What is the Best Way to Start a Small Business in Canada?
Opening a business in Canada can take a lot of energy and can be expensive on a mental, physical but above all monetary level if you do not have precise ideas. The steps described are those that should be followed in order to open a small business without too many hitches, focusing on efficiency and success.
Select a Type of Business Ownership
When it comes to founding a business in Canada, there are just three fundamental kinds of business ownership to select from: sole proprietorship, partnership, and corporation. Within them, there are a few possibilities, such as a cooperative corporation or a limited partnership, but they all come under these three categories.
The structure that is best for your business will be determined by a variety of criteria, including your degree of comfort with responsibility and the tax deductions that you desire for your company.
Find Financing for Your Small Business
Unfortunately, not everyone can afford to start a business without requiring outside funding to get started. From debt funding to stock participation to government aid, there are numerous choices to explore. It is important to keep in mind the distinctions between each type of financing and make sure you’re ready to meet the responsibilities of whichever one you choose.
Obtain a Business License
Before they may legally function within their communities, many new firms will need to get business licenses.
Register for the GST/HST
Unless your new small business’s gross revenue is less than $30,000 for four consecutive quarters, you will be required to register for the goods and services tax (GST) and the harmonized sales tax (HST) (HST). The small supplier exemption level may not apply to all firms, though. Even if you aren’t generating much money at first, you should register for GST/HST right away because of Input Tax Credits, which are essentially your means of reclaiming the GST/HST your firm has paid out on purchases for business purposes.
Sign up for the Provincial Sales Tax (Some Province only)
If you are beginning a business in Alberta, British Columbia, Manitoba, or Saskatchewan, you must register as a provincial sales tax collector (PST). In Quebec, you must register for the Quebec Sales Tax (QST). There are three types of sales taxes in Canada: PST, GST and HST.
Get Ready to Hire
Hiring workers may be the last thing on your mind when you’re establishing a business. However, prepare ahead of time for everything you’ll need to set up in order to lawfully hire staff in Canada. Handling payroll deductions, worker’s compensation insurance, and employment insurance are all part of the job.
Purchase Additional Commercial Insurance
Your company may require additional protection in addition to the legally necessary employment insurance. Property, general liability, business interruption, key personnel, and disability insurance are also available. Make careful to explore these alternatives with an insurance agent and a lawyer to determine which ones are best for your company.
Establish Your Record Early
Accounting and paying taxes become considerably easier if you keep solid records from the beginning. Start by setting up a separate company bank account and keeping track of and organizing your receipts. Using basic accounting software early on will assist you in staying organized and scaling your firm as it expands.
Promote Your Business
Don’t forget to promote your business after all the hard work you’ve put into arranging and launching it. When you created your company plan, you should have already established your marketing strategy, but now is the time to put it into action. Start converting your objectives into goals and particular marketing activities to get your company off to a strong start.