More Canadians are turning to a life of entrepreneurship, and part of the reason is because so many tools are now available to help them make that transition.
An Ipsos-Reid poll conducted on behalf of RBC found that 13 per cent of Canadians plan to start a business or become self-employed within the next five years.
“That works out to roughly 3.3 million adults,” said David Saffran, vice-president with Ipsos-Reid. Of those, 900,000 hope to be their own boss by the end of 2008.
Some findings stood out from this year’s survey in comparison to the 2005 RBC Small Business Survey, which also compared existing to aspiring entrepreneurs, said Rina Pillitteri, director of small business client strategy with RBC Royal Bank.
The percentage of aspiring Canadian entrepreneurs planning to start up Internet or online services businesses came in second highest overall, at 12 per cent (compared to 15 per cent for “personal services/arts/crafts” and 11 per cent for “retail”).
Also, there was a significant increase in the number of aspiring entrepreneurs who have never been self-employed or owned a business before (57 per cent in 2007 versus 41 per cent in 2005). More aspiring entrepreneurs are emerging from blue collar and labourer backgrounds (13 per cent in 2007 versus nine per cent in 2005).
An increasing number of Canadians aspire to start their own businesses because they want to work for themselves and work more flexible hours. “There is also now a wide array of support tools and expertise readily available to assist aspiring entrepreneurs, which makes it easier for them to get started,” said Pillitteri. Even better, these resources can be tailored to meet individual needs.
Many services will allow a start-up to host a Web site, run e-mail and run applications without actually having to build an internal IT infrastructure, said Andy Woyzbun, lead analyst with Info-Tech Research Group. If you want to set up a Web site, for example, you can sign up with a familiar name like Yahoo without having to put any equipment in place, except what you need within your own physical facility.
Typically you’d start with a wireless network, he said, because it’s the easiest to set up, as well as PCs to run your business, some local printing capability and the appropriate software. Some of the larger tier-one vendors allow you to order machines configured the way you want them, with the software that you require.
“You really don’t need to have anybody in-house who is full-time IT,” said Woyzbun. However, you should have someone on-call who will help fix things when they break. You also probably require a trusted advisor, which could be a consulting firm or even the brother-in-law of the president.
“We’re not talking about sophisticated design,” he said. “The first rule is don’t weigh yourself down, given the fact that you probably have all sorts of other issues to deal with if you’re a start-up. Don’t worry about building an IT organization – outsource.”
If you look at what’s happening with the software market, it’s become easy to integrate additional modules into your business, said John Reid, president of CATAAlliance. You might start with a payment system through PayPal, for example, but as your comfort level grows and you want more sophisticated features, you can easily integrate new modules into your existing system.
“If you look at the overall Web authoring tools, everything has become much more simplified so you don’t have to be a high-end expert in order to create the basic footprint or the infrastructure for your company,” he said.
Small businesses are always scrambling for cash, so they want to get as much advice as they can within their existing business relationships. Often they’ll find that the supplier, legal and accounting communities will provide some assistance for small start-ups, he said.
This is consistent with the RBC survey findings, which found that aspiring entrepreneurs see networking as an important factor in gaining knowledge about starting up a business. Entrepreneurs offered up this advice: understand who your competition is, develop a good business plan, research your markets, consider marketing and how you’re going to build your business, and look for a mentor.
But at what point does a start-up get large enough to justify building out its own IT infrastructure?
Once you have to hire an in-house CFO, then you should probably consider hiring an IT manager, said Woyzbun. Then you can decide if outsourcing is still working for you or if putting your own infrastructure in place makes sense.
“Once you get past the outsourcing stage it’s extremely difficult for the non-technical management of any enterprise to really figure out what they need to do,” he said.
“They’re going to get distracted unless the president happens to have a computer science degree.” But that’s a big step because it presumes you’re ready to make a commitment to some significant IT expenditures.
And, until they reach that point, it’s not necessary for start-ups to make that commitment. Aspiring entrepreneurs are interested in other facets of the business, such as how tax laws will impact them, said Saffran. They’re also interested in understanding more about government agencies and the various regulations as they navigate their way through starting a business.
Most IT people tend to assume that they have to design the Cadillac, said Woyzbun. “For a start-up, you’ve got to let management focus on marketing and negotiations with venture capitalists,” he said. “There’s usually just a handful of people and they’re doing everything.”