Thinking of starting a business?
Being a business owner can be a hugely rewarding step in your career. If you’re thinking about starting your own company, the chances are you have an idea or concept already in place. Now, it’s time to turn that idea into a plan for success, thinking about things such as how you’ll finance getting started, how you’ll cover your costs and turn a profit, how you’ll expand and grow your business - and importantly, and if you’re ready and willing to put in the hard work needed to make your business venture a successful one.
Creating a business plan
To get started, you’ll need to draw up a business plan.
Not only will this be required if you plan on taking out a loan or asking investors for money to help get your business up and running, but it can also help you answer some key questions, such as:
- Why is now the right time to start your business?
- What’s the supply and demand in your local market as well as the wider online marketplace?
- Is your business solving an existing problem/gap in the market, or are you creating something new and innovative?
- How do you plan to market your business and reach customers?
- What’s involved in terms of logistics?
- Will you need a physical location, such as a storefront, office, or warehouse, or is your business online or mobile?
- Do you need employees, or will you work solo?
A key part of your business plan will include how you plan to finance your business, through sources such as your own capital, loans, small business programs, investors, as well as government grants and resourcesOpens a new website in a new window.
There are 3 ways to structure a business in Canada – forming a corporation (also known as incorporating your business), forming a partnership, or setting up as a sole proprietor. The structure that’s right for your business will depend on a number of factors, so it’s important to think about which will work best for you before it’s time to register.
Other things to think about include whether you’re starting the business from scratch, or if you plan to take over an existing business. And while it may seem a long way off, figuring out how you’ll leave the business should be a part of your plan as well. You may want to eventually leave the business for several reasons, such as:
- You plan to return to full-time employment
- You plan to retire
- You plan to start another business
- The business simply hasn’t worked out as you’d hoped
Succession planning can help you answer important questions about what happens to your business if you choose to sell it, close it, or leave it to someone else such as a business partner or family.
Registering your business
Before you can begin trading, you’ll need to register your businessOpens a new website in a new window with the Government of Canada.
You’ll need to provide some information when you register, including:
- The proposed name of your business
- A registered business address
- A list of provinces and/or territories in which you plan to operate
- If you’re registering as a sole proprietor, corporation, or a partnership
You can register your business onlineOpens a new website in a new window yourself, or you can find a companyOpens a new website in a new window (known as a formation agency) that can do this for you.
Protecting your business
Before you start operating your business it’s a good idea to think about how you’ll protect it in the event something should happen to you.
There are many types of business insurance available, and which will be the best fit for your company will depend on your specific needs and requirements:
Business-owned life insurance
If you, your business partner, or a key employee dies, life insurance can provide your company with a one-time payout which can be used to cover debts or running costs.
Business-owned critical illness insurance
Critical illness insurance can provide your business with a tax-free payment if you or a key employee is diagnosed with a serious illness.
Business-owned disability insurance
This insurance can provide a monthly income to help your business running should you suffer an illness or injury.
Putting an insurance policy in place can help protect the business you’re starting or you’ve worked so hard to build up, and with flexible options available to provide both short- and long-term coverage, you have options when it comes to finding something that works for your business.
Growing your business
If you plan to grow and/or expand your business, focusing on 2 areas will play a key role in your success:
Attracting customers
Having an outreach and marketing plan in place is important to any company, but perhaps especially for small and/or new businesses.
You may choose to do your own marketing or hire a professional or an agency to handle this for you. There are paid media opportunities to think about and budget for, as well as free resources for social media and networking. Traditional advertisements, offering promotions or discounts, using word of mouth and of course setting up a website are all great ways to gain some initial traction and grow a small customer base.
If you reach the goal of growing your number of customers, you should also have a strategy in place for how your company will expand to cope with growing demand. Part of that may include having a plan to find, hire, and keep great employees.
Attracting employees
One great way to stand above the competition and attract top talent is to offer a group benefits plan.
Group benefits can help employees cover the cost of medications and treatments that provincial or territorial may not pay for, such as prescription drugs, dental and vision care, and more.
Not only can offering a benefits plan improve hiring rates and employee retention, but it can also help reduce rates of absenteeism while improving employee wellness and morale. The amount it costs to offer a benefits plan will depend on a few factors, and there are some potential tax advantages that may be available to you as a business-owner.
Whether or not you choose to offer a benefits plan is up to you, as is the size of plan you select. There are options for small and medium business, so companies with as little as 2 employees can put a plan in place.
You may also think about combining your group benefits plan with a retirement and savings plan to help your employees reach their long-term financial and retirement goals. There are 3 options available – a Group registered retirement savings plan (RRSP), a Group tax-free savings account (TFSA), and a Deferred profit-sharing plan (DPSP). Employees can contribute using automatic payroll deductions, and there may be tax benefits available to you for offering the plan as well.
While you’re thinking about offering a group savings plan, it’s a good idea to also think about how you as a business owner plan to retire. It may be that you plan to sell your business to help pay for retirement, or use a combination of personal investments and savings along with government benefits like the Canada Pension Plan (CPP) or Old Age Security (OAS).
Speaking with an advisor can help you decide what’s best for your retirement plans based on your own circumstances, and of course, your new business.