Want Start a Small Business? Here Are Your First 10 Steps

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 breakdown of the general steps it takes to start a small business in Canada.

1. Come up with 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:

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.

Be sure to include:

3. Decide how you'll structure your business

Your business structure will affect the taxes you pay, how much liability there is and how complex your administrative processes might be.

Sole proprietorship

A fancy term for a one-person business.

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Partnership

A business relationship between two ore more people or entities.

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Corporation

A business entity that's completely separate from its owners.

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» Did you know? Incorporation fees vary by province and run roughly from $200–$400 online.

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4. Choose a business name and register it

Chances are you already have some ideas in mind, but there are a few things to consider before you commit to a business name.

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, to see whether the name you want is already taken.

» Unless you plan to operate as a sole proprietorship — using your exact legal name — you'll need to register your business with the government.

Registering your business doesn't provide trademark protection. Consider filing a trademark if brand protection matters to you.

Further business registration requirements will depend on where you set up shop. The Government of Canada’s website offers links to business support resources in each province/territory.

5. Get any necessary permits and licenses

The requirements depend on your industry and location.

To find out exactly what you need, use BizPaL, a federal-provincial tool that generates a personalized list of permits and licences.

Common permits include:

6. Apply for a CRA business number and tax accounts

For income tax purposes, most businesses will need a Business Number (BN) from the Canada Revenue Agency.

You may also need to register for:

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.

You may also want to apply for a business credit card. Having a line of credit in your business' name is another 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.

Looking for a business credit card?

We analyzed dozens of Canadian business credit cards to find the best for your company.

Compare Business Cards

8. 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.

Besides traditional bank loans and lines of credit, today’s entrepreneurs can explore:

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.

» Did you know? As of late 2024, small businesses may also benefit from reduced credit card processing fees, with interchange rates lowered by up to 27% for eligible merchants.

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9. Build your brand and online presence

You can start building a brand even before you have a location or products to sell! Even traditional brick-and-mortar businesses benefit from a digital presence. Consider:

Many new entrepreneurs use low-cost website builders, CRM tools and AI-generated marketing assets to reduce startup costs.

10. Don't be afraid to ask for (and accept) help

Canada offers a wide range of free or low-cost support services:

Many entrepreneurs say that having a supportive community of others who are on the same journey (or who have done it before) can make things less stressful. Even if you're at the very beginning of your quest to start a business, it's a good idea to start meeting folks who can help along the way.