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Prepare to Launch: What to Remember when Starting a Business

What to remember when starting a business

 

One of the greatest aspects of modern eCommerce is how it has become something of an equalizer for entrepreneurs. Building a website or opening an account on an eCommerce marketplace have become so intuitive that, in a few clicks, anyone with an internet connection can effectively be ready to start their own business. Maybe 2022 is the year that you decided to do the same.

At ClickShip, helping businesses succeed is our business. That’s why today we’ll be going over some of the most important things to remember to get your business started off on the right foot.

 

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Understand the Risks, and How to Avoid Them

Recent statistics show that nearly 20% of all Canadian businesses fail within the first three years.[1] It’s a daunting statistic and one that highlights the universal truths about entrepreneurship: starting a business is a risk.

In a recent study from CB Insights, the two overwhelmingly prominent reasons behind startup failure were a lack of market need and a failure to raise new capital.[2] Knowing this, a savvy entrepreneur will know how to prepare for, and mitigate the risks that these sticking points pose.

 

Lack of Market Need

Unfortunately, not every good idea is a new idea, and many entrepreneurs fall into the trap of offering a product or service with which the market is already saturated or where there is no scalable need. This is not to say that it’s impossible to succeed offering something that already exists in the market or that does not have an overwhelming demand. It just means that you need to decide early on how to differentiate yourself from your competition and potentially offer ancillary products and services to capture a greater portion of the marketplace

Market research is key in this. Websites such as Statistics Canada and Industry Canada can provide broader information, while primary research such as online surveys and focus groups can help to better narrow the focus of your brand, and how it differs from potential competitors.

 

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Failure to Raise New Capital

If the old saying “you need to spend money to make money” ever required proof, starting a small business is more than proof enough.

Short-term, starting a business is rarely profitable, with the average business not becoming profitable for two to three years. As such, it’s imperative that having a deep understanding of your operational costs, your expected revenue, and how to offset the former while waiting for the latter to grow to sustainable levels.

Crowdfunding has become a progressively more common way for entrepreneurs to not only secure startup capital, but also to build a starting customer base. In fact, studies suggest that the transaction value of crowdfunding campaigns is on course to see an annual growth rate of 2.45% year-over-year![3]

Best practice is to formulate a business budget that outlines your prospective income, fixed costs, variable costs, and one-time spends in order to predict revenue.

 

Set Up Your Supply Chain

Before setting up the paperwork and moving parts necessary for your business to launch, it is imperative to ensure that your logistical strategy is secure. This involves answering three questions:

  1. Who is manufacturing your product?
  2. What channels are you selling your product through?
  3. Where is the product being stored?

While there are no right or wrong answers to these questions, they are all interrelated. For instance, if you are using a warehouse to consumer model, then it may not only affect which sales channels you use, but also the selection of your warehousing solution.

Similarly, if you are manufacturing your own goods in-house, you may, for a time, be able to forego warehousing costs, and may want to consider 3rd party fulfillment as a long-term growth option.

Weigh the pros and cons of each variable, such as whether to use a dedicated eCommerce website vs. an online marketplace, and 1st party vs. 3rd party fulfillment, and decide which combination best suits your business needs.

 

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Put Everything Down on Paper

Now that you’ve done the homework to make sure that your business is ready to run like a well-oiled machine, it’s time to go through the process of turning your idea for a business into an actual business.

Firstly, it is important to separate yourself from your business, both legally and financially. While it is not legally required in Canada to register businesses that are sole proprietorships that use your legal name as the business name[4], having a registered business will make it possible to open a business bank account, and will make it easier to obtain financial assistance such as loans or grants.

As such, having a business bank account helps not only in giving your business a more professional image, but also helps to keep your business and personal finances properly separated, making it easier to manage your professional finances and stick to your budget. Further, many business banking plans offer services better tailored to operating a business, such as a higher limit on monthly transactions or reduced rates on online transfers.

Finally, before applying for any kind of financial assistance for your business, it is key to have a business plan to submit that outlines what your business will offer, how you plan to run your business, and your financial plan for your business.

 

Build Up the Hype Prior to Launch

You’ve done your research, set up your supply chain, and financially and legally set your business up for success. It’s important to have some sort of marketing strategy in place to secure a built-in customer base ahead of launch.

Now while the prospect of marketing is often the bane of many entrepreneurs, it need not be as timely or costly as you may think.

We spoke about crowdfunding earlier in the blog, and it can be just as effective a marketing tool as a method of obtaining funding. Utilizing paid social ads that direct to your crowdfunding page can help to build momentum and can result in organic marketing though backers sharing links to your page.

Email marketing campaigns can prove wildly effective; in a study by Litmus, Canadian retail, eCommerce, and consumer goods businesses saw an average 45 to 1 return on investment with email marketing campaigns![5]

Now all that’s left to do is pick a date for everything to go live! Make sure you have your business’ social media accounts ready and be as vocal as possible on them to build anticipation.

 

ClickShip Can Help Your New Business Soar

Shipping is arguably one of the most important parts of an eCommerce business, and with ClickShip you can be sure that your business is getting the best shipping around!

ClickShip’s all-in-one, multimode shipping platform gives you the power to offer real-time rates on LTL and parcel shipping directly at checkout, and the ability to choose from North America’s leading carriers, all in one place, and all with zero startup or monthly fees!

Contact one of our shipping experts Monday to Friday, 9am to 5pm EST at
1-877-335-8740 or by email at customercare@ClickShip.com and see how ClickShip can give your business an advantage right out of the gate!

 

[1] https://www.ic.gc.ca/eic/site/061.nsf/eng/h_03090.html#point1-3

[2] https://www.cbinsights.com/research/startup-failure-reasons-top/

[3] https://www.statista.com/outlook/dmo/fintech/alternative-financing/crowdfunding/canada

[4] https://www.thebalancesmb.com/business-startup-facts-2948563#:~:text=Not%20All%20Businesses%20Need%20to,your%20business%20with%20your%20province.&text=In%20those%20locations%2C%20no%20sole,to%20register%20their%20business%20names.

[5] https://www.litmus.com/blog/infographic-the-roi-of-email-marketing/

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