When you decide to start a business for the first time, it is important to know that creating a solid business plan is vital to your success. A good business plan will help you know where you are headed long before you get there. Writing your business plan requires doing your homework and making some decisions. The research and choices will have a great deal of influence on how your business is structured and in what direction your business should go.
The first thing you need to do is to decide what type of business structure will work for you . You have to decide if you are opening your business as a sole proprietorship or other structure, such as a partnership or corporation. Your choice of business structure will have liability and tax implications, so you really need to do your research and find out what works best for your business model.
Now that you have decided on your business structure, you need to gather some market research and industry statistics. Bet that you did not think you would ever use that statistics “stuff” you learned in school, but now it is key to the success of your business.
Choosing a name for your business may sound easy, but there are factors you need to consider. You need to find a business name that reflects your product or service, but it also has to be unique and easy to remember. You may want to find a few names and do some Google research to see if another business is operating under that name – or that someone has a domain name that is similar to that name. You do not want potential customers to find someone else’s website or business when searching for you. Once you have found a name that meets these criteria, you should register the domain name in order to secure it.
As part of your research into starting your business, you need to find out if business activity is regulated or the industry you are working within is regulated by the government or an industry-run organization. If your product or service is covered under a regulator, you need to register with them and ensure that you are in compliance.
In many of our blogs, we have stated the importance of location. This is key to how your customers see you and decide to do business with you. If your new small business is retail or is reliant on walk-in traffic, you want to be in a convenient location for your core demographic. If your business is service-based, you want to be located in a prestigious business area. This shows your potential clients that you are serious about doing business.
A big part of your business plan is how you are going to market your business and sell your products and/or services. Marketing is the real key to your business success, because if no one knows about your business, you will be hard pressed to make sales. You also need to know if you are going to have an inside or outside sales force. Are you going to have salespeople doing cold calls, or are they going to be glorified order takers working at a desk?
If you are planning to seek financial help to get your business going – either from a start-up loan, an investor or from a government grant program – it is imperative that you have a thorough business plan with a comprehensive financial statement. Remember that your business success will depend on how well you plan, and manage your finances.
When writing your business plan, you should know what elements are considered essential and know the key points that should be included in each section of your plan.
You have solid business plan, now what? Now you need to register your business and take care of all your registration and licensing requirements with municipal, provincial and federal governments. Once you have registered your business, you need to obtain a business number, your registered name and apply for a GST (Goods and Services Tax) account or an HST (Harmonized Service Tax) in provinces that do not have a separate provincial sales tax.
The CRA (Canada Revenue Agency) website for business registration is a great place to start registering your business. This is where you register for a business number, GST/HST, corporation income tax, payroll and import/export designation. If you are going to be operating in the province of Quebec, then you need to register using Revenu Québec’s Businesses Portal.
On top of federal regulations and tax requirements, you may also need to find out what provincial or municipal licenses or permits you need to operate your business. Most provincial and territorial governments require that you register your business with them. In some provinces, you not only have to collect GST, but you also have to register and collect PST (Provincial Sales Tax) on products sold. As well, in Ontario, you may be required to pay the Employer Health Tax.
We hope this blog has given you some insight into opening a business in Canada. You can gather more information from the CRA website CRA.GC.ca.