Starting a business in Ontario? Get these 8 things done for a head start, a quick checklist.
So you have decided to start your eventful journey of starting a business in Ontario or anywhere in Canada? We call it eventful because irrespective of outcome, you are in for a ride. You will learn a lot, meet some great people and understand the legalities involved.
Let’s not waste your time and get straight into the checklist. Though this is curtailed specific to Ontario but should apply if you are starting a small business or home run business across Canada with slight nuances. Make sure you verify the nuances with your local authorities.
1. Legal Requirements for starting a business in Ontario
First you need to register your business with CRA and Service Ontario. You will need to make a choice primarily between sole proprietorship or incorporation. If you have a partner, incorporating the business makes most sense. Consult with a lawyer about other partnership deeds and legal permits or check the CRA website to understand what all you might need. You can verify what all you need at Bizpal
Incorporating a business comes with overhead of maintaining minute books, all shareholder meeting proceedings and business transactions. Incorporating also means that your business is an entity of its own. Any liability arising out of business is separate from your personal assets. All business types also have their own tax obligations. Check out other business types and it’s pros and cons here at the Ontario website.
See if you can get template contracts drafted from an attorney to use when selling goods and services to customers or vendors. Need help finding a lawyer or business consultant? Check out your local small business enterprise center.
Based on the nature of your business, you will need a GST account, check out the details here. Make sure you understand how much to charge, how to remit and pay.
2. Before starting a business in Ontario, check if you need a business insurance
Even though not mandatory, business insurance is highly recommended. It can protect you against liabilities when you make a mistake or end up with property or business loss. Check out different types of insurance available for business here.
3. Open a Business bank account as soon as you have registered your business in Ontario
As soon as you are registered, open a business bank account. Set up an appointment with a small business specialist in your preferred bank. Keep your personal and business expenses separate.
Fee and benefits are quite comparable across major financial institutions in Ontario. It is a matter of personal preference to choose the bank. You will be recommended a banking plan based on the number and type of transactions you will or expect to make.
4. Do not start a business without a plan, a must on your checklist
Failing to plan is planning to fail! People often mistake a business plan as an overhead and skip it with a presumption of understanding the market. If not a full blown plan, you at least need the below understanding to be successful.
Make sure you understand your Target Market before starting a business
Who are you targeting? Is it a specific age group or people from a specific region? Is it people with specific behavior? You will need to do some research to understand the likes and dislikes of your target market, understand market size and plan accordingly. This will help you figure out your marketing plan as well. Design your product, packaging, printing as per your target market. Advertise your product or service where they are found, social media, television, billboards on specific places or suggestive selling at other businesses. You can do some initial analysis on StatCan and BDC.
Understand who are your competitors
You need to understand who your competitors are and what their strengths and weaknesses are. What is the one thing that will make you stand out? Why would a customer choose your product over your competitors? Is it the cost, quality or service that is your unique selling point? Do a SWOT analysis, nothing but a simple table with some thought. Write down what are your strengths and weaknesses? Understand that these should be internal about you, your product or your business. Next write down your Opportunities and Threats. These are external, increasing demand or a specific market gap is an opportunity. Threats are external factors that can shut down your product, slow down sales or damage brand reputation.
Product, Price, Place and Promotion
Make sure you understand and have a strategy in place before you launch your product or service. What is your product? What problem does it resolve?
Pricing needs to be at par with competitors OR should at least feel like value for money to customers. Set your pricing as per the value you are adding and demand in the market.
Where will you sell, online? Home run business? Brick and mortar store? You need to make a decision on which Place works best for your product both short term and long term.
Promotion is an important aspect, know where your target audience’s likes/dislikes. Is your target audience on social media OR television? You can initially rely on word of mouth but will need a promotion strategy to scale up your business.
5. In the digital world online presence is a must for your small business
Even if you are not thinking about going all in on digital marketing. It is important to build a social media presence and at least have your business domain name registered. Stay active on social media accounts and run promotions occasionally. TikTok and Instagram can give you a lot of customers.
Branding is an important aspect. It is so important for your store or office and website to resonate the same branding.
Start with a basic website, something that is enough to get you enough money. Fix things on the go, add more features. Make sure you have metrics and analytics to understand what is working and what is not.
6. Make sure you have financial back up before you start a business
Whether you are starting a store, online or a home run business in Ontario or rather anywhere in the world. You need initial funding not just for set up but for your operating cost for the first 2 years. Remember, most businesses take at least 2 years to start being profitable. Make sure you are financially and mentally prepared for it.
Initial funding can come through your personal savings, friends and family, small business grants, micro loans or personal loans. Prepare an excel sheet to plan out your expenses. Make sure you have budgeted for all legal fees, accounting fee, initial set up
7. Keep tabs on your Numbers
It is very important to keep tabs on numbers and keep record of all transactions. You will need to have a good understanding of your highest revenue channel? What operating cost is draining your gross profit? Like I said earlier, get a business account and business credit cards.
Initially when you do not have funds to hire a full time accountant, Wave is a very good software that is 100 percent free for accounting. You can connect your account and have it automatically keep a record of your transactions. You can then come back to categorize payments and get a good understanding of your gross profit and operating cost. Dashboard helps you with a brief summary of cash flow and upcoming payments. You can download the balance sheet and other reports at the end of the year.
8. Every business needs Multiple Channels of Payment
Everyone likes options, making sure the customers can pay the way they want is important. Either at your store using a POS or online.
If you are using Wave for accounting then it makes sense to use it for invoicing too. You can easily create custom invoice templates that go with your branding. Prepare estimates and then convert to invoices. Accept online payments, credit cards and EFT. You can also use Wave to run payroll even if it just for you in the beginning.
PayPal is another trusted name in the industry, it is free to create a business account and you are only charged a fee when you accept a payment. If you are looking for POS and other retail solutions then Moneris can be a great resource. Stripe is a highly recommended payment gateway for your ecommerce website.
Once you have these sorted, you have crossed level One and now can focus more energy on fine tuning your Product and Promotions. We hope this quick checklist for starting a small business in Ontario proves useful and leads you to success.
Our vision at Techware Hut is to make technology available at affordable cost to local and small businesses. Reach out for a free consultation.
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