As the market continues to explode with new technology start-ups, having a solid foundation while establishing your competitive edge is more important than ever. To succeed in this sector, entrepreneurs are ruthlessly competing for capital, resources and patents to get their ideas to market.
So how do you stand out from the crowd? You’ll need a jumpstart and here are 10 ideas to get you going:
1. Look beyond the scope of your idea.
Take a step back to consider how your product or service will fit into the marketplace. Allow yourself time to assess and research the industry and the competition. This extra time is key to understanding what you’re up against, what makes you different and how you can be better.
2. Develop a go-to market strategy.
You have a great product or idea but how do you get people to buy it? Map out your objectives and how you plan to achieve them. Define who your end user is and how you’ll differentiate your company from the competition. Be sure to consider who your strategic partners are: VCs, consultants, peers and Export Development Canada to name a few.
3. Establish an ownership structure.
To avoid crippling your company with disagreement between founders down the road, mitigate this risk early on. Determine what style of ownership suits your business best and how it will impact your corporate and personal goals. Will there be silent or active investors? Will you be the sole decision maker? What are the tax implications to restructuring down the road?
4. Get a handle on record keeping and compliance.
Owning a business means satisfying government and legal requirements. It’s essential to have basic compliance set up for your operation. Your company may need to register for things like:
• Corporate income taxes
• Sales taxes (GST/HST)
• Provincial income taxes
• Payroll remittances (employee income tax, Canada Pension Plan, Employment Insurance and Employer Health Tax)
• Workers compensation programs (WSIB)
Remember that doing business in provinces (or countries) other than where your head office is located may also require you to obtain registrations in other jurisdictions.
5. Don’t go it alone.
Establishing a support team is vital. You need to have a group of advisors — such as bankers and lawyers or your accountant — who can help you with:
• Recording your transactions
• Accounting software recommendations
• Patents and trademarks
• Shareholder agreements
• Protecting your IP
• Financing
• Cash flow management
• Forecasting and projections
• Financial statement drafting and best practices
6. Cash is King.
Always remember that strong cash flow management supports successful growth and ability to reinvest in your business. It’s important to take a careful look at what financing is available. Along with your advisors, carefully consider the availability of financing. It can take many different forms including:
• Boot strapping/Sweat equity
• Friends and family
• Government grants and incentives
• Angel investors or VCs
• Bank loans
7. Take advantage of government incentives.
The federal and provincial governments have many programs specifically designed to assist technology companies from the early development to growth stages. SR&ED credits, IRAP, Fed Dev and Digital Media tax credits are all programs worth looking into.
8. Assemble your dream team.
Hiring and retaining the best talent is critical to getting any company off the ground. Highly qualified and motivated people will want to know whether they’ll get equity in the company or stock options, what benefits they’ll receive, what the workplace culture will look like and what the bonus and development structure is.
9. Financial statements tell your story.
As the owner, it’s important to present the right story with a clear-cut financial statement and ensure that you understand what it all means. Implementing strong processes like budgeting, forecasts, reporting, and controls over cash coming in and going out will give you the insight to make timely and informed decisions.
10. Don’t be afraid to pivot.
With the tech sector evolving so rapidly, companies in this space often need to change the course of their business plan. It’s key to recognize this sort of situation and “fail fast” so you can start looking for new opportunities to disrupt and innovate the market.
With countless companies launching each day, it seems everyone is coming up with the “next best thing”. But turning your idea into a viable and successful start-up business will take competitive edge, creativity and most importantly, a solid business plan.
This article has been prepared for the general information of our clients. Specific professional advice should be obtained prior to the implementation of any suggestion contained in this article.
