How to Start a Business in Canada: Complete Guide for Entrepreneurs

Do you understand the legal requirements of owning a business? 

After asking yourself some broad questions, such as what you hope to accomplish and how far you’d go to see your dream realized, you’ll want to familiarize yourself with what’s required when setting up a business.  

• The structure: Are you the sole proprietor or will you have one or more partners? Is it a corporation or a co-operative organization? Keep in mind that whichever structure you choose will come with different legal and tax implications. 
• The name: Make sure your business name is memorable and unique by doing a name search.  
• The location: Decide on an official address and the provinces and territories you plan to service. 
• The registration: Once you’ve settled on the above, make sure to register your business with the necessary provincial, territorial or federal bodies. 
• The incorporation: After registering your business with the government and getting a business number, you may want to incorporate. Incorporation enhances credibility, offers you liability protection by separating your personal assets from your business and can have tax benefits. Talk to an advisor to ensure you’re making the right choice for your business.  

Are your business model and plan well thought out? 

To set your business up for success, you’ll need a solid concept and products or services that clients are willing to pay for. A strong business model and plan will make you more adaptable to fluctuations in the market and help you understand how to meet those changes head-on. 

When mapping out your business model, start with your value proposition: What is your offer? What need does it meet? Who is your target market? And how does it compare to other products and services in your industry? 

Some other elements to consider are:  

• Cost structure: The expenses your company incurs.   
• Revenue streams: What form your revenue will take, such as one-time payments (a sale, for example) or recurring payments (like subscriptions). 
• Customer relationships: How you interact with your customer base (personal service, automated service, self-service and so on). 
• Key resources: The assets you’ll need to function, including your employees, facilities and physical materials. 
• Key activities: How you’ll build up and maintain your business, and generate revenue. 

A business plan will overlap with your business model but has a different purpose: it’s a detailed description of how you’ll reach the goals set out in the business model. In order to move forward, you need to understand the market, your competition and the needs of your customer base.  

Companies require a well-designed business plan to attract potential investors and obtain financing. Financial projections are an important part of your business plan. Look at the forecast of income and expenses in your business model and make projections for the coming years. You’ll also need to set a price for your product or service. You should consider both your expenses and what clients are willing to pay before fixing your prices. 

Your marketing plan is another key element in your overall business plan. Even the best idea in the world will flounder if no one knows about it. Think about how you’ll promote your product or service to grow your business. Develop trust-based relationships with your partners, suppliers and clients to build loyalty. 

Do you have access to financing? 

Financing is, of course, crucial to a business’s success. Before launching, you should have a financial cushion that can cover three months’ worth of operating expenses. Once that’s in place, there are various ways of financing your business. These include: 

• A business loan from a financial institution, either short-term or medium- to long-term. 
• “Love money,” otherwise known as support from friends and family.  
• Grants and subsidies from the government, including at the federal level.  
• Alternative financing options, including crowdfunding, angel investors and venture capital. 

Do you have the right support? 

Whether you’re starting a business on your own or with others, there’s a good chance you’ll need outside help, especially at the beginning. While each business’s needs are unique, the list of professionals and suppliers whose services you’ll need might include a legal or financial advisor, an accountant, a marketing or logistics expert, a customs broker or a website developer.

Even with the best help, some tasks are difficult to delegate. It’s crucial that business owners have an understanding of what goes on with their company. For example, even if numbers aren’t your strength, you must understand financial statements. Whenever possible, take advantage of training offered to entrepreneurs and encourage your employees to do the same. Your staff members are key contributors to whether your business thrives or simply survives. Investing in training for your team will allow you to remain competitive in an ever-changing market and help your company evolve. 

Is now the right time to launch your business? 

There’s rarely a perfect time to start a business – there’s always an element of risk involved. The key is to make sure your business is meeting a need, that it’s in a growth industry and that you’re aware of potential pitfalls and have planned for them. Doing so will help you and your business mitigate risks and weather uncertainty. 

If you’ve thought about your project for a long time, asked the right questions, laid the proper groundwork, collected the funds required and gained a solid understanding of the current economic landscape, you’re most likely ready to launch your business.

If you’d like to discuss your ideas and benefit from our advice, we’re here to help.