When starting a business in Canada, it’s important to remember the adage, “Rome wasn’t built in a day.” In other words, building a Canadian business takes time. And if you want it to be as significant as Rome (or close to), you won’t want to rush the process.
But how to get started? What’s the first thing you should do? Lucky for you, we’ve simplified things by writing a step-by-step guide to starting a business in Canada.
1.Create a Business Plan
To take your business from idea to reality, the first thing you need is a plan. A business plan will describe the core business activities you intend to pursue and how you plan on achieving the company’s goals. In addition, it should include an executive summary, details about the products or services you want to offer, a marketing strategy and analysis, a financial plan, and a budget.
2. Come Up with a Name for Your Business
Your company’s name will define your business for the rest of its existence. So you need to come up with something that describes what you do and will resonate with your target audience.
When coming up with a name, consider the following:
- What name will convey the nature of the product or service you’re offering?
- How will your name set your business apart from the competition?
- Is your name easy to remember, spell and pronounce?
- Can the name grow with your business as you add new products or services?
You also need to consider whether you can find a domain name that corresponds to the name of your business.
Domain names are the central part of a web address that’s used to access a website. Given the prominence of the internet in everyone’s daily lives, your business needs to have a website. Furthermore, that website needs to have a domain name that is the same or as close as possible to your business name. Therefore, when coming up with a name for your business, you should check if a domain of the same name is available.
3. Select a Business Ownership Type
Businesses in Canada can take three primary forms: sole proprietorship, partnership, and corporation. Within these structures are options such as a cooperative corporation or limited partnership, but they all fall under one of these three categories. Determining what ownership type you want your business to be will depend on several factors. For instance, a sole proprietorship is the simplest and least expensive type of business to register and run. However, it means you’re entirely responsible for your business, and you can be held personally liable for any business debts. Although, you do get to keep all the profits.
A partnership, by contrast, includes one or more partners. This relationship has to be classified as either a general partnership, a limited partnership, or a limited liability partnership. In all of these forms, you’re pooling your resources with someone else in order to get your business off the ground. You will then share your profits with these partners.
Finally, a corporation involves setting up a separate legal entity. As a result, you’re not personally liable for any debts or obligations of the business. Incorporation can be undertaken at the federal or regional level. However, it costs more and requires more thorough reporting than any other type of business.
4. Figure Out How to Finance your Business
If you can’t finance your business out of your own pocket, you will require an infusion of funds from another source or sources. There are a number of financing options to consider. For instance, you might consider debt financing, a government grant, or equity sharing. However, before you settle on an option, make sure you understand the differences between each one and make sure you’re ready to deal with the obligations of the type you choose.
5. Build a High Performing Website
You already know that your business needs a website; that’s a given. However, what you may not realize is that to be successful, you need a high-performing website. In other words, your site needs to load quickly, be protected from hackers, and have a reliable uptime. These elements are directly related to the quality of your web hosting provider. Therefore, you should research web hosts carefully to find one that will ensure the optimal site experience for your target audience.
6. Procure a Business License
Depending on where your business is located, you may need to get a business license. Additionally, based on the type of business you’re starting, you may also need other licenses and permits. Make sure to do your research and find out exactly what licenses or permits you may need.
7. Register for the GST/HST
Unless your business’s gross income remains under $30,000 for four consecutive quarters, you’ll be required to register for the goods and services tax (GST) and the harmonized sales tax (HST). However, even if you aren’t making a lot of money initially, you may want to register for the GST/HST immediately to get Input Tax Credits.
8. Register to Collect and Remit a Provincial Sales Tax
If your business is located in Alberta, British Columbia, Manitoba, or Saskatchewan, you need to register as a collector of provincial sales tax (PST). If you’re in Quebec, you have to register for the Quebec Sales Tax (QST).
9. Get Ready to Have Employees
At some point, you’ll likely need to have employees. Therefore, you should get everything ready to bring people on to work for you. This means setting up payroll deductions, worker’s compensation insurance, and employment insurance.
“Proud thinker. Tv fanatic. Communicator. Evil student. Food junkie. Passionate coffee geek. Award-winning alcohol advocate.”