Table of contents
- Four Frequently Asked Questions About Starting a Business
- Find a Location
- Seek Financing
- Decide on Your Business Structure
- Choose a Name and Do the Required Legal Paperwork
- Get a Payments Processor
Intro to Starting a Business
So you’ve decided to venture out on your own and start a business. First, congrats on taking the plunge—being in business for yourself has personal rewards above and beyond any monetary success you might achieve. There’s autonomy—and knowing that every milestone is the result of your own blood, sweat and tears.
Whether this is something you’ve been dreaming about for years or a new idea, you need to make a plan before you dive in. This guide walks you through the steps required to start a business, so you’ll be ready to hit the ground running.
And remember, while this post will help you get started, you should seek the advice of a legal or financial expert for your specific needs.
Four Frequently Asked Questions About Starting a Business
How do you start a business?
There are several crucial steps involved in starting a business, including writing a business plan; securing financing; researching and choosing a location; registering your business; complying with tax requirements and filing applicable licenses and permits.
How do you write a business plan?
A business plan is like a blueprint for how you’re going to start, run and grow your business. Key components include an executive summary, business description, market and competitive analysis, your service or product line, an operations plan and any financial considerations.
How do you decide on a business structure?
Types of business structures include sole proprietorships, partnerships, corporations and cooperatives. It’s a good idea to consult with an accountant or lawyer as you decide on a business structure.
What paperwork do you need to do to start a business?
To start a business, you may need to register your business and your business name, possibly register for GST/HST, and obtain relevant licenses and permits.
Write a business plan
You can only see a stellar idea through to its full potential if you lay the groundwork. That’s where the first crucial step of starting a business comes in—writing a business plan.
You need a business plan for a couple of reasons. First, it’s a blueprint for how you’re going to start, run and then grow your business—something you can look back on for reference and measure yourself against. Second, if you’re seeking outside funding for your venture, you need a business plan to show potential funders that you’ve thought things through carefully.
A solid blueprint is critical for your prolonged success.
When it comes to writing a business plan, there’s no one size fits all. To construct a plan that fits your business, it might be a good idea to enroll in a course at a local community college or even online. There are a wide range of resources out there to help entrepreneurs like you get started.
Even though business plans may vary from business to business, they all typically contain a few key components. When you think about formatting, it’s a good idea to use the sections below as a template—including visuals like graphs and projections where appropriate. Length can also vary depending on how you will be using the final version but, typically, business plans are between 15 and 20 pages long. Here’s what they should include.
An executive summary
As the first section of a business plan, an executive summary should be an outline or synopsis of your business and how you plan to accomplish your goals. Because it’s often people’s first impression, it’s the most important section. You might consider writing your executive summary after you’ve completed all the other sections of the business plan, so you know the key points to emphasize.
Think of this section like your elevator pitch, i.e., how would you concisely answer the question “What’s your business all about?” This part should also include where you see the most potential and opportunity for your business, and why.
Here’s where you dive deeper into the specific market you’re entering. What relevant data points would help people get an idea of your business segment? Where are the weaknesses in the market, and how will you fill that void? This can get pretty complex, so be sure to check out our guide on how to do market analysis.
What are other businesses in your industry doing well and where are they falling short? If you don’t currently have competitors, walk the reader through how you’ll stay ahead of the game should another business choose to enter the market. An easy way to do this is through SWOT analysis, which can help you figure out your strengths and weaknesses.
Service and product line
This section details exactly what type of service or product you’re offering. Be sure to include any intellectual property rights that you have secured. Research and note any further development that might be required to bring your product or service to market.
Operations and management plan
Present a clear picture of how you’ll actually run day-to-day business operations. Will you need employees? A space for shipping or inventory? Describe all that here.
Here’s where you talk money. First, how much do you need to start? And then to grow? Detail any capital you already have. And if you need more, describe your strategies for procuring it. Our cash flow analysis is a great place to start. It’ll give you an idea of how much money you’ll have to work with when starting out.
Seek additional training and resources
It’s rare to have all the skills you need to start and run a business—especially if you’re doing this for the first time. You may have the skill set and certifications necessary to do facials, for example, but might need more training to learn about running the day-to-day financials of your business.
Write a list of all the areas where you could use a little coaching. Then seek out training or education to fill those gaps. Community colleges or online courses are a great way to acquire additional skills and training affordably. Here’s where you may also seek out mentors or even ask fellow small business owners how they brought themselves up to speed.
There may be areas, however, that have too steep of a learning curve to tackle on your own—legal or tax considerations, for example. In these cases, it’s best to seek out professionals who already have years of training and degrees in those disciplines. When hiring these people, be sure to do extensive research and call references to make sure you’re bringing on someone reputable.
Find a location
Where will you be conducting business? For obvious reasons, this can vary widely based on the type of business you’re running. If you’re a home contractor, for example, you may not even need to rent a physical office. But if you’re opening a salon, you’ll need a space you can use for cutting hair.
Choosing a physical space is one of the most challenging aspects of starting a business. But it’s also one of the most important and requires a lot of research and planning. For starters, you need to understand your city’s zoning laws and have a solid grasp on all the costs (like taxes or any hidden fees) associated with renting a space. For help with this, talk with your city and neighbourhood councils, or consider bringing on a professional agent to help.
Aside from laws, fees and regulations, you should also consider your brand image; the safety and accessibility of the neighbourhood; your proximity to any suppliers you might need to work with and any plans for expansion. Talk to fellow business owners in the area and consult free government-provided data on neighbourhood and city demographics to help inform your decision.
Seek financing (if necessary)
If you don’t have the capital required to start your business, you may need to seek financing. (Here’s where that business plan you wrote comes in handy.) Luckily, there are a number of avenues for securing small business financing. But before accepting money from any of these sources, there are some questions you need to think through. For example, evaluate how you’d like to structure ownership of the company. If you don’t want to give up a stake, bringing on investors may not be the right option for you. If you’re accepting a loan or financing from an institution, be sure to read all the details. You should be careful about calculating how much money you really need—and do meticulous math on how long it will take to pay it back.
Understand the tax and legal implications of your selected business structure.
Decide on your business structure
There are a number of different ways you can set yourself up as a business. Each type of business structure has a variety of tax and legal implications. It’s smart to consult a reputable accountant and lawyer before officially deciding on what form of business entity you want to establish. It’s also a good idea to spend some time reading the Canada Revenue Agency’s website to get more advice.
To give you a cursory lay of the land, the main types of business structures are sole proprietorships, partnerships, corporations and cooperatives. Check the Canada Business Network’s website for more detailed explanations of each of these structures.
Choose a name and do all the required legal paperwork
Now for all the paperwork. You need to get a Business Number (BN), so you can also register for GST/HST, import/export and payroll with the federal, provincial and municipal governments. You can file for a BN in a number of ways, including online or by phone. Check the Canada Business Network’s website for a detailed explanation of how to apply for a BN.
Starting a business requires that your legal paperwork is in order.
You may also need to register for GST/HST if you earn more than $30,000 a year. Check the CRA for more information on signing up for voluntary or mandatory GST payments.
You may also need a number of federal and provincial licenses and permits. The required licenses and permits vary from business to business—so be sure you have all the ones you need before you set up shop.
If you’re planning on hiring employees, now is the time to familiarize yourself with all your legal obligations as an employer, such as keeping employee records, setting up payroll and deducting taxes and EI. You’ll want to cross your t’s and dot your i’s before you hire your first new team member.
Get a payments processor
Now comes the fun part—making your first sale. To do this, you’re (obviously) going to need a way to accept payments. Do your research. Any solution you go with should be affordable and easy to set up. It should also accept credit cards and have no complicated fees.
People are increasingly ditching paper bills and opting for plastic. A recently released Payments Canada study showed that 50 percent of Canadians are ready to ditch cash for good. So if you don’t accept cards, you’re likely to miss out on some sales. The Square Reader for magstripe, which accepts all major credit cards, plugs right into your phone so you can securely accept card payments everywhere. The reader is free, and you pay just 2.65% per swipe.
The steps can seem overwhelming—but they’re worth it.
The steps to starting a business can seem overwhelming—but they’re all worth it. No matter how stellar your business idea is, laying the groundwork is a crucial component of your success. Follow these steps, and you’ll be off to the races.
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