Running your own business is regarded as an exciting career option for many; it provides the chance to be your own boss while building something of lasting value for yourself, your family, and the community. Starting your own successful small business is not an easy task—nearly 40 percent of new businesses don’t even last for 5 years or less. As a result, you must overcome all odds by working hard, being well-prepared, and remaining creative at all times.
It might look scary at times, but remember that millions of Canadians have done it before with good planning, determination, and ingenuity, so you can also do it. This article is here to help you through the steps to get your company up and running. As your business takes shape, your confidence will grow, and you will develop the necessary skills to grow it further.
Brief information on Starting a Successful Small Business in Canada.
Decide On The Type Of Small Business You Want To Start
Before you start spending money to begin your company, it is essential to ensure your business idea has the potential to be successful. It is a competitive world out there. Taking some time to research your idea will pay huge dividends in the future. You can start your own business and decide how to differentiate it from the competition, who your target customers are, how much money you’ll need, and where you’ll get it.
Before You Start A Successful Small Business It Is Mandatory To
Start With Market Research
To find a profitable niche, it is necessary to do some market research to identify target customers and understand their needs and desires.
Next Come The Finances And Mentors
This is the time to start thinking about where you are going to get the money to start your business. There are more possibilities than ever before, but you have to ensure that the one you pick fits your ambition.
Choose Your Business Structure
This is the next step, where you need to select the structure of your business. There are three types of business structures in Canada.
Sole Proprietorship— It is a very informal business structure and can be created easily, which is why it is the most common structure chosen by new entrepreneurs. In this structure, the business and owner are the same in the eyes of the law and tax authorities. The disadvantage is that the owner is personally liable for all business functions and debts.
Partnership: A partnership is similar to a proprietorship, but instead of one proprietor, there are two or more. A partnership, like a sole proprietorship, lacks a formal legal structure. But partners have some type of contractual agreement that governs their sharing of revenues, expenses, and tasks.
Corporation: When you incorporate a business, you create ownership shares, which produce legal distance between the company and its shareholders. This has tax advantages for owners, provides liability protection from corporation debts, and offers some measure of protection for a company’s name.
Get Your Business And its Name Registered
Before you start your small business in Canada, you will need to find a unique name for it; ideally, you should choose a name that is easy to remember and that represents your business. You have to check if the name is available, as you cannot use the preexisting name for your business. You can conduct a thorough internet search for the name. Also, you can check the government database or government registries to find a suitable name for your business.
Once you have registered your business name, you can register or incorporate your business. For provincial or federal incorporation, include name registration in the process. You may also register a trademark to protect your brand name.
How Much Time Does It Take To Register Your Business In Canada?
Registering your business at the federal level is a simple process that takes around five business days. In most provinces, you can register your business in person, by mail, or online. Depending on the province you are registering in and the method of application; you can receive your business licence within one to 35 days.
After Registration, Open A Business Bank Account In Canada
If your business is incorporated, then you need to open a business bank account under your registered business name. While sole proprietorships and partnerships are not required to have a business account, it is still a good practice to open a business bank account to separate your personal and business finances.
A business bank account will keep track of your expenses in case the Canada Revenue Agency, or CRA, ever requests to audit your business. Having a business account will make it easier to get a business loan if, in the future, your business grows.
Get A Business Number And Tax Accounts
If your business is incorporated, then you will need a CRA business account for goods and services tax (GST) or harmonized sales tax (HST), payroll deductions, corporate tax, or import and export. You will also need a business number in Canada. A business number is a unique nine-digit number that serves as a standard identifier for your business.
Get Your Business License And Permits
Most of the business does not require federal or provincial licenses, but certain licenses and permits are needed at the municipal level. For example, if you are opening a restaurant or café, you will undoubtedly require a municipal operating license. Businesses like daycares or day nurseries require a food premises inspection and food handler certification at the municipal level as well as a provincial child care license.
Understanding Tax Regulations For Entrepreneurs
As a business owner, you have to pay taxes on the income your business generates. In Canada, tax regulations for businesses vary based on their structure. While filing income tax, you need to include income from your sole proprietorship or partnership in your personal income tax return. If your business is incorporated, you need to file a corporation tax return.
Hiring Employees As An Entrepreneur
Your successful small business, you cannot handle everything on your own; therefore, you need to hire more employees for your business. There are some legal formalities that an employer in Canada has to fulfill. In most cases, employment standards are provincially regulated, but there are some federally regulated industries and workplaces as well. Employment standards promote fair treatment and work-life balance for employees, and there are set rules for hours of work, overtime, minimum wages, layoffs and termination, statutory holidays, leaves of absence, etc. As an employer, you will be responsible for payroll deductions, and you have to open a payroll deductions account with the CRA.
