Success in a small business depends to a large degree upon the preparation that you do before you start. Obtaining the physical things that you will need is usually the easiest and most enjoyable aspect of starting your business. It’s like shopping for school supplies for the start of a new school year.

 Once you have decided upon the type of business that you will run and are satisfied that you will probably be able to attract paying customers for your goods and services, you can go shopping. Provided you stick to a budget, you can buy whatever you need and want to set up your office: furniture, telecommunications services and equipment, computer equipment, and so on. You might even be able to claim some of your home occupancy and automobile expenses against your taxes. And speaking of taxes, make sure that you are registered with appropriate government departments.
 
Just as no two individuals are alike, no two businesses are alike. Before you start shopping for standard items, make sure that you have added any special items or equipment to your list. 

Make Sure That You Will Have Customers

Successful businesses are customer driven. This means your business must be based on your ability to meet other people’s needs, not on your own skills and resources, regardless of how impressive they might be. Before starting to plan your business, review Chapter 3 and make sure that you have identified specific products or services that you can sell and, even better, that customers will buy.
 
Once you have identified what your customers need and want from you, and satisfied yourself that you can meet these needs and wants, you must determine what you will require to operate your business. The following material business depends to a large degree upon the preparation outlines some standard requirements. Add to this list any specific requirements that you might have.

Planning Your Business

Although all businesses try to flourish, few succeed in the long run without a business plan. The development of a business plan is set out in further detail in the next chapter. Below are some aspects to consider when thinking about writing your plan.

Business Name

 If you carry on business using just own name, you are not required to register your business name. Thus, if your name is Tasha Mathias, you can simply call your business “Tasha Mathias” and use that name on your stationery, promotional material, invoices, and so forth. Obviously you can deposit any cheques payable to you in any bank account bearing your name.
 
However, if you carry on business under a name that is not your own, such as “Tasha Mathias Services” or “Tasha’s Services” you must register the name with the appropriate government department. Registration is usually a very simple process. You can and should do it yourself. (See Appendix B for lists of the registration requirements for different provincial and territorial jurisdictions.)
 
In selecting a name for your business, choose a name that accurately reflects your services. This will assist you in your marketing activities.

Setting Up Your Office

Space

Regardless of what they sell, all businesses need office space in which the owners can complete and store paperwork and records. Most business premises include some office space, although in many instances, the designated office area would be better suited for use as a broom closet.
 
Because there is limited office space in business premises, or for reasons of security or convenience, or because the business is home based, many owners establish office space in their homes. In deciding where to locate your home office, select the office space that you think will be comfortable for you and those around you.

Building Block

If used primarily for business purposes, your home office space is a tax-deductible expense. Simply calculate the percentage of the total floor space of your house that your office occupies. This percentage of house occupancy costs—including taxes, utilities, and maintenance—becomes a tax-deductible expense. Check with your accountant or tax advisor for further clarification.

 Furniture 

Since they are experts at doing more with less, many small business people are also innovative recyclers. The first act of recycling usually involves cleaning up an old desk or table to use as a workspace.
 
Unfortunately, this approach fails to recognize the realities of modern businesses. Not all desks and chairs are suitable for computer use, for example.
 
Specialized computer desks are readily available from most furniture retailers. In most cases, however, these units are overpriced and  nattractive or too big for small home offices. The one-size-fits-all school of furniture design seldom works in home offices.
 
Standard tables with 67-centimetre (27-inch) legs make ideal computer desks. If you will also be using the table as a workspace, you can add a drawer to store the keyboard under the table when you are not using the computer. For more workspace, just place a matching table beside the computer desk and leave the keyboard on your computer desk. This arrangement is low in cost and avoids the bulky appearance of most office furniture. The package is also easy to take apart if you move.
 
Just because your home office is fully computerized, you can’t forget about handling and storing paper. We have yet to see the truly paperless office. Standard file cabinets remain popular choices for storing the paper that we all receive and collect. You can also use the cabinets to store unused paper and extra office supplies.
 

Entrepreneur Beware

Don’t be tempted to use any old chair as part of your computer setup. Use the best adjustable chair you can afford, one that puts you at the height to sit with your arms at right angles to the keyboard and your calves and thighs forming a right angle to the floor when your feet are flat. This will reduce your likelihood of suffering a computer-related repetitive strain injury.

Hot Tip

Many good used file cabinets are available in all sizes and styles, so it makes little sense to buy new. Check the “office furniture” listing in the Yellow Pages to locate sources. Your cabinets need not remain the institutional-blah colour in which you find them. Decorate them to reflect you and your busi-ness—it’s one of the perks of being on your own.

Telecommunications Services

What telecommunications services are best for home offices? The obvious first choice is your current residential telephone line. With touch-tone service you can add Ident-A-Call, which provides you with up to three phone numbers. Continue to use your existing telephone number for family and personal purposes and add a new number for business. You can also add a third number for a fax number. You will also need a ring selector (available from suppliers of telecommunications equipment) that recognizes the fax number and directs incoming faxes to the fax machine. Each number will have its own distinctive ring. Your existing number will ring once, the second number will ring twice and the third number three times. All numbers use the same line, which means that callers to any number will get a busy signal if you are using the line. To avoid a busy signal, add Call Answer, which will take messages while you are on the phone, or away from your desk, or if the fax machine is being used. An extension option allows you to keep business and personal messages separate.

Call Waiting might also be useful. If you are already on the phone, this feature lets you know when you are receiving incoming calls. A soft beep, or a series of beeps that correspond to the phone numbers, will let you know which number is being called. With Call Waiting, you can end a personal call in favour of an incoming business call. Or if you are on a business call and you find out there is an incoming personal call, you can ignore the call, and the Call Answer feature will take a message.

You are unlikely to use the other features that manufacturers like to build into telephones.

A single residential line, although very cost-efficient, has serious limitations. As your business and telephone use increases, your one line will be tied up with business calls and, therefore, will be unavailable for family and personal calls. Also, if you are using a residential line for home business purposes, you are not entitled to a telephone directory listing for your business. This means that customers and potential customers might have trouble finding you, especially if you carry on business under a name other than your own name  
If you run your business from home, sooner or later you will need a separate line for business use. At that point, you must choose between adding either another residential line or a business line. If it is important that your business have its own directory listing, add a business line. Otherwise, just add another residential line. You can add either one to the telephone you are already using.
 
It’s a good idea to place another telephone carrying your new line in your kitchen or some other frequently used place away from your office so you won’t have to run to take a call.
 
With the new line, you can also add an Ident-A-Call number for your fax machine. Use the same number and ring selector (change the setting to reflect the new ring sequence) that you used on your original line. Also add Call Answer service on your new line. This will allow you to use the same line with a fax and modem without missing any calls.
 
Don’t add Call Waiting to the line that you use for business purposes. Focus your full attention on your business call.
 
If you use the Internet extensively, you might consider adding an ISDN line (Integrated Services Digital Network) or a comparable service available through local cable companies. These services offer high-speed digital access. This means that you can search for, and download, information twice as fast as on regular telephone lines. It also leaves your phone line free to make or accept calls and faxes.

Hot Tip

Use a good-quality two-line telephone for your home office. Here are some useful other features:
 
• A speakerphone, or hands-free feature, is useful for dialling (pick up the handset when your call is answered) or for freeing up both hands to do something else during your conversation.
 
• A memory feature enables you to store frequently-called numbers, which can be dialled automatically with a code.
 
You can use a hold button while you retrieve supporting files or other paperwork without the caller hearing your shuffling.

Hot Tip

Unless you plan to make and receive a large number of telephone calls away from your office, a cellular phone is not essential. Before committing yourself to such a phone, track the number of calls you make away from your office and record the accessibility to public phones. If you do choose to use a cellular telephone, purchase a portable model. This will enable you to carry the phone with you if you travel in a different vehicle and will allow you to use the phone away from your car.

 Answering Machines and Answering Services
 
You should not try to operate a business without an answering machine. Technological advances have resulted in very low-cost and effective answering machines. Many telephones and fax machines have them built in. Required features include voice-activated message taking and remote access for listening to your messages and for changing outgoing messages.
 
Answering machines have serious limitations. They can only provide and receive information, so the extent of the service provided is limited; and the message received is often unintelligible. Further, many callers prefer to deal with humans rather than leave messages on machines. And, unlike the Call Answer feature, callers are unable to leave a message if you are on the phone or using the fax machine or modem. To address these concerns, you might consider a telephone answering service instead.

The use of such a service will increase the number of messages that you will receive, and will also present a professional and efficient image for your business.
 
Unless it is important that your callers have instant access to you, a pager is not necessary. If you use an answering machine that you check regularly for messages, you can keep in touch with your callers.
 

Computers

A computer is as essential to your business as is a telephone. You will be able to attend to customer needs and administrative needs without purchasing secretarial and clerical services.

In selecting a computer, the first step is to clarify your business goals. A computer is just a tool to help you to achieve these goals. Ask yourself, What results do I want to achieve and how will a computer help me?

If you write many letters and reports you will need a basic word processing system to prepare, print, and store your work. A craftsperson or sales representative, for example, might also need contact management software.

Word processing is really the backbone of most home businesses. Today’s word processors are powerful tools that can perform a range of tasks from basic spreadsheet functions to desktop publishing. In practical terms, this means that you can use your own system to prepare personalized letterheads, business cards, invoices, and brochures. Most word processors come bundled in “suites” that contain some type of spreadsheet, database, and presentation software. It’s a good idea when comparing suites to look for little extras like contact management software and Web integration.
 
Contact management software is a specialized type of database that helps you keep track of business contacts efficiently. You can keep basic
 
information such as names, addresses, and phone numbers, and you can customize the type of information that you keep. For example, you can use this software to record details of conversations and meetings and make diary notes for follow-up. It is also excellent for correspondence, ranging from individual letters to customized or mass mailings. It allows you to insert the name and mailing address of a customer into your word processing system.
 
There is a wide range of good, user-friendly bookkeeping and accounting software available. In many cases, using the software is as easy as writing a cheque.

Your accounting software must also be acceptable to the Canada Customs and Revenue Agency (formerly called Revenue Canada), which has strict rules governing computerized bookkeeping systems used for businesses. It is also important to have the ability to move the information from your accounting program to a spreadsheet and/or word processor system.
 
There is also other software available that allows you to perform other valuable functions. You can use a modem and your computer with the right software to set up a fax-back system, which will automatically send information on a particular product or service to a prospective client quickly and efficiently.
 
You will also need a Web browser to access the Internet. You can use the Internet for e-mail and for locating all kinds of information and discussion groups. For example; you will be able to connect with other people who are in the same line of work to exchange ideas and services. The Internet is also a great source for up-to-date information on products and services.
There is also a wide range of industry-specific software available. To find out what is available and useful, ask other people in your field what they are using.

Your hardware must be capable of operating the software you will use in your business. When you buy a new system, make sure that you have received all of the peripherals—manuals, cables, and all of the paperwork that should be included. Even if software is preloaded, you are still entitled to receive the original disks as a backup. When you get your system up and running, leave it on for 24 hours and try to test all of the features. If hardware is going to fail, it will most likely happen within the first day.
 
Before you input any information into your computer, establish a routine for backing up your important information. For backup, you can use another hard drive, a floppy drive, or perhaps a tape unit. Backup your system regularly. Periodically restore your backup to make sure that your routine works and that you know how to retrieve the information and get the computer running again. Try to keep backup copies of your information separate from your computer system. If your computer is stolen, your backup disks will probably remain untouched, especially if they are hidden away in a closet.
 
To avoid computer viruses, ensure that you obtain and use a good virus detection program.
 
If you prepare reports and other written material for your business, invest in a laser printer. Alternatively, a good-quality desk jet, or ink jet, printer will provide you with adequate service. As with all computer equipment, make the purchasing decisions based on what you need rather than on what the sales representative has to sell.
 

Building Block

It’s important to discuss financial software with your accountant if you hire one to help with your business startup. When choosing software, make sure that you can exchange information with your accountant with the least amount of fuss. Ideally, you will want to be able to simply drop off a disk at year-end.

 Hot Tip

It is a good idea to start a log book for the computer to record informa-tion such as serial numbers, help line numbers, configuration (for example, port and hardware settings). You can also use the log to record dates and details of service performed and any changes such as additions to or deletions from your system.

 The log will serve as the central repository for all of your basic system information and configuration. This information will simplify service work and make it easier to retrieve your system and get it up and running in the event of a crash

Fax Machines

There are a number of approaches to the use of a fax machine. One is the standard fax machine with either a dedicated telephone line or Ident-A-Call (if available) and ring identifier. Second is the combination of a fax machine and an answering machine. Newer models have a built-in silicone chip that distinguishes incoming telephone calls from faxes, and routes the call accordingly. A third approach is to have a fax card installed in your computer and attached to a modem. This will enable you to use your computer terminal to send and receive fax messages. This technique works especially well if all the faxes that you send are computer generated. However, many of the computer-fax systems provide poor-quality incoming material.
 

Photocopiers

If you anticipate the need for making many copies of reports and correspondence, you might consider purchasing a photocopier for use in your home office. There are many small and relatively inexpensive copiers designed for home use. The alternative to having a home copier is to make regular trips to quick-print shops. You can also have copies made in many office supply stores, drug stores, libraries, and so forth. If you are making a large number of copies of relatively few documents, it is best to have the copying done at a quick-print shop. You can photocopy the material yourself or have the staff do it. 

Multifunction Machines 

Office equipment manufacturers such as Brother, Canon, Hewlett Packard, and Xerox produce multipurpose machines that combine some or all of the functions of laser printers, faxes, copiers, and scanners. These machines save valuable space in cramped home offices.
 

Specialized Equipment

Different businesses require different equipment. If your business generates a great deal of mail, you will probably want to obtain a postage meter. If you will be putting together batches of printed material, you might need collating equipment and an electric stapler. Or you might need some other specialized equipment, depending on the function of your business. 

Office Supplies

  This category includes everything from pens, pencils, and paper, to pins, tape, and paperclips. You probably won’t need too much of any one thing so don’t buy in large quantities until you know the volume that you will be using. 

Look for recycled paper—excellent-quality recycled paper stock is available. It is a statement of your commitment to environmentalism, which is usually well received in today’s marketplace. 

Many computer programs contain features that will let you design your own stationery and print it as you print the correspondence. Although the actual printing time is increased, you will have more versatility in the types and formats of letterheads, invoices, envelopes, etc. that you can produce.
 
This is especially important if you operate more than one business.

Hot Tip

Your paper wardrobe—your stationery—is one of your most important marketing tools. Since it is unlikely that your customers and potential customers will be seeing your office, your stationery must present the image of competence and professionalism. The time and effort involved in designing good stationery will be returned several times over. Take the time and spend the money to get the best stationery that you can afford.

Do You Need a Motor Vehicle? 

If you use your automobile to travel from your place of business (your home) to your customers’ places of business, your related automobile expenses can be used as tax deductions. Unless you use your automobile exclusively for business, only a portion of automobile expenses will be tax deductible. Check with your accountant.
 
Unless you anticipate using an automobile every working day, it will most likely be less expensive to rent a car when you need one.
 
What About Licences, Permits, Tax Registrations, Etc?
 
Some businesses—hairdressing and medical or dental services, for example—require municipal licences. Check with your local municipality to see if you need any licences. If you do, make sure that you get them before you start your business.
 
If you will be collecting sales taxes from your customers you must register with the appropriate tax authorities. Contact the appropriate Canada Business Service Centre listed in Appendix B for further information.

The Least You Need to Know

Before starting to acquire things for your business, double check your plans to make sure that you can still expect to attract customers.
 
As part of planning your business, choose an appropriate name and file the necessary forms with the appropriate government agency.
 
Select and organize the space for your home office to meet personal and family considerations.
 
Select  furniture  and  equipment  that  meet  your  specific  needs.
 
Obtain necessary licences, permits, and tax registrations before you start your business.