Starting A Business
How To Start A Small Business
Starting a business is a big task, even if it is a small business. There are many steps you must take during the process, and you cannot afford to miss a single one.
Start With A Good Business Idea
- You may have had an idea for a while, but haven’t acted on it yet. Or perhaps you have recently been struck by inspiration. In either case, now is the time to act on your idea. Keep in mind, even if it as a small home based business, you’re in it for the long haul. You are about to invest, time, money and even possibly a current job, so make sure your idea is well researched and has a chance to get off the ground.
Yes, You Need A Business Plan
- One of the best ways to gauge your idea is by creating a business plan. This allows you to take a deep dive, and examine everything about the business, products or services and market for your small business. You will also need it to present to investors and lenders.
- Prior to launching your small business, you must have a thorough, complete business plan as your road map. You can begin by creating bullet points to get you started, and as you start filling them in, your plan will start to take shape.
Choose A Memorable Name For Your Business
- Begin by creating a memorable business name, with the understanding that is also comes with both legal and marketing considerations. For example, in Canada, the government places more name restrictions on corporations than on sole proprietorships, however every business owner must consider any possible legal issues while naming their business. Most businesses are required to register their name with the Canadian government.
Choose A Form of Business Ownership
- When you decide to start your small business, there are three basic forms of business ownership that you can choose from for a business structure. A sole proprietorship, the partnership, and the corporation. There are a few options within those, such as a cooperative corporation or the limited partnership, but they all fall under these three categories. Choosing which of these three structures is the right fit for your business will depend on several factors, including the liability to the tax deductions you want for your small business.
Secure Small Business Financing
- While some owners can finance their new small businesses out of their own pockets, many others need an infusion of funds from other sources to get off the ground. There are many options to consider, from debt financing to sharing equity to government grants. Understand the differences between each kind of financing and be sure you're prepared to deal with the obligations of whichever ones you choose.
Get a Business License
- Many new businesses will need to get business licenses before they can operate legally within their municipalities. If your city or town doesn't have a website, you can find contact information for government agencies online.
Register for the GST/HST
- If your new small business's gross income stays under $30,000 for four consecutive quarters, you are considered to be a small supplier, and are not require to register for GST and HST. However, you will have to register for the goods and services tax (GST) and harmonized sales tax (HST) if that threshold is exceeded. You will also need to register if you are a taxi and limousine services, as the small supplier rule does not apply.
- Even if you're not making much money to start, you may want to register for GST/HST immediately because of input Tax Credits, which are basically your way of getting back the GST/HST your business has paid out on purchases for business use.
Register for Provincial Sales Tax
- Some provinces are yet to harmonize their sales taxes with the federal GST. In those provinces, you will have to register to collect and remit the appropriate provincial tax. If you are starting a business in Alberta, British Columbia, Manitoba, or Saskatchewan, you will need to register as a collector of provincial sales tax (PST). In Quebec, you will need to register for Quebec Sales Tax (QST).
You And Your Employees
- When your small business expands and grows, you will find yourself hiring some extra help. Typically, this is great (if not sometimes bittersweet) news. It means that your business is on track, and people are supporting you. It also means that you must be prepared, and ensure your small business is legally covered and able to handle payroll deductions, worker’s compensation insurance, and employment insurance.
Always Have Additional Business Insurance
- Always make sure you have more insurance than the legally required employment insurance. Your business may need additional protection, and there are a variety of policies covering property, general liability, business interruption, key people, and disability. Be sure you discuss these options with an insurance agent and lawyer, so you can accurately determine the best coverage package for your business.
Keep Your Records Straight
- If you have good records, things such as accounting and paying taxes become much easier. You can begin by opening a separate business bank account and keeping and organizing your business receipts. You should also always have an accounting and tax service to take care of all of your needs. They are experts in their field, and allow you the freedom to keep your small business operational, while they manage your accounting and tax requirements.
If you currently own a small business, or are in the planning stages of starting one, contact our Blue Ocean team, and we will discuss your current plans as well as your ambitions for the future. It is never too early to get your financial house in order, so feel free to get in touch.