13 Things You Must Know About Doing Business in Canada
If you are thinking of starting a business, Canada is a great place to be.
For the past two years, Canada has been ranked in the top 1.8% (out of nearly 200 countries) as a place conducive to starting a business, according to data collected by The World Bank.
Doing business in Canada can be rewarding in many ways. And the process to get started is fairly simple, compared to that of other countries.
But there are some things that you’ll want to know before you start to ensure your success from the beginning.
Here is our list of things that you should know before doing business in Canada!
Your Simple Guide To Doing Business in Canada
Starting a new business can be overwhelming at first, but it may be easier than you think.
1. First Things First
When starting a business, you will first need to address the basics.
“What are the basics?”, you may be wondering.
The following is a 3 step mini-checklist to remind you of the first steps that you should take:
- Decide on a business idea that you believe in and are passionate towards.
- Formulate a tentative (first draft) business plan. Don’t know where to start? Click here for a business plan outline to help you with this step.
- Consider which type of business ownership you should choose. Research the advantages and disadvantages of each prior to making a final decision.
2. Your Business Name: Where It All Begins
Once yo’ve completed the steps above, you should have a pretty good idea of your vision for the business.
Now, you need to think of the perfect name that will represent everything you want your business to be about.
This is a major step, in part, because the next several steps build off of it. But also because in the initial phases, signs of outward stability are paramount to gaining the trust of consumers.
You’ll want to avoid altering your business name if at all possible during the first several years while you build your brand.
3. Registering Your Business Name
Once you have thought of the perfect name for your business, you can move on to the registration process. It may be a good idea to have a backup name in the event that your first choice is unavailable.
- You will need to register your business name once you have decided what it will be.
4. Get Your Business Licence
Doing business in Canada often requires a business licence.
To find out the specific licence and permits you may need for your location and the type of business, you can check our BizPal.ca.
5. Register for the Goods and Services Tax/ Harmonized Sales Tax (GST/HST)
While this step is not required unless your company earns over $30,000 a year, it still might be a good idea to go ahead and complete.
Registering for the GST/HST tax makes you eligible for important Input Tax Credits.
6. Register For Provincial Sales Tax if Necessary
Next, you will need to find out if it’s required that you register to pay or collect provincial sales tax, according to guidelines that are specific to the province you will be conducting business in.
If your province is included in those that require registration, then you should follow the recommendations set by your province.
7. Decide If You Will Sell Your Products or Services Online
If you’re going to sell your products or services online, then you should begin considering a domain name, website services, content and other Internet-related items.
Typically speaking, starting an online business can be much simpler than a brick and mortar operation in many ways.
If your primary route of doing business in Canada will be online, then these services will obviously need to be a much greater priority than if you plan to use a facility to operate. If not, then you can decide whether to begin establishing your website for users simultaneously or at a later date once the physical location for your business is up and running.
8. Decide How Many Employees You Will Need And Determine Their Roles and Positions
Now is the time to consider how many people and positions will be needed for the initial phase of running your business.
Once you review your budget to include any salaries, you should begin the search for qualified and talented personnel.
Sometimes, it may not be necessary to hire for every position up front. You may be able to combine responsibilities until your business grows a bit. This can save money, but it might also mean that you have to accept a greater workload.
9. Review Your Budget And Make Adjustments
If you had an initial budget planned, chances are you have already realized that some adjustments might be necessary.
Often times, our initial perception of what starting a business will cost varies from the actual figures. Sometimes this might mean that you need to adjust expense allowances according to a revised budget.
Conduct a thorough examination of your resources to establish a firm budget for your first year. Don’t overestimate your financial position, but don’t be so limited that you will constantly have to restructure your budget just to purchase supplies, for example.
10. Acquire Funding Needed For Initial Operations
If at this point, you realize that additional funding is needed to operate, you’ll have to develop a strategy for acquiring those funds.
Once you begin operating, it would be unfortunate if you couldn’t afford to stay in business long enough to start turning a profit. So make sure to have enough funding, whether from your own pocket or from investors, to meet or exceed your projected cash requirements.
After all, you’ll be putting a lot of time and energy into starting your business. Make sure that you are adequately prepared so that it can be as successful as possible.
11. Buy Business Insurance
Find out what types of business insurance you’ll need. Also, find out how deductibles and other considerations will affect your cost.
If necessary, take your time deciding on the policy that you pursue before you invest.
12. Maintain Meticulous Records
From the minute that you begin to take steps towards operating a business, you need to make sure that you’re keeping meticulous records of any paperwork, expenses, receipts, contracts and any other records related to your business.
This is vital to the success of your company and is often overlooked in the beginning phases.
However, if you don’t form a detailed and organized record-keeping system from the start it could cost you a lot of time and money down the road.
13. Decide On Where You Will Operate Your Business
Depending on what type of business you have, this step may vary in its complexity.
For example, if you are providing a service, it may be possible to work from home, at least at first. While, other types of businesses, such as a brick and mortar retail store, will need to secure a location other than a home address.
Perform research to determine the best value and strategy before you begin to narrow down your search.
Some areas may be cheaper, but there could be too many established competitors for it to be the most cost effective location in the long run.
After you’ve considered all the variables you can think of, and determined a general idea of your desired location, you can begin looking at your options to purchase or lease.
Doing business in Canada might just be the opportunity you’ve always dreamed of, if you’re prepared and willing to do what it takes to be successful.
Perhaps you’ve already been thinking of your business idea for a while, and you’re ready to jumpstart the process to becoming an entrepreneur.
Maybe you’ve already thought of a business name. You can click here to find out if the name you’ve chosen is available right now.
Before you know it, you will be on your way to owning your very own business!