You and Your Ideas - Taking Stock and Getting Started

Are you an entrepreneur?

Starting your own business can be exciting, with thoughts of independence and financial rewards. But entrepreneurship is not for everyone. Determine first if you have what it takes. Talk to other entrepreneurs, read books and take courses on the subject. Self-evaluation, planning and research are critical first steps. You will also need the finances to start and sustain your business organization until you can earn a profit.

Looking for ideas

Most people can find ideas for starting a business in three places:

Job

Prior work experience is a common source of new business ideas -- you are already familiar with a product/service, the competition, and potential clients. You might become a consultant, or develop a product/service you can sell to (or is similar to) your former employer. However, consult a lawyer and follow all legal requirements. Obey all signed agreements and competition rules, as well as regulations regarding patents, trademarks, and proprietary rights.

Hobbies

A favourite hobby can lead to a new business venture. However, profit margins in these operations tend to be quite low, as hobbies are typically activities that most people are prepared to do at their own expense.

Observation

Simple observations of daily life (especially when travelling) can spawn new business ideas. You can also conduct a deliberate search for ideas. Visit the Canada/Manitoba Business Service Centre, other agencies and libraries; attend trade shows/conferences; contact patent brokers; talk to friends and associates.

Trends and opportunities

Dynamic changes are taking place in our society, economy, and everyday life. Technology has propelled us into the Information Age, and businesses now compete on a global scale, not just within their own communities. Understanding these changes is critical to assessing new business opportunities.

Ten trends in the Canadian consumer market have been identified. Although some of these may seem contradictory, they can refer to distinct target markets depending on particular products or services (referred to as 'items' below).

Cocooning- The desire to relax at home, with an emphasis on eating/entertaining. May increase demand for items such as home security systems.
Convenience -The desire for convenience will increase demand for all sorts of time-saving items such as quick-serve meals and catalogue/on-line retailing.
Attractive aging -The desire to age gracefully. May fuel demand for items such as anti-wrinkle creams, cosmetic surgery, flattering clothes.
Wellness -The desire for health, fitness, and positive lifestyles from a population that is aging and living longer. Demand will increase for items promoting exercise, nutrition, and environmental-friendliness.
Concern for quality -The desire for overall lasting quality, rather than looking at price only. Especially for those seen as 'Yuppies' when buying homes or cars.
Personal services -The desire to buy services that one is unwilling or unable to do oneself.  Examples include house-sitting or home-delivery of gourmet meals.
Exotica -The desire to indulge in personal, leisure, and entertainment purchases. When discretionary incomes increase, especially amongst older consumers, demand will increase for items such as exotic holidays.
Maintaining tradition - The desire to return to a sense of tradition after a decade of the 'me' generation. Will be reflected in purchases and how people spend their time.
More customization - The desire for reasonably-priced items tailored to a buyer's exact specifications.  Examples include homes, cars, and even perfumes that reflect the consumer's individuality.
Affordability- The desire for items that offer good value at affordable prices. Already evidenced in the recent growth of discount and off-price retailing.

Evaluating Your Idea

Test your business idea against the 19 factors listed below that describe an 'ideal business'. Although very few ideas conform precisely to all 19 factors, the more deviations you discover, the more difficulties and risks you may encounter.

This framework was designed by Richard Bursick of the University of Southern California. For more information, contact the Canada/Manitoba Business Service Centre.

Protecting Your Idea

Certain business ideas must be protected. Contact the Canada/Manitoba Business Service Centre 984-2272 or toll free at 1-800-665-2019.  In brief:

Patents -  Protect your rights as an inventor by preventing others from making, using or selling your invention (usually a technological process, structure, or function).
Copyrights - Apply to literary/artistic/dramatic/musical works and computer software. The owner is the only person who may copy the work or permit others to do so.
Trademarks- A word, symbol, design, or combination of these that distinguishes the wares or services of one person or organization from others in the marketplace.
Industrial Designs - The shape, pattern or ornamentation applied to a mass-produced article, such as the shape of a table. Can be made by hand, tool, or machine.

Ways of getting started

Start new-  Starting from scratch gives you the freedom to run the business your own way. However, you must do a great deal of planning; you must create your own product/service, suppliers, and customers; and you may find it more difficult to obtain financing for an unproven product or idea.

Buy existing -  Buying an existing business allows you to acquire an already established product/service, suppliers, and customer base. However, find out the real reasons why the business is being sold. Talk to customers and study the market conditions. Seek the advice of a lawyer and an accountant.

Buy ceased -  You may be able to buy the assets of a ceased business at 'distressed' prices, buy you must rebuild a customer base, and find out the real reasons why the business failed.  Seek the advice of a lawyer and an accountant.

Franchise -  A franchise is a license agreement between you and a franchisor, giving you the right to market a product or service in a specified way, often in a defined territory, and for a fee. This allows you to buy a proven concept, financial control system, and a protected territory.  However, the purchase price and support fees may be high, and you will likely have less control over business policies.  For more information, see the Franchise Guide factsheet.

Insurance concerns

Prior to starting a business, consider three types of insurance:

General-  Insurance on business assets, liability insurance on the premises, vehicles, and products sold, fire, crime and vandalism, business interruption.
Life -Insurance on the lives of the business owners.  Often partners buy insurance on each other's lives to ensure the continuation of the business.
Workers Compensation -  Required by Manitoba law to reimburse lost wages to employees injured on the job.  See the Human Resources - Hiring Employees and Related Regulations factsheet for details.

DISCLAIMER
Information contained in this document is of a general nature only and is not intended to constitute advice for any specific fact situation. Users concerned about the reliability of the information should consult directly with the source, or seek legal counsel.

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