Are you considering starting a small business in Ontario or anywhere else in Canada. If you do, you will be helping to drive the Canadian economy.Canada has a lot of small businesses. In December 2021, there were 1.19 million small businesses in the country, and they were the biggest employers.
Some popular small business ideas are selling products online, cleaning buildings, fixing things, and selling food from a truck.Are you thinking about starting a small business in Canada. This guide can help you with online or traditional businesses.
How To Start a Small Business In Canada
Starting your own business is a big decision and might seem scary at first. It’s a good idea to use a checklist when starting a small business so you don’t forget anything.By breaking down the things you need to do into small tasks, you can start a business with more confidence.Here are the things you need to do to start a small business in Canada.
Step 1: Plan Your BusinessThink of a business idea that can make money. If you really like something, think about how you could make money from it.Gather information about what is popular in your area by asking people or looking at recent sales.If you really like a product or service, try to make it even better. The goal is to discover new ways to accomplish traditional tasks.
Step 2: Choose Your Business Name:-Come up with a short, easy-to-remember, and simple business name. You need to show what you’re selling and make your business look good.Please give three options in case your first choice is not available. Check Canada’s business records to see if the name you want is possible.
Step 3: Register or Incorporate Your Business:- When you start a business, pick a structure that fits your goals. These are the three kinds of business structures:
Sole proprietorship:- In this structure, you own everything in the company – the good things and the bad things.As the only owner, you have complete control and authority over the business and are responsible for making all the decisions.You get all the money the business makes, take responsibility for any money the business loses, have to pay for any debts the business has, and have to deal with any problems the business faces.
Partnership:-A partnership is when two or more people agree to work together to run a business, and they share ownership according to the agreement they make.In this system, groups of people own the things the business uses and divide the money the company makes and the debts the company owes.
Corporation:- A corporation is a business that can make deals and own things in its own name, instead of the people who own it.Directors and shareholders control the corporation. The corporation can own things, borrow money, and pay it back.
Step 4: Apply For a Business Permit or License:- Use BizPal to find the permits and licenses you need for your business. It will give you a list of what you need based on where you are, what industry you’re in, and what your business does.In Canada, you might have to get the right permits and business licenses from three different levels of government the province, the city or town, and the country.Every government level needs different permits, and each province and territory has its own rules.
Step 6: Apply for a Business Credit Card:- A business credit card helps you build credit for your business and makes it easier to pay for things when you start a business. It also helps you keep track of how much money you are spending.Paying bills, travel costs, and buying things is easy with this option. To get a business credit card, you will need to show these things:
- Your financial past and ability to borrow money.
- Information about your business
- Name of the business that is recognized and approved by the law.
- A business license is a permit that allows a person or company to legally operate a business in a specific location.
- Address and phone number on file
- Identification number for the employer.
- Yearly income
- Tax papers
- The amount of people who work for a company.
- The amount of money you need to spend each month.
- Your business’s financial reputation
Step 7: Get Support or Financing For Your Business:- Below are the primary sources of funds when starting a business:
- Investing your own money. This is when you use your own money or assets as a guarantee.
- I love money. This means borrowing money from your family and friends and paying them back when your business makes enough money.
- Borrowing This type of financing allows you to borrow money from someone else and then pay it back over time with extra money added on top as interest. This includes loans from banks and loans from individuals.
- Equity financing means raising money by selling shares of a company to investors in exchange for ownership in the company.In this financing option, investors give money to your business and in return, they get a part of the business. Venture capitalists and angel investors are usually in this group.
- Government money given for different purposes. If you don’t have money to start a business in Canada, you can ask the government for funding.The government gives money to people who want to start a small business or make their current one bigger.
Step 8: Complete Other Registrations:- If your business makes less than $30,000 a year, you don’t have to get GST and HST numbers.When you sign up for GST and HST, you can get money back for the taxes you paid on things you bought for your business.
Step 9: Consider Business Insurance:- Small business owners have a lot of problems. If they don’t have insurance, it can lead to bankruptcy.While you don’t have to have business insurance, it’s really important for protecting your business from risks.Because your business is how you make money, think about getting insurance to protect it from big losses or going out of business.The most popular kinds of insurance for small businesses are:
- Commercial property insurance
- Professional liability insurance
- General liability insurance
- Commercial auto insurance
- Product liability coverage
- Business property and contents insurance
- Cybersecurity insurance
- Business interruption insurance
Step 10: Set Up Your Accounting System:- Use a computer program for accounting that will help you keep your business organized. It can do certain accounting tasks by itself like sending invoices, making reports, and keeping track of payments.
Using accounting software helps you follow the rules when managing your finances. It also gives you more free time, so you can focus on running your business.When picking accounting software, think about how much money you can spend, how much the software costs, and what it can do.
Some accounting software companies let you try their product for free before charging you either every month or once a year.Consider the good and bad points of each choice for your business, as both have their advantages and disadvantages.If you feel confident about using a certain software, getting an annual contract could save you money with a discount.
