What You Need To Know About Starting A Small Business In Ontario
If you’re thinking about starting a small business in Ontario, you picked a great time. As a matter of fact, there’s never been a better time to start a business in Canada.
Of course, you still have to jump through the usual hoops.
You’ll need to choose a business structure and select a working business name, but that’s just the beginning. There are a lot of tasks ahead of you.
So how can you make the process of starting your business easier?
By educating yourself.
Fortunately, we’re here to help you do just that. Keep reading to find out what you need to know about starting a small business in Ontario.
Before Starting a Small Business in Ontario
Before you start a business anywhere, you need to have a plan. That plan should be specific and well-thought-out.
Ask yourself some crucial questions. Does your business help solve a problem? Is there a market for your services?
You’ll also need to ask yourself a multitude of other questions. Luckily for you, we’ve already provided you with a list of those questions.
Once you’re sure that you have everything plotted out, you can move on to the next step.
Choosing a Business Structure
You are now ready to think about how you want to structure your business. You have three main options to choose from. You can choose a sole proprietorship, a partnership, or a corporation.
The structure you choose will depend greatly on your financial situation and preferences. Follow along as we discuss these three structures.
As a sole proprietor, you have the only say in what happens with your business.
Of course, that comes with some major tradeoffs.
For one, you have to fund your business yourself. Yes, you can apply for loans. Banks, however, can be wary of loaning money to a sole proprietor.
You are also responsible for all of the top level management. You have to stay on top of your paperwork and business obligations.
Further still, you are completely liable for anything that goes amiss. We don’t need to tell you how much of a burden liability can be.
As you can see, a sole proprietorship puts a financial burden solely on the owner. If you can’t handle that burden, you might want to consider the next business structure we’ll discuss.
A partnership is exactly what it sounds like. You partner up with at least one other person and start a business together.
Unlike a sole proprietorship, a partnership doesn’t give you full control over your business. You have to run all of your ideas by your partner(s) before executing them.
Some people, though, are willing to trade that for more financial stability since partners share the financial burden of maintaining their businesses.
Not only that, but they share the workload and are also liable if things go haywire.
Unfortunately, however, there is a major downside to this business structure.
Simply put, sometimes partnerships crumble for one reason or another. Some partners’ personal relationships weaken over time. Other partners have business disputes with each other.
So what can you do to make sure that these business disputes aren’t too damaging to you?
Draw up a contract which strictly outlines the nature of your partnership.
This business structure is the most complicated of the three we’ve listed here. It is also more expensive.
Consequently, many small businesses don’t go this route.
However, there are some major benefits to incorporating your business.
For instance, business owners who incorporate their businesses have limited liability. Incorporating can also help extend a business’s life, and make the business easier to pass on or sell.
In addition to the potential tax benefits, many lenders are also more comfortable lending to a corporation. Which can help your business grow bigger, faster.
Selecting a Name
The time to select a name for your business has come.
Choosing a name, however, is tricky business.
Where do you start?
We’ve got a couple of hints for you.
The Marketing Standpoint
The name you choose for your business can set the tone for it. As a result, that name should reflect your long-term goals and be specific.
Let’s first consider those long-term goals. Are you looking to eventually expand your business? Do you think you’ll want to get a trademark at any point?
If so, you’ll want to make sure that the business’s name isn’t too generic or similar to other business’s names.
And how do you address that specificity we spoke of?
What do people in your target market need? What do they like? Is there a way in which you can make the name appeal to their needs and interests?
As luck would have it, there are several marketing tools you can use to look at the data that’s relevant to your name search. You just have to know how to use them.
The Legal Standpoint
Marketing aside, your choices are limited by the law.
You can’t, for example, name you new computer company “Microsoft”. That name is well-protected and will continue to be so for quite some time.
Even an accidental similarity in name or logo can be cause for legal problems.
You can avoid these problems by thoroughly researching your proposed business name. We actually have a free NUANS Preliminary Search tool which helps you check out any business names you’re considering.
Deciding on a Location
Yes, you’re starting a small business in Ontario, but Ontario is a large province.
Generally speaking, you want to choose a place which has a high demand for your services. Even so, you might also want to keep your business close to any manufacturers it relies on.
In the end, you have to weigh all of your options and make the decision that best meets your particular business needs.
The process of starting a small business in Ontario doesn’t have to be long and complicated, but, in most cases, you’ll need to register your business.
The registrations steps are dependent on the business structure you decide to use. However, regardless of the business structure, the process can be completed in as little as 2 business hours.
Every business is subject to certain rules and regulations, and for good reason.
And, yes, you need to know these rules beforehand.
Having said as much, we’re going to briefly discuss some of the health and safety rules your business will be subject to. We’ll also talk a bit about permits.
Health and Safety
Health and safety rules differ greatly from place to place. They also differ from industry to industry.
As a result, we can’t tell you exactly which regulations you’ll be expected to abide by.
We can, however, link you to a list of sectors that are regulated by the government. You’ll find everything from agriculture to textiles on the list. Just make sure you take your time and find out which regulations apply to you.
Depending on the nature of your business, you may need a permit to legally conduct business.
That said, you should plan accordingly.
BizPal is great resource to help you determine any additional permits or licences you may need.
Hopefully, starting a small business in Ontario now sounds a little less daunting.
In any case, you’re one step closer to launching your small business. You just have to stay motivated and follow a solid business plan.
If you can do that, your business will grow. Just give it time.