Few small business owners understand the impact they have on the national economy. But if you plan to start a venture in Canada, you should be fully aware of your influence because small and medium sized companies are the backbone of the Canadian economy. Because most Canadian companies are small businesses, most private employers are SMEs. Statistics show that 99.8% of all Canadian ventures are small-to medium sized companies with no more than 500 employees. 98.2% of all businesses have less than 100 workers, and 55% of them have fewer than 4.
Saskatchewan and British Colombia are great places where to start a small business because they are the provinces with the highest percentage of people working in small firms.
A small business in Canada means a corner store, a family-owned boutique, restaurant, hostel or a medical office. Over 50% of Canadian small businesses are in social assistance, health care, technical, scientific and professional services, construction and retail trade.
It all starts with a good business plan
Once you decide the domain you prefer, you need to create a business plan. The Canada Business website provides plenty of resources to help you write a great business plan. Check their templates, pieces of advice, and tools.
There are different business plans you can choose from, so decide if a modern one-page or traditional one better describe your idea. Include information a potential investor may want to know. A classic business plan includes the type of venture you want to run, its location, needs, and resources that can help you.
Pick a business name and register it
The perfect business name helps the public understand what you do, and provide them with an immediate impression of the type of venture you manage. Pick a simple and unique one that tells your clients what you do for them. The name should be different from the one of another business, simple to spell and pronounce. Create a short list of names, and check if they are already in use because it’s against the law to choose one an existing company has.
Once you decide what the name of the business is, you need to register it with the local authorities. You don’t have to register a sole proprietorship that includes your legal name. But if you want to use another one, then you’ll need to register it.
In Labrador and Newfoundland, you don’t have to register sole proprietorships and partnerships. The location of the business determines whether or not you need to register its name.
Find financial support
Depending on your initial budget, you may need some financial support to start the business or to expand it at a later stage. No matter when you need financial support, it’s important to know ahead what your options are.
When starting any business, financing influences its success. If you lack funds, small business loans from private lenders in Canada can help you kick-start your company. Business loans are different from personal loans because you are borrowing money from a private lender and you’ll repay the sum with fees and interest. A small business loan provides the capital you need to buy assets and power the business.
The Canadian government website provides data about the financial support small business can get. The type of company and its location influence the financial support you can get. If a small business loan from a private lender isn’t the right solution for you, you can check the benefits angel investors, crowdfunding and traditional banks provide.
All funding solutions have their pros and cons, so you need to decide which one works best for your firm.
Register for the provincial sales tax
Some provincial and territorial governments require companies to register with them before launch. You’ll need to check with the local government to see what steps you need to follow in the process because they depend from a province to another. Each region has a registry office that provides information for entrepreneurs. You can also find useful links on the Canada Business website.
License your company
The licenses and permits you need to run your company, highly depend on its specific. License isn’t necessary for all businesses, but it’s advisable to check with the municipality if you need one to operate your firm legally to prevent further issues. Use the BizPal tool to find more information about business licensing because it lists the types of licenses and permits various ownerships require. BizPal helps you identify the documents you need for various levels of government.
Register for the GST/HST
You need to register the company with the GST/HST when its gross income exceeds $30,000. The firm’s location determines if you have to register it with the local and federal government. The general rule states that all businesses need a Business Number from the federal government. For businesses located in Quebec, you also need to get a Quebec Enterprise Number.
The Business Number has 9 digit-numbers and it allows the government to identify your company.
Insure your venture and launch it
The type of company you establish determines the insurance you need. Check all the options and get the one that covers your business in various scenarios. It’s recommended to insure business property, vehicles, and goods. Depending on your location, you may want to get business interruption insurance to cover the costs a natural disaster can produce. Get in touch with an expert to decide if you need professional liability, product liability or general liability cover because they have different advantages.
If you decide to establish a home-based business, you’ll need a special cover because business insurance is different from home-based business insurance.
Starting a small business is thrilling and stressful because you have a lot to do. From choosing the name and type of ownership to registering and insuring it, all these steps influence its success, and you shouldn’t miss any of them.