Getting Started on Your Small Business
A business usually starts as a simple idea. Maybe you have a new product idea or invention. Maybe you want to distribute products from your homeland to the Canadian market (or vice-versa). Maybe you just want to purchase an existing running business or franchise. Or maybe you have a specialty service to market as a self-employed person or a small boutique firm (i.e. web designer).
But, before you start the process, there are two initial steps to take before you venture out.
1. The first is to better understand the market or need for your product or services, particularly in the Canadian context. Ask yourself if there is a need for your small business in your community? What is your target market? Is the industry in demand?
You have to do plenty of research on the industry as a whole (see Industry Canada, a great resource for this), plus look at your local market and competitors. If you’re planning on opening a sushi restaurant on Bloor Avenue in Toronto, find out who your competitors will be, both Japanese and other restaurants.
2. Once you have a clear understanding of the market, and feel your business meets a need, the second step is to start planning, i.e. make a business plan.
A business plan is an essential document in launching a small business in Canada. Find help in writing a business plan with a professional business consultant or some of these online resources:
Choosing a Legal Entity Option
Starting a business is one thing, but how will you structure it? There are many considerations in how you form your business and its legal structure. There are pros and cons with different types of legal entities, which include:
- sole proprietorship (the simplest form as you don’t create a separate legal entity for it, but it also means you are personally responsible so creditors can go after your personal assets)
- partnership (if you are running the business with one or more partners)
- corporation (the business is a separate legal entity from you and your personal assets)
You must also decide on and register a name for your business. You will require proof of this business registration in order to open a bank account, for example, for the company.