By Katharine Sandiford -- We kid you not: Starting your own business is tough. Many people dream of shaking loose of bosses, time sheets, stuffy offices and uninspiring work. But so many of these people are also unprepared for the challenges faced by the first-time entrepreneur.

Three months after she opened the doors of her colourful Filipino grocery store in downtown Whitehorse, pretty and petite Beth Gallanosa packs the spicy snacks and fishy flavourings back into the stiff cardboard boxes in which they arrived. She works silently, efficiently, sorrowfully, side by side with her beefy business partner and boyfriend Art Kehler. It’s as though they are clearing out the belongings from a deceased relative’s house. “It’s a big loss and a huge disappointment,” she says in her thick Filipino accent. After only a few months of tasting the sour sweetness of self-employment with Fili Foods, Gallanosa already speaks like a true entrepreneur. “But we’ll just learn from this. We’re already moving on to something else.”

Although many Northern entrepreneurs do succeed, there’s an equal or greater number that will fail and give up, their dreams doomed to the dustbin, debts racked up for a lifetime of repayment. These start-up screw-ups have lessons to share – even grains of wisdom – that others driving down this icy road can sprinkle around for better traction.

Public library shelves are packed spine to spine with how-to books penned by expert entrepreneurs. The Internet is overflowing with helpful blogs and websites on this theme. In most Northern hubs, you’ll find business service centres and government agencies abounding with helpful staff, publications and web-based tools. And among all these resources, it seems a few recurrent themes emerge. The most overarching, is this: the only way to succeed in running your own business, unless you’re born with a horseshoe imbedded in your lower digestive tract, is to fail, sometimes miserably, over and over again, until you get it right.

Jimi Onalik was just a kid when, in 2003, Unalik Aviation, the two-year-old Nunavut-based aviation company he started went bankrupt. The 28-year-old lost everything: his business, his planes, and his livelihood. Because he had made personal guarantees on several million dollars worth of loans, he was forced into personal bankruptcy and all his belongings were seized. Too poor to even live in Iqaluit, he was forced out of his home, out of his territory, to do odd jobs in Alberta to help him regain his financial footing. “Bankruptcy is pretty brutal,” Onalik says. “But looking back, despite all the stress and difficulty, I’m not sure I would have done anything differently.”

Onalik, like so many other entrepreneurs, says the best way to learn is through trial and error. It was through the mistakes with his first company that he was able to figure out what to do right with the next. “We weren’t the strongest company financially, but we were really good operationally. So when we had an aircraft damaged near the North Pole, that was the straw that broke the camel’s back; we just fell apart,” he says. Onalik admits that starting an airline from scratch, on his own, was overly ambitious.

He says he should have sought out financial support, from partners or investors, right from the beginning, rather then just relying on one hefty bank loan. “It’s really hard to start an airline by yourself. Our costs were just way too high but I was just so confident it would work out,” he says. “I tended to be too much of an optimist in the past. It’s good to have a certain amount of optimism but you should always plan for the worst and hope for the best.” Only age and experience, he says, could have taught him that lesson.

But Onalik’s good name didn’t die with his company. Kenn Borek Aviation, an established Northern carrier, approached him about forming a partnership, confident in his ability to operate a Nunavut-based airline. Kenn Borek would look after the financial side of the business and Onalik could focus on what he does best: running a Northern airline. “I like to think that sometimes it was just luck and timing,” Onalik says, “but I know we had built a name for ourselves. We had a lot of faithful customers and were able to do a really good job.” Less than a year after his company’s collapse, he forged a winning partnership with Kenn Borek Aviation and created a new airline, Unaalik Aviation 2004 Inc. It has grown to be the largest Nunavut-based air operator, with bases in Iqaluit, Rankin Inlet and Resolute Bay, and over a dozen airplanes in a growing fleet.

And Onalik has some other advice to the first-time entrepreneur: choose something you love. Passionate about airplanes since he was a boy, Onalik was taking flying lessons at 14 and purchased his first airplane at 23. Experts agree: There’s no point dedicating your life to a business that doesn’t provide a service or product that you care deeply about. Martha Stewart, in her book, The Martha Rules, says her passion for food and common-sense home products have always been the backbone of her business. She started out with a small catering business, but because of her love of good foods, remained motivated to work through late nights and weekends, through emotionally and financially stressful times, without giving up. She calls this Martha’s Rule Number One and says, “Build your business around something you love – something that is inherently and endlessly interesting to you.”

That’s what Scott Smith did when he started the award-winning Northern Canadian Adventure Racing Inc. two years ago. It organizes the North’s most extreme and internationally renowned multi-day endurance race, the Rock and Ice Ultra, held in Yellowknife each March. A competitive adventure athlete (he has skied across Greenland and mountain biked across Canada) and an independent mining-exploration contractor, Smith started his company so he could do what he loves most: run around the Northern wilderness, GPS in hand, setting up courses and checkpoints for races. Smith organizes hundreds of volunteers, manages over a dozen employees, arranges high-level sponsorships, advertising and promotions, and oversees the bookkeeping of his two-year-old company. For all this, he won the Business Development Bank of Canada’s Young Entrepreneur Award for the NWT in 2007.

Although the business is not yet profitable, Smith says he’s not anxious – his business plan shows he’s likely not to clear the red for another few years. Smart planning and research taught him that he would face high costs at start-up and would endure slow growth as the event gains an international reputation and participants. He took a patient and cautious approach, didn’t quit his day job in mining exploration, and didn’t push the company to grow too much too fast. Success, for Smith, is measured not by how much money he is bringing in, but by the well-organized and well-attended events – and the fact that every year, he comes closer to breaking a profit. In his first year, there were 100 participants, last year there were 150. He expects 300 for 2009’s race. Every year, too, more and more high-level international athletes come out, representing dozens of countries. “I feel success because I see people from all around the world, camped out in minus-40, having a great time.”

Smith admits his finances could be in better shape. If he could do it all again, he wouldn’t have bothered applying for government funding, saying the money he applied took too long to arrive, was not worth the headache, and wasted time. “For the amount of time and hassle, I would have been better off working,” he says. “I received grant money from both the feds and the territory, but it came in too late to use. I simply won’t bother with them again.”

Luckily, Smith also aggressively pursued corporate sponsorship; companies that he says understand the timelines of the real world. His operational costs are more than $100,000 a year, a great portion of which is shouldered by his main sponsor, diamond-miner BHP Billiton. It provides $30,000 in diamonds from the NWT Ekati mine for prizes. “If it wasn’t for their support, I couldn’t keep doing this,” Smith says, shaking his head. Other big name sponsors like Matrix, Canadian North and CBC are testaments to Smith’s effectiveness at sales negotiation. And with top international magazine and television programs covering his event, he’s sure future sponsorships will be easier to secure.

“It all takes so much time,” Smith says. “But you have to be patient. You can’t just build this kind of thing overnight.” Renowned British business advisor Duncan Cheatle lists rushing as one of the most crucial mistakes a first-time entrepreneur can make. “Never be in a hurry. Once you’ve got the formula right, then slowly scale up,” he says. “You must take risks, but grow slowly.” He suggests that like any relationship, it takes time to build the trust of clients, partners, and other colleagues. We shouldn’t expect overnight results. Instead, he advises we have to take the utmost caution and planning in order to grow properly.

Rushing is one of the fatal errors Gallanosa and Kehler made in their hurry to open Fili Foods in Whitehorse. One day, they had an idea for a business, and boom, a month later they opened a fully stocked store. They didn’t have time to write a formal business plan, conduct proper market research, or even do any advertising. They opened the store based on the simple idea that the 600 Filipino immigrants living in the Yukon needed their own imported-foods store. If each person spent $50 a month, Gallanosa says, the business would be profitable. Instead, only a small fraction of the Filipino community actually shopped there.

They blame illegal bootleggers for stealing customers, but that’s just one of many factors the virgin business-duo admitss they should have considered early on. “We shouldn’t have depended on the Filipino community,” Gallanosa says. She claims if it weren’t for the non-Filipino shoppers – customers she didn’t expect at all – her store would have closed even earlier than it did. As it is, the shop only made a quarter of the $40,000 she and her partner put into it.

Jerry Jones-Soltani is a business services officer and micro-loan coordinator at Däna Näye Ventures in Whitehorse. Her job is to work closely with small start-up businesses, assist them with their loan applications, and provide counsel and arms length supervision once they get off the ground.

Jones-Soltani has 27 years experience running an international trucking business and several more as a small-business advisor. She’s overflowing with pithy advice and shrewd opinions. “Fili Foods, I’ve watched them,” Jones-Soltani says. “That would be a good example of somebody not having done a good feasibility and market study. Unless there is some magic phenomenon that happens, businesses without a market will fail.”

But Gallanosa and her partner have already moved on. They’ve set up a Filipino BBQ cart, downtown and at regional festivals, and serve up spicy kebabs and sweet steamed Asian buns. The cart has brought in more in one month than the store did in three. “It was a miserable failure but I just suck it up,” Gallanosa says. “I’m glad we’re bailing out on this early and I had the wisdom to quit now and move on to something else. And I’m sure the next thing will work better.”