Luckily, the situation is slowly getting better so if you’re wondering how to start a business in Canada, there are a few things you need to know.
Stick with us as we take a deep dive into the world of business!
Starting a Business in Canada
So, wondering how to start a company in Canada?
The first step is to think of a business idea and a niche. Do your research and make sure that there is a market for your product or service.
Also, make sure that you are passionate about your business idea – you’ll need to put in a lot of hard work to make it succeed!
If you already have a top-notch business idea, then let’s proceed to review the other steps.
You may be interested: Highest Paid Jobs in Canada
Understand the Different Business Structures
When opening a business in Canada, you have a few different options when it comes to the structure of your company.
- A sole proprietorship is a business structure where there’s only one owner. This type of company is not taxed, which means the profits are tax-free and it doesn’t have any shareholders to report to.
- A general partnership is a business structure where there’s more than one owner, and each partner is responsible for the company’s liabilities. This type of company is taxed, and profits are shared between the partners according to their ownership percentage.
- A corporation is a type of business structure that offers some benefits that other structures don’t. For example, a corporation has limited liability – this means that the owners are not personally responsible for any debts or liabilities the company may have.
Additionally, a corporation is taxed separately from its owners, which can result in lower taxes overall.
Each one has its own benefits and drawbacks, so make sure you choose the one that’s right for you in order to start a successful business in Canada.
Create a Business Plan
This is your roadmap to success. Your business plan should outline your business goals, strategies and how you plan on achieving them. It’s also important to include information about your target market, product or service, as well as your financials.
Choose a Unique Name
When starting a business in Canada, you’ll need to choose a name for it. Make sure the name is catchy and easy to remember, and that it’s not already taken by another company. You can search for available domain names and trademarks through the Canadian Intellectual Property Office.
You may be interested: What is a DRIP?
Register Your Business with the Government
Once you’ve chosen your business structure and name, you’ll need to register your business with the government. This can be done through Industry Canada or your provincial or territorial government.
Apply for a Licence
It can be a costly process to start a business and get it running. You’ll need to have adequate cash set aside to cover your start-up expenditures as well as day-to-day running costs for at least three months (if not longer).
Entrepreneurs frequently use family, friends, or their own personal line of credit to bridge the gap, but there are some alternatives for Canadian entrepreneurs wondering how to start a business with no money in Canada:
Canada Small Business Financing Program
The Small Business Loans Program is a government initiative that makes it simpler for small firms to obtain loans from financial institutions. It works by spreading the risk across the federal government and the borrower. This lowers the barrier to entry for many loans.
To help youth ages 18 to 39 establish and grow successful enterprises, this microloan program provides start-up money and mentorship.
Community Futures also provides start-up financing to make setting up a company in Canada substantially easier. The conditions for this loan are different depending on your province of residence. Check with your local Community Futures office to see what additional information they may provide.
BDC is the first and only Canadian bank solely dedicated to entrepreneurs. They provide a wide range of financing options for businesses of all sizes in all sectors.
Register for Taxes
Once your business is registered, you’ll need to register for taxes. This can be done through the Canada Revenue Agency (CRA). The CRA will help you determine which type of tax registration is right for your business:
- The Provincial Sales Tax (PST) is a sales tax that is charged on most goods and services in Canada. The PST is imposed by the provincial government, and the rates vary depending on the province. Generally, the PST is between 5% and 10%, but there may be some exceptions.
- The Goods and Services Tax (GST) is a value-added tax that is charged on most goods and services in Canada. The GST is imposed by the federal government, and the rate is currently 5%.
Opening a business in Canada requires registration for the GST/PST if the businesses are selling or supplying taxable goods or services in Canada. To learn more about registration, visit the CRA website.
Further reading: When are Taxes due in Canada?
Complete Other Registrations
Depending on the type of business you’re starting, you may need to register with other government agencies. For example, if you’re starting a restaurant, you’ll need to register with the provincial health authority. Check with your local or provincial government to see what other registrations may be required.
Here are some common agencies that need to be consulted when starting a business in Canada:
It’s also necessary to register with WorkSafeBC and pay insurance premiums if you want to hire staff or establish a business as a corporation. This ensures that you and your workers are protected in the case of a work accident or sickness. If you are self-employed, you may purchase Personal Optional Protection through Work Safe BC.
If you want to import or export goods, you must first register with the Canada Border Services Agency (CBSA). The OneStop Business Registry is a simple way to register with the CBSA.
Restaurant Liquor License
If your main goal is to serve food rather than alcohol, you may apply for a restaurant liquor license through the OneStop Business Registry if you have a restaurant.
Canada Revenue Agency (CRA)
You’ll need to create a payroll deductions account with the Canada Revenue Agency (CRA) if you’re paying staff and making tax payments. You must register for a payroll deductions account if you are employing people and deducting money from their salaries.
Think of a Clear HR Strategy
A good HR strategy is essential. You’ll need to decide which employees to hire, how to pay them, and what benefits to offer. You’ll also need to create a policy for employee conduct, and decide how to handle disputes between employees.
By planning ahead, you can avoid many of the headaches that come when you start a business.
Find a Good Insurance Plan
Your business needs to be protected against risks such as property damage, theft, and liability claims. Some of the most common types of business insurance include:
- Property insurance: covers damage or loss to your business property, such as buildings, equipment, and inventory.
- Liability insurance: protects your business from lawsuits filed by third parties for injuries or property damage.
- Business interruption insurance: helps you recover financially if your business is forced to close due to a covered event.
- Product insurance: covers damage or loss to your products, such as inventory.
There are many different types of business insurance policies available, so it’s important to find one that fits your specific needs.
You may be interested: What is Financial Planning?
Think About How to Handle Accounting
One of the most important aspects of running a business is keeping track of your finances. You’ll need to create a system for tracking income and expenses and make sure you’re filing all required tax returns.
There are a number of different accounting software programs available, so find one that fits your needs. If you’re not comfortable doing your own bookkeeping, you may want to hire a bookkeeper or accountant.
Set Your Records Straight and Promote Your Business
Now that you have all of the basics in place, it’s time to start promoting your new business in Canada. You can start by creating a website or blog, and posting information about your products or services. Some of the most common ways to promote your new business include:
- Social media profiles where you can post regular updates and attract customers
- You can print flyers or brochures that can be distributed in local businesses or posted in public spheres
- Events or workshops that provide a deeper insight into your product or good
By using a variety of marketing techniques, you can reach a larger audience and let people know what you have to offer.
There are many things to consider when starting a business, but we hope our guide has helped you paint a better picture about how to start a business in Canada as well as the important things to consider.
By taking these measures, you’re well on your way to starting a successful business in Canada.
There are many business opportunities in Canada. The most important thing is to choose a business that fits your skills and interests. Some of the most common types of businesses in Canada include:
- Retail businesses
- Service businesses
- Professional services
- Manufacturing businesses
There are many other types of businesses that can be successful in Canada, so it’s important to do some research and find one that makes a match between your interest and the market trends.
Starting a home-based business in Canada is pretty much the same as any other regular business, with the only difference being your location. Note that you are still subject to certain licences but you may be granted tax-free operation, depending on the nature of your services or goods.