Getting your business off the ground requires quite a few steps, and the list can be a bit daunting at first glance. Smarter Loans is the go-to resource for Canadians seeking any kind of loan or financing when starting up their new business. Smarter Loans has provided an extensive guide on the steps needed to get your business started, in the right way.
Decide What You Want to Do
You might know that you want to start a business, but do you know what you want to do, and why? Without having a solid foundation of the what and why, you’ll continually get stuck as you move further down the process.
Once you’ve decided on an idea for your business, taking the time to gather market research will help determine the potential for your venture.
Some questions to ask:
- Who is your target market?
- What problem can you solve for that market?
- How saturated is the market with the product or service?
- What is your competition doing, and can you improve it?
Market research also entails getting feedback. If it’s possible to create the product or offer a test of the service before you officially roll out your business, you’ll have the opportunity to make tweaks based on real-life feedback. You can even get feedback on a concept or idea, if having the product or service available is not feasible. Make sure to ask specific questions such as:
- How do you think this product or service could be better?
- What could be different about it?
- Do you think this solves a common problem?
- Would you buy this for yourself or someone you know?
Register Your Business
Starting a business means following all the legal requirements necessary, and one of those is registering your business. Registering your business helps protect you if someone tries to take legal action against your business. If a business is registered properly, you won’t be held personally liable.
To register a business with the government, be prepared with the following information:
- Business name
- Which provinces and territories you’re going to conduct business in
- Where the primary office will be located
- What type of business you are registering: sole proprietorship, partnership, corporation, or co-operative
Registering as a Corporation
To register your business as a corporation, make sure to do the following:
- Incorporate your business federally or provincially/territorially.
- Obtain a federal business number and Corporation income tax account from the Canada Revenue Agency.
- If you plan to do business in any other provinces/territories other than the one your business is located, you’ll need to register as an extra-provincial/territorial corporation in those jurisdictions.
- Apply for permits and licenses.
Registering as a Sole Proprietorship or Partnership
Here’s how to register as a sole proprietorship or partnership:
- Register your business with the provinces/territories where you are going to conduct business.
- Obtain a federal business number and tax accounts.
- Apply for permits and licenses.
Register Your Business Name
Once you’ve decided on the perfect business name, you need to register it. Registering the business name is a required step in many cases, but it also protects your company from someone else doing business under the same name.
If you are a sole proprietor doing business under your own legal name, you probably won’t need to register your business name. (But still check, just in case!) If you are going to incorporate your business, you will need to register that name within the jurisdiction in which your business is incorporated. You’ll also need to decide whether you will incorporate at the federal or provincial/territorial level.
Create a Business Plan
A formal business plan isn’t needed for all businesses, but it’s important to have some kind of plan. A business plan is like a road map — it helps keep you on course as you work to grow and make business changes. If you are considering applying for a loan or seeking any kind of financial support, a business plan can help you get approved for the money.
There are two types of business plans to explore:
- Traditional Business Plan: If you are looking for financial backing, you will most likely need a traditional business plan. This kind of plan is quite detailed and comprehensive. It lays it all out everything investors and lenders will want to see, as well as how you plan to accomplish your goals.
- Lean Start Up Business Plan: This plan focuses more on high-level strategy and only contains the most important information without going into all of the details.
Operation Command Center
You might not be setting up the command center for a large sting operation, but your work space is important — if your home base and the place you should be able to focus on the important work.
The location of your business can anything. Common spaces include:
- Home office
- Private office space
- Retail location
- Co-working space
No matter what kind of space you decide on, make sure your location can accommodate the type of work you’ll be doing and can fit all the equipment you need. And since you’ll be spending a lot of time in this space, make sure you’re comfortable there.
Once you’ve completed all the steps above, it’s time to open a bank account under your new business name. It’s incredibly important to keep business and personal funds separate, even from the very beginning. This helps legitimize the business and allows clients, customers, and investors know that this is a professional organization, not just a hobby.
Accounting is an important part of all businesses and not something worth cutting corners. Try to find a software solutions that works for small businesses (there are a ton) and can handle the bulk of the work for you.
Marketing & Sales
Getting prospects and customers is the only way to become profitable in your business, and to find the right people, you need to have a marketing strategy in place, both online and offline.
Consider focusing your efforts on email marketing, website creation, and even business cards and branded marketing materials. Everything your business does should be branded with your logo, colors, business name, website address and physical location, if you have one. Once you’re ready, you can begin to invest in paid advertising on Google, SEO, and other types of campaigns to help maintain your visibility.
As the sales start rolling in, you’ll need a way to accept payments and process transactions. If you want to be able to accept payments via credit cards, you’ll need a payment processor.
A payment processor is a third-party that acts as a mediator between the merchant and the customer’s bank. Payment processors allow small businesses to accept payment by credit card.
Payment processors are responsible for several functions that protect businesses, such as determining whether a transaction is valid and approved and implementing anti-fraud measures to ensure that a purchase transaction is initiated by the correct source.
Payment processors are not free unfortunately, and do have a cost associated with them, but the benefits outweigh the fees. Choosing the right payment processor for your needs will depend on a few things, but here are the top 10 payment processors in Canada:
- First Data
- Global Payments
- TD Merchant Services
Being a business owner will require constant eyes on your business and you’ll very quickly learn to be a great problem solver. And if you need additional assistance, check out Smarter Loans — they are a great resource for all your small business needs!