Mind your own business

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"I had kind of taken a break from the rat race, instead working at home full-time with children," Vassart says. "A year into that, Crystal and I were chatting about, 'What do we do once are kids are getting older? Do we go back to the 9 to 5?'"

Vassart always had in the back of her mind she would like to run her own business, but she had no idea just what that enterprise might look like.

As it turns out, Anderson had just the idea. A little more than a year later, Supper Central opened in southwest Winnipeg, where customers can prepare gourmet dinnertime meals onsite without having to worry about the grocery shopping, the chopping, dicing and slicing, and the cleanup afterwards.

Importing an already well-established concept in the United States, Vassart and Anderson opened the small business at the beginning of March and so far, business has been growing steadily.

At a time when many major corporations are shedding jobs to offset shrinking revenues, Vassart and Anderson aren't the only Canadians looking at becoming their own boss.

In April, the Canadian economy gained 36,000 full-time jobs, due in large part to the 37,000 increase in workers who reported themselves as self-employed.

It's a familiar theme during hard times, says Shannon Coughlin, director of the Canada/Manitoba Business Service Centre (CMBSC), which helps small business startups in the province.

"If people can't find a job, they tend to try to make themselves a job," she says. "Maybe some people have already had that dream to start their own business, and losing their job is the impetus, or they've lost their job and been given a buyout, so they have that little splash of cash to get them going."

Regardless of the reasons, starting up your own business radically alters your personal finances, and before heading down a potentially ruinous road to the poor house, Coughlin says you're advised to do your homework before bucking up a heap of cash or risking assets like your home -- often the bottom line for many startups.

"If you are thinking of going into business for yourself because you think it will give you more time on the golf course, I have to inform you that you have been misinformed," she says.

A great idea for a business is essential, but you truly don't know whether it's great until you've begun a business plan.

While it may seem like jumping the gun to immediately start on one before even seeking out advice, Robert Warren, executive director of the Stu Clark Centre for Entrepreneurship at the I.H. Asper School of Business, says it's the best way to see if the idea has legs.

"I always tell people the business plan is really more of a sober second thought," Warren says. "What it forces you to do is take that idea from a concept and put it into some sort of concrete terms."

Plans can range from 10 to 400 pages long and cover just about every facet of a potential business, including costs, funding, competitive advantages and even the disadvantages, too. Most people can't simply write up a plan by themselves and need help, Warren says, adding the CMBSC is a good place to start. But they must go through the painful process of writing the plan themselves.

"People investing money don't want a professional to write it," he says. "They want to see the entrepreneur write it, because when they get you in to answer questions, they want you to be able to answer them."

Securing funding, of course, is the biggest determining factor in getting a fledgling business off the ground. More often than not, it's up to the would-be entrepreneurs to come up with capital of their own -- particularly if they're opening a restaurant or retail venture.

"You have to assume that if you are going into business, to start off, you will have to put your house up," Warren says. "You will end up signing a personal guarantee. That means if the business goes under, they are going to come after you."

Vassart says starting their business did involve digging into their personal savings, including home equity, to get their business off the ground.

"When you are securing your business -- from a personal standpoint -- there's always that risk, that apprehension," she says. "You have to make sure that your business plan is secure and that you are confident in it if you are going to personally sign anything away."

With the help of the CMBSC, they were also able to secure a $20,000 low-interest loan under the Business Start Program from the province.

"We were able to obtain it two months prior to opening, so that was very helpful because that time was the biggest crunch on the pocketbook, because we started to purchase everything for the business," she says.

Outside of that program, operational, day-to-day funding is difficult to find, Coughlin says. Most lenders -- private or government-sponsored -- are often more willing to provide money to cover the cost of assets like equipment and machinery, but money to cover wages, legal fees and rent can be tougher to come by from sources other than the business owners themselves.

Still, business officers at the CMBSC, a free resource for entrepreneurs that is funded by the provincial and federal governments, will do their best to help aspiring entrepreneurs.

"If there are grant programs out there that would make sense for them to apply to, we will find those programs for them," Coughlin says.

Depending on the type of business, funding needs can vary greatly. Some enterprises merely involve a desk and a phone while others, such as technology development ventures, can require millions of dollars in funding before a product is ever sold, she says. Small businesses cover such a wide spectrum of needs and costs, a would-be entrepreneur cannot fully grasp what they will be until the concept has been fleshed out. It takes time and effort, she says, but the planning process pays off even if you realize it's a venture not worth pursuing.

"You want to find out if it's the business for you, but you also want to find out if it's viable," she says. "When I talk to people about doing a business plan, I tell them I'm not making them do it to put them through the process, but to make their mistakes on paper instead of with their wallet."

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Do you have what it takes to start your own business?

We all dream from time to time about throwing off the yoke of wage slavery, but to quote the redneck minstrel Toby Keith, "Freedom don't come free." The following is a list of points to consider when planning your future as a captain of enterprise.

"ö Can you be your own boss? Most small business owners will tell you they work more hours, for less money than when they worked for someone else. Being your own boss means taking responsibility when things go awry. But it's not just you who suffers when you make a bad business decision. It's your family, employees, customers and creditors.

"ö Why you? You need to bring a skill set to the table. If you want to open a restaurant, you need to ask yourself if you have the experience. The more experience you have in your area of interest for a business, the more likely your venture will be successful. Of course, it's not all over if you lack experience. It just means you'll have to work all the harder. Grit, creativity, a keen interest in the field of business and determination can go a long way on the road to success -- just remember to temper that moxie with the humility to seek help when you need it.

"ö Why this business? Besides determining whether you are a good fit for your business, you need to figure out if the world needs your business. Without a market, you have no business. You need to look at the marketplace, not only evaluating the need for your potential products and services today, but also in the future. Innovation, technology and fads all have an effect on a business's success.

"ö Against the odds: Most small businesses fail in the first three to five years. Yet many people are undaunted, all the same. Ventures that manage to make it past five years are often successful due to the ability of management. Good management expects the unexpected and prepares for the worst. A well-managed small business can often adjust to changes in the marketplace with more ease than larger corporations because they can change direction much more quickly.

"ö Do you have the money to match? Your will may be strong, your idea may be great, but do you have the money to back those up? You may need to buy equipment, inventory to sell, property and other hard assets. In some cases, the BDC (Business Development Bank of Canada) will help you secure a low-interest loan for these. But you also need operational capital, which lenders are much less inclined to fund. While it's not absolutely necessary, a fat bank account, well-endowed home equity and other personal assets will go a long way to getting your business off the ground. The downside is that it's your money -- not other people's money -- that's on the line. Even with deep pockets, most small business owners need outside financial help, and their relationship with bankers and other creditors is critical. Remember, bounced cheques and missed bill payments are not the best ways to win their financial affection.

-- Source: Canada/Manitoba Business Service Centre

Republished from the Winnipeg Free Press print edition June 7, 2009 C7