How would your business be differentiated from your
competition?
7. ow would you make money?
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8. ow long do you plan to remain engaged in the business
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and what is your exit strategy?
Some of these questions may be relatively easy to answer
while others may require in-depth analysis, research and
guidance from an experienced individual or a mentor. You
may also want to consider speaking with a financial advisor
or a business consultant for help.
As with any business venture, there are risks associated with
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– By Ejaz Nadeem, MA, CFP, CLU
starting your own business. A prudent
entrepreneur is aware of, and plans to
avoid or mitigate such risks, in order to
succeed in their planned business venture.
Following are five common risks faced by start-ups:
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1. ot enough start up capital to begin with: Your business
plan will help you quantify the amount of start-up capital
needed to get your business up and running. Some people
make the mistake to start their business without necessary
cash in the hopes that things will eventually work out.
Needless to say, the majority of such businesses fail in a
very short period of time.
2. Spending all the money with very little to show for it: This
is the greatest fear many entrepreneurs have. It could also
be catastrophic for the survival of the business. Regardless
of the amount of cash available at the start-up stage, it is
prudent not to spend any money on the business venture
until you design and put in place a solid business plan.
3. Poor hiring decisions: People are the most valuable assets of
any business. Your business is only as good as your people,
and many times they can make or break an organization.
Many business owners are too focused on getting the
business off the ground, and lack time and skills to find
the right people. Frequent turnover in employees at the
start-up stage not only increases the cost but it also sends
the wrong message to customers and potential clients, with
serious negative consequences for the business.
4. nability to make adjustments: Even the best laid plans
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require adjustments and, sometimes, change of course. A
big risk for start-ups lies in the inability of business owners
to anticipate change and make course adjustments. This
often results in businesses going down the path of no return.
5. Growing too fast: This risk is seldom considered by start-ups.
It is often classified as a “good problem” to have. It is alright
to grow at a faster pace; however, business owners must have
their hands on the pulse of the business and must know
their limitations to keep up. Failure in this area will result
in promises remaining unfulfilled, unsatisfied customers
and the business eventually coming down to a crash.
In summary, if you have a great business idea, a solid business
plan, a well designed business model, a great team to execute
the plan and a clear understanding of the risks associated with
starting up a new business, you too could become a successful
business entrepreneur – regardless of your gender. •
Ejaz Nadeem, MA, CFP, CLU, is the Managing Director for
FirstOntario Investments, a Certified Financial Planner and a
Chartered Life Underwriter. To contact Ejaz or his team of
professionals please call 1-800-616-8878 or email
[email protected]
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