How to Start a Private Business in Canada
Starting a business in Canada may seem like it’s something that only selected individuals with the right talents and personalities can do. However, once you get to understand better about how the business system works and these entrepreneurs in person, then you’ll be able to know that countless number of business owners actually have various kinds of talents, backgrounds, skills and personalities.
As a result, you may, in fact, be an excellent candidate to be a next successful entrepreneur that can start and run anything from small to large business. If you are considering about setting up a new business in Canada whether you have been born and raised in Canada, or you have immigrated to Canada or you are contemplating about immigrating to Canada through entrepreneurship immigration programs, then you can read further to find out general guidelines on how to setup a business in Canada.
SETTING UP A BUSINESS
Step 1: Business Idea Generation.
Brainstorm and identify what type of business suits you the most based on your interests, skillsets, experiences and available resources.
To take an example, a potential candidate is passionate about baking a delicious traditional Korean bread and is also interested in franchising her business in the future (interests). She knows how to bake various types of these breads that are popular in Korea. Moreover, she graduated from a business school back in Korea and learned about franchising a business (skillsets). She worked as a store owner of a popular bakery franchise in Korea for 5 years (experiences). In addition, she has saved enough financial capital and business knowledge to properly invest in Canada to run a company of her own (available resources).
This candidate may setup a bakery business in Canada and provide a unique product (traditional Korean bread) in Canadian market with a potential of franchising nationally throughout the country by systematically planning for her business.
Step 2: Business Incorporation.
Once you have a clear idea of what type of business that you’ll be operating in the future, then you can move on to incorporate a company of your own. Ensure to follow the regulatory requirement set by your province. For instance, Alberta government requires an incorporated company to have a 25% of the total number of directors to be either a Canadian citizen or a permanent resident. Also, make sure to setup a shareholder structure to align with your immigration requirements (which differs based on which entrepreneurship program you’re applying for) if you’re planning to immigrate by setting up a business. You can incorporate a business by visiting or contacting a local registry office, using a third-party service that offers incorporation services (such as law firms), or via government website.
Step 3: Business Bank Account Creation.
You can bring the incorporation documents (certificate of incorporation, articles of incorporation, registration statement) to the bank you prefer to use to create a company bank account. You can create both debit and credit cards for your company. Inject financial capital investment that’s required to start the company into the account. You’ll be mainly using this account for all of your business-related transactions.
Step 4: Business Location Selection.
Make sure to conduct a thorough research to identify the location where you’ll be setting up your business at. Numerous entrepreneurs have failed in their businesses due to mis-selection of their business location. Acquire necessary information such as nearby neighborhood, your target market’s characteristics and where they are populated, daily traffic, proximity to other businesses and competitors, transportation, noise and other important factors that you need to consider.
Step 5: Lease Agreement.
After the ideal business location is chosen, find and sign a lease agreement with the landlord. Ensure to check the landlord’s reputation and history as well if available. In addition, read the agreement thoroughly before signing as all offers for each lease agreement differs. Check if there are personal guarantees, how long you are bound by the lease agreement, the exit plan at a worst-case scenario where you have to close the business urgently, an option to renew the lease, a lease rental rate change and more.
Step 6: Business License & Other Required Permits and Licenses.
Acquire business license and all other legally required city permits and licenses based on the type of business you are going to run. For instance, a consulting-type of business may not require a business license and Workers Compensation Board (WCB) coverage.
Step 7: Construction & Renovation.
Contact multiple contractors for the construction or renovation of your business to get quotations. Each contractor will highly likely offer different amount with distinctive project budget and schedules. Ensure to articulate what you want to be done (scope) by when (schedule) and by how much (budget). Moreover, keep a note that you may spend more than what you budgeted for depending on various factors such as unexpected delays (ex: city permit delay), material cost increase or project scope changes. Therefore, have a buffer amount of the project budget, so that you can agile in those situations.
Step 8: Operations Manual Generation.
Create an operation’s manual while waiting for the renovation/construction to complete. This manual lists what type of employees are needed (job positions, duties and responsibilities), required inventories, steps to operate a business, contingency plan on what actions to take in unforeseen risky situations (natural disasters or daily issues such as equipment breakdown), contact information of key partners (utility companies, POS system, internet, phone, cables, inventory suppliers, equipment maintenance, plumbers, etc.) and more. Having this manual will not only make your job easier and clarified, but it’ll benefit your future employees and a new business owner that may buyout your business. In fact, you may be able to franchise your business by systemizing your business in this way.
Step 9: Contact Required Third Party Businesses.
Contact utility (water, heat, electricity), business phone, cable, internet, POS (point-of-sale) system, goods delivery (ex: Gordon Foods Services) and other required 3rd parties to complete the business setup.
Step 10: Purchase Equipment & Supplies.
Purchase required equipment such as office supplies and inventories required to produce and sell the products and services.
Step 11: Finalize Business Exterior & Interior Design.
Finalize the setup of your business by putting up on a business signage, menu boards, open and close signs, warning signs (watch out for snow, etc.) and other necessary components in place.
Step 12: Final Review/Check.
Conduct a final check/review of the business to ensure everything is working and in order.
Step 13: Hire Employees.
Post your job position on recruitment websites. Review the resumes you receive and contact the applicants to setup an interview. Create interview questions to identify the right team to help you run your business. Conduct an interview of the applicants and offer them an employment based on your need. Provide them with a job offer letter that clearly articulates their main job duties and responsibilities.
Step 14: Promote Business.
Start promoting your business by using the right marketing channels. This can be word of mouth, using offline advertisements (TV commercials, billboards, etc.), sending mails to nearby neighborhoods, social media marketing, hiring influencers and more.
Step 15: Connect with the Right Team.
Find and connect with right team that can help you with your business; accountants for year-end reports, lawyers that can educate you the legal due diligences (business health requirements, employee standards, etc.), marketing specialists (if needed) and more.
BUYING OUT AN EXISTING BUSINESS
Taking over an existing business and rebranding it to your business can be an excellent idea as you may be able to save large amount of money. For instance, purchasing an established bakery shop may be ideal for the candidate that’s introduced above because 1) she can save time from construction requirement and acquiring other necessary permits, 2) she can save money by taking over equipment to bake breads cheaper than buying new, 3) she may tap into existing clientele, thus saving extra money for marketing.
Purchasing an existing business basically goes through the same procedure above, except you can save time and money from setting up the business such as location identification, renovation completion and more. As a result, all processes are usually identical from step 1 to 6 and from 9 to 15 and skip step 7 and 8. The existing business normally have an operation’s manual that you can take-over and modify according to your needs.
Starting a new venture in Canada can be both very exciting and anxious, especially if you are immigrating from another country. Everything is foreign to you. Nevertheless, having a right team with a right knowledge, skills and characters can help you realize your dream of setting up and running your own business in Canada.
If you want to learn deeper about starting your own business and/or wants to immigrate through any of the qualifying entrepreneurship program, then please don’t hesitate to contact us anytime by using our contact us page or sending us a free assessment.