How to Start a Business in Canada: A Step-by-Step Guide
Matthew Scott, CPA / August 15, 2023
Starting a business in Canada can be an exciting and rewarding venture, but it also comes with many challenges and responsibilities. You need to have a clear vision of what you want to achieve, a solid plan of how to get there, and the necessary resources and support to make it happen. In this blog post, we will guide you through the 10 essential steps that you should follow to start a business in Canada successfully.
Step 1: Explore well-known territory
The first step to starting a business in Canada is to explore well-known territory. This means that you should choose an industry or a niche that you are familiar with, passionate about, and have some expertise or experience in. This will help you to identify the needs and problems of your target market, the opportunities and threats of your competitive environment, and the strengths and weaknesses of your own skills and resources. By exploring well-known territory, you will also be able to leverage your existing network of contacts, customers, suppliers, and partners who can help you grow your business.
Step 2: Get the coaching you need
The second step to starting a business in Canada is to get the coaching you need. You can start by building a network of professionals such as bankers, lawyers, accountants, and experienced consultants who can help you out with various aspects of your business, such as financing, legal issues, taxation, and business planning. You can also seek mentorship and networking opportunities from other entrepreneurs who have gone through the same journey as you and can offer you valuable advice, feedback, and support. You can find such mentors and networks through various organizations and programs in Canada, such as Futurpreneur Canada and Business Development Bank of Canada (BDC).
Step 3: Prepare a well-structured business plan
The third step to starting a business in Canada is to prepare a well-structured business plan. A business plan is a document that outlines the goals, strategies, actions, and resources of your business. It helps you to clarify your vision, communicate your value proposition, analyze your market and competition, define your marketing and sales tactics, forecast your financial performance, and identify your risks and opportunities. A business plan also serves as a tool to attract potential investors, lenders, partners, and customers who want to see the viability and potential of your business idea. You can use various templates and guides to help you write your business plan, such as BDC’s free business plan template or Futurpreneur Canada’s interactive business plan writer.
Step 4: Secure your financing
The fourth step to starting a business in Canada is to secure your financing. Financing is the money that you need to start and operate your business. It can come from various sources, such as your own savings, family and friends, grants and subsidies, loans and credit lines, angel investors and venture capitalists, or crowdfunding platforms. Depending on the type and amount of financing that you need, you may have to meet different eligibility criteria, provide different documents and information, and agree to different terms and conditions. You should carefully compare the advantages and disadvantages of each financing option and choose the one that best suits your needs and goals. You can find various financing programs and resources for entrepreneurs in Canada through BDC’s financing solutions, Canada Business Network’s financing search tool, or Innovation Canada’s funding navigator.
Step 5: Choose a business name
The fifth step to starting a business in Canada is to choose a business name. A business name is the name that you use to identify your business to the public. It should be unique, memorable, descriptive, and easy to spell and pronounce. It should also reflect your brand identity, values, and personality. To choose a good business name, you should do some brainstorming, research, testing, and feedback gathering. You should also check if the name is already taken by another business or trademarked by someone else. You can use various tools and databases to help you with this process, such as BDC’s free domain name search tool, Canada Business Network’s name search tool, or Canadian Intellectual Property Office’s trademark database.
Step 6: Register your business with the government
The sixth step to starting a business in Canada is to register your business with the government. Registering your business means that you obtain the legal rights and obligations to operate your business under a certain name and structure in Canada. The type and level of registration that you need depends on the type and location of your business. For example, if you want to start a corporation, you will need to register it at the federal or provincial/territorial level, depending on where you want to operate. If you want to start a sole proprietorship or a partnership, you will need to register it at the provincial/territorial level, unless you use your own name as your business name. You will also need to apply for a business number or a tax account from the Canada Revenue Agency (CRA) if you plan to charge GST/HST, hire employees, or import or export goods or services. You can find more information about the registration requirements and procedures for different types of businesses in Canada through the Government of Canada website.
Step 7: Apply for business permits and licences
The seventh step to starting a business in Canada is to apply for business permits and licences. Permits and licences are the official documents that authorize you to conduct certain activities or operations in your business. They can be issued by different levels of government (federal, provincial/territorial, or municipal) and different departments or agencies (such as health, environment, safety, or zoning). The type and number of permits and licences that you need depend on the nature and location of your business. For example, if you want to open a restaurant, you may need a food service permit, a liquor licence, a fire safety certificate, and a zoning approval. If you want to operate an online store, you may need an e-commerce licence, a privacy policy, and a terms of service agreement. You can find out what permits and licences you need for your business in Canada through BizPaL, an online service that provides customized information on permits and licences from all levels of government.
Step 8: Secure your online presence
The eighth step to starting a business in Canada is to secure your online presence. Having an online presence means that you have a website, a social media account, an email address, or any other digital platform that allows you to showcase your business, products, services, and brand to potential customers online. Having an online presence can help you to reach a wider audience, increase your visibility and credibility, generate leads and sales, and build relationships with your customers. To secure your online presence, you should register a domain name that matches your business name, create a professional and user-friendly website that showcases your value proposition and call to action, set up social media accounts that engage your target market and promote your brand personality, and use email marketing tools that communicate with your customers effectively. There are several competitive online tools and services to help you with this process.
Step 9: Establish clear HR strategies
The ninth step to starting a business in Canada is to establish clear HR strategies. HR stands for human resources, which are the people who work for your business. They can be employees, contractors, freelancers, interns, volunteers, or partners. Having clear HR strategies means that you have a plan of how to recruit, retain, manage, motivate, train, and reward your human resources. Having clear HR strategies can help you to attract and keep the right people for your business, improve their performance and productivity, enhance their skills and knowledge, and create a positive and healthy work culture. To establish clear HR strategies, you should define your HR needs and goals, create job descriptions and contracts that outline the roles and responsibilities of your human resources, implement fair and competitive compensation and benefits packages that reward their contributions, provide regular feedback and recognition that acknowledge their achievements, and offer learning and development opportunities that support their growth.
Step 10: Capitalize your business fully
The tenth and final step to starting a business in Canada is to capitalize your business fully. Capitalizing your business means that you have enough money to cover all the costs of starting and running your business until it becomes profitable. These costs can include fixed costs (such as rent, utilities, equipment), variable costs (such as inventory, supplies), start-up costs (such as registration fees), operating costs (such as salaries), marketing costs (such as advertising), taxes (such as GST/HST), and contingency costs (such as emergencies). To capitalize your business fully, you should estimate how much money you need for each cost category based on realistic assumptions and projections. You should also track how much money you spend and earn on a regular basis using accounting software or tools and monistor your cash flow on an ongoing basis.
These are the 10 essential steps that you should follow to start a business in Canada successfully. Of course, there are many more details and nuances that you should consider and learn along the way. For more information and resources on starting and running a business in Canada, book a consult today!
© 2023 Matthew Scott CPA
