Starting a business can seem daunting, but getting started on your entrepreneurial journey doesn’t have to be as scary as you think. Here’s a quick and easy breakdown of starting a small business in Canada.
1. Find a business idea
Whether you’re starting a side hustle or have dreams of a multi-million dollar corporation, the first thing you need to do is to come up with a plan or a strategy. Ask yourself: What will you provide, and who are your target customers?
Business experts point to two main tips for those looking to start a business.
- Will your business provide the solution to a problem?
- Do you know the industry inside and out?
If your business idea checks off both of those boxes, it is probably worth pursuing.
2. Create a business plan
Take the time to do the research and create a strong business plan. It doesn’t need to be a 100-page PDF, but you’ll need some figures, estimates and an understanding of your cash flow to back up your proposal. The more realistic and well-researched your plan is, the more likely you are to obtain financial support from the bank or another lender.
3. Choose a name for your business
Chances are you already have some ideas in mind, but there are a few things to consider before you commit to a business name.
- Does the name make it obvious to customers what you are selling?
- Does it reflect positively on the business?
- Is it easy to pronounce, spell and remember?
- Is it unique enough to avoid any potential legal issues?
Once you settle on a business name, you’ll want to make sure it’s available. If the name has already been taken, you can’t legally use it. But legality aside, you also want a unique name to avoid confusion.
You can start with an internet search on your preferred business name but be sure to dig deeper. Search national name databases in Canada, such as Nuans and Canada’s Business Registries, and provincial and territorial databases.
4. Register your new business with the government
You may or may not have to register the name of your start-up, depending on how the business is structured. You don’t need to register if you are the sole proprietor operating under your legal name, like a freelancer. However, if your business is a partnership or corporation, you do need to register the name, and you may also want to register a trademark.
Further registration requirements will again depend on the type of business structure you use, and where you set up shop. The Government of Canada’s website offers links to start-up business support for each province/territory.
5. Apply for any required permits and licenses
The requirements for what kinds of permits and licenses you may need before launching your business vary depending on your location and the type of business you’re running. Still, they may be necessary at all three levels of government.
BizPal has a handy online search tool that allows you to enter your business’s location (municipality) and industry type to find out which permits and licenses you require.
6. Apply for a CRA business number
On top of business permits and licenses, you’ll also want to apply for a business number, used for income tax purposes. You can do this online or by phone through the Canada Revenue Agency (CRA).
Make sure to research the basics of paying taxes when you’re self-employed.
7. Open a business bank account
It’s a good idea to keep your business banking separate from your personal banking, and using a business bank account is the easiest way to do this.
Business bank accounts function like regular bank accounts but often also include features and perks designed for different business types’ varying sizes and needs.
8. Apply for a business credit card
A business credit card is another great way to keep your personal finances separate. The best business credit cards operate like a personal credit card and come in handy when purchasing supplies, meals for clients, gas for company vehicles, and other business expenses.
9. Get financing to fund your business
Launching a new business can be a costly endeavour. So, even if you have some healthy savings set aside for your start-up, you may need some help.
To get funding for your small business, consider asking friends or family to invest in the venture or give you a loan. You can also go the traditional route and borrow money from a bank or another lender. Remember, you’ll need a good business plan to be approved!
It’s worth noting that the Government of Canada also offers many small-business grants, including options for First Nations businesses, new immigrants to Canada and even former military members. Take a look at this Business Benefits Finder to see if anything applies to you.
10. Ask for help
It takes a lot of work to start your own business. Thankfully, however, several resources are available to help you get up and running. Take the time to do your research along the way and, if you like, consider working with a mentor who can guide you through the entrepreneurial process.
Debt can be divided into several types: secured and unsecured, good and bad. Other types of debt include credit card debt, student loans, medical bills and mortgages.
A business credit card is a way to charge expenses related to a company. Size and financial needs of the company should be considered before getting a business credit card.