Becoming an entrepreneur in Canada is definitely the most exciting job someone can have. You become your own boss, making the decisions, in order to further our country and further your own career. However, with multitudes of businesses starting every single month in Canada, there are so many failures.
Small businesses due tend to fail during the first five years of business because of a variety of reasons. The good news is a lot of these reasons can be avoided by simply researching ahead of time and having a firm plan on how you are going to grow your business with your long-term vision/goals.
The Main Reasons Small Businesses in Canada Fail
Probably the biggest reason small businesses in Canada fail is the fact that too many do not raise enough capital to keep it going for the first few years. Raising capital is integral to a small businesses’ early success because you simply cannot expect to make huge profits while just beginning to gather clients and sell your product or service.
Almost every small business in Canada takes a loss for the first couple years at least because it takes a bit of time to get your foot in the door and become a business the average Canadian can rely on. So many entrepreneurs get so excited about their business that they just want to dive in right away, before they have raised enough money (capital).
A year down the road, they will realize that was a huge mistake and be forced to close their doors. At Canada StartUps we offer both a large funding database of 1500 grants across the country that will help you raise capital. As well there is an Investor PitchDeck tool, allowing you to further your goal of raising enough capital.
There is no shame in reaching out for money at the beginning of your business, because people want to invest in a great idea that they can feel confident of making their investment back!
Another reason why small businesses in Canada fail is due to a huge lack of planning.
There are so many entrepreneurs that initially roll their eyes at the thought of creating a business plan. They just want to start and get the money rolling without having to sit down at a computer, punching in mission statements and crunching the numbers. However, if you do not have a business plan you are setting yourself up for failure. A business plan allows an entrepreneur to set out goals for the year and know exactly how many sales they need to make in order to break even.
Business plans also serve as an entrepreneur’s credibility and opens up the doors to Government Funding and additional grants by province and federally.
Canada StartUps offers a Business Plan Builder tool that will allow beginner entrepreneurs to create a professional business plan even without prior experience. We offer these tools in order to create successful new small Canadian businesses and help them avoid failure.