So you have decided to start a business but you wonder whether doing so in a recession is the right time. If that is the case, you are not alone. It seems that the entrepreneurial spirit is awakened during a recession. Downsizing, corporate re-structuring, and corporate closures are leaving thousands of talented workers wondering what the future will bring to them. Several will decide to take control of their destinies by starting their own business. In fact, according to Statistics Canada’s latest Labour Force Survey, self-employment grew by 37,000 in April 2009.
While the doom and gloom can scare many potential entrepreneurs, the observant ones will notice that start up costs may be at their lowest for years to come! Because of the economic downturn, equipment, land and buildings might be purchased at reduced rates or perhaps on favourable terms as manufacturers try to reduce their inventories. Finally, employment has fallen by 321,000 since its peak in October 2008. This means that there a lot of qualified people searching for jobs and they may agree to lower starting wages.
Arguably credit is tight but the Bank of Canada has adopted policies to improve access. In a May 6th statement to the Standing Senate Committee on Banking, Trade and Commerce, Bank of Canada Governor Mark Carney mentioned that: “Conditional on the outlook for inflation, the Bank has committed to holding this rate at 1/4 per cent until the end of June 2010.” In other words, we should enjoy the benefits of unusually low interest rates for the foreseeable future.
Once you have decided to start a business, you must prepare a business plan. Fortunately, there are several very good tools available on the interned to help emerging entrepreneurs with this task. The Business Development Bank of Canada and the Center for Entrepreneurship Education and Development are two agencies that provide excellent tools for building business plans. The business plan is not just something to do to obtain financing; it is a document that should guide you start your business on the right track. The business planning process provides a systemic approach to consider every aspects of operating a business. Not surprisingly, a key component of the business planning process is the section dealing with Human Resources.
Over the next few weeks, we will write about the issues that should be considered in preparing the Human Resources section of the business plan and we will introduce the concept of strategic human resources management. Broadly defined, strategic human resources management is the integration of human resources management strategies and systems to achieve the organisation’s goals and objectives. Because it is a complex issue, larger businesses and organisations have a department dedicated to Human Resources management. Typically, smaller firms do not have the resources for a full-time HR department and may not have access to the appropriate level of expertise. HR pros provides Human Resources management expertise to small and medium size businesses.