How To Start A Business In Canada – The main goals of most foreigners as they plan their move to Canada is to find stability and have a source of income. As a good number of them seek opportunities as an employee, others aspire to start their own business and become an employer. Going through the process of setting up a company or business in a foreign land can be overwhelming or confusing for many.
Canada is a country with a strong and dynamic economy, making it a great place to do business as an entrepreneur or company owner. As a matter of fact, a surprising 97.9% of the businesses registered on the Statistics Canada Business Register are small businesses.
If you are having it in mind to join in and launch your own company, then you have a lot to think about. Of course the first thing you need is a great business idea and plan, however you will still have to get your finances in order, register with the federal and provincial governments, market your company and connect with your customer base.
This article will guide and help you work through the steps you will need to take to get your business up and running, from coming up with an idea that’ll sell, to planning for the future once you’ve laid the foundation .
Now let’s head right into the article…
How To Start A Business In Canada
- Come Up With a Good Business Idea
It doesn’t matter where you are in the world; any successful business begins with a good idea. Study your skills, see what is treading, and look for ways to improve upon existing concepts or contribute something new to the market. Then you carefully test your idea before you invest serious time and money into it.
- Write a Business Plan
Now to test your idea, you should turn it into a business plan. With this, you can carefully examine everything about the industry, products, and market for your business. It will also give you something to show before your investors and lenders.
Before you bring your business to the public, you should have a thorough, complete business plan to guide you. As you begin the process, it’s possible to put together a quick-start plan that will help you know whether your business idea is viable.
- Choose a business name
When choosing a name for your business, it comes with both legal and marketing considerations. The Canadian government places more name restrictions on corporations than on sole proprietorships, yet business owners will have to consider legal issues when picking a business name. Many businesses will have to register their name with the Canadian government. And when it comes to marketing, your business name should tell what the business does in a way that’s visually interesting, memorable, and positive.
- Choose a Form of Business Ownership
As you plan to start up your business in Canada, you should bear in mind that there are only three basic forms of business ownership that you can choose from for a business structure: the first is sole proprietorship; the second is partnership, while the third is corporation. When it comes to deciding which structure is right for your business, it will depend on some factors, starting from your comfort level with liability to the tax deductions you want for your business.
- Register Your Business With The Government
You may not necessarily have to register the name of your start-up and you also can, all depending on how the business is structured. You don’t need to register if you are the sole proprietor operating under your legal name, like a freelancer. Although, if your business is a partnership or corporation, then you will have to register the name, and you may also want to register a trademark.
In addition, the registration requirements will also depend on the type of business structure you use, and where you set up shop. The Government of Canada’s website offers links to start-up business support for each province/territory.
- Find Small Business Financing
As some business owners can finance their new small businesses from their personal finances, some others need an infusion of funds from other sources to start up. If you fall in the second category, then there is no need to be worried or discouraged as there are many options to consider, from debt financing to sharing equity to government grants. All you have to do is understand the differences between each kind of financing, and make sure that you are prepared to deal with the obligations of whichever ones you choose.
- Get a Business License
Although it may not necessary for all businesses, many new businesses will need to get business licenses before they can operate legally within their location. If there is no website for your city or town, you can find contact information for government agencies on the internet.
You may also need other licenses and permits depending on the business you are starting. You can make sure of Industry Canada’s BizPaL to find out what permits and licenses you will need to do business. Can be found in most provinces and territories, BizPaL will provide a personalized list of the business documents you need for all levels of government
- Choose a commercial space
When the time comes to set up your business in a commercial space, you will have to make some vital decisions, such as whether to buy or rent and how much you can afford to pay. For some types of businesses, such as retailers, location will definitely be a major consideration. For others, like tech start-ups, it will be less important. (So many companies are foregoing a commercial space altogether in favour of working virtually.)
Some other essential factors in your choice of office or commercial space include access to the property for employees and suppliers and whether you will need to make some improvements to the property to run your business.
Note: If you are renting space, you will probably have to sign a commercial lease.
- Apply for a CRA business number
I’m addition to the business permits and licenses; you will also want to apply for a business number, which is used for income tax purposes. You can do this online or with your phone through the Canada Revenue Agency (CRA).
You must be sure to research the basics of paying taxes when you are self-employed.
- Open a business bank account
It’s advisable to keep your business banking separate from your personal banking, and the best way to do this is by using a business bank account.
Businesses bank accounts operate like regular bank accounts but usually also include features and perks designed for different business types’ varying sizes and needs.
- Apply for a business credit card
Another great way to keep your personal finances separate is by getting a business credit card. The best business credit cards function like a personal credit card and come in handy when purchasing supplies, meals for clients, gas for company vehicles, and other business expenses.
- Hire employees
As your company gets off the ground and begins to grow, you will likely need to hire employees. As an entrepreneur, this could be one of your most challenging tasks, usually at a time of labour shortages in many parts of the country.
It is advisable that you prepare ahead for everything you’ll need to set up to make sure you are legally covered to hire employees in Canada. Some of the important things you need includes; handling payroll deductions, worker’s compensation insurance, and employment insurance.
- Buy Additional Business Insurance
Aside the legally required employment insurance, your business may require additional protection. There are so many policies covering property, general liability, business interruption, key people, and disability. Make sure you discuss these options with an insurance agent and lawyer to decide which ones suit your business.
- Market Your Business
After all you must have done to organize and launch your business, do not forget that there is one more important step left: promoting your business. Your marketing strategy should have been planned out when you made your business plan, but now is the time to put that plan to work. Start changing those plans into goals and specific marketing initiatives so you can get your business off to a great start.
Frequently Asked Questions
The prices can range from $500 to upwards of $10,000. The fees of getting registered are not the same in each province. For example, in Ontario, the cost of getting registered starts at 134$+ tax. In Alberta, a small business startup fee starts at 113$ + tax.
Even if you want to start a new business in Canada but you live abroad, immigrating is not really a necessary choice. As a matter fact, the Investment Canada Act was created specifically to govern non-Canadians who choose to establish a new Canadian business or who acquire control of an existing Canadian business.
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Canada is a great place to start a business as the economy is quite friendly for business owners, employers and employees. So if it’s your dream to start a business in Canada, with this article we are glad to have contributed to making that dream a reality. All you have to do is carefully follow all the information we have given about how you start a business in Canada and you will be on your way to becoming a business owner in Canada!
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