An Exhaustive Overview for New Entrepreneurs Seeking to Launch a Company in Ontario
Although starting a small business in Ontario may be something you've been considering for some time, it's easy to talk yourself out of doing so. You probably know all the standard justifications for why a business hasn't opened yet: the economy could be better, a suitable location hasn't presented
Although starting a small business in Ontario may be something you've been considering for some time, it's easy to talk yourself out of doing so. You probably know all the standard justifications for why a business hasn't opened yet: the economy could be better, a suitable location hasn't presented itself, or you're not confident in the quality of your proposed company name.
It is almost always a huge undertaking to launch a new company. There comes a time, though, when you must push past your apprehensions and begin; otherwise, you'll never know if you'll be successful.
Despite the fact that many Canadian startups fail within their first few years in business, The number of prosperous businesses is higher than you may think, as demonstrated by these studies.
- There is a three-year survival rate of 77% for Canadian startups with one to four employees.
- Among startups with 20-99 employees, 86% make it through the first three years.
- Approximately 63% of startups make it to their fifth year.
- Only 43% of new businesses are still operating after 10 years.
Even though many successful startups aren't as well-prepared as you might expect before they open their doors and hang out their OPEN sign, the odds are still pretty good.
If you plan ahead and make as many preparations as you can, you'll increase your chances of success in the short term and in the long run.
As a starting point for your investigation, we have prepared this comprehensive guide to launching a small business in Ontario. Numerous topics will be covered that will help you improve the odds that your business will be around in three, five, or ten years.
Now then, let's get this party started
To Improve Your Small Business, Brainstorm Ideas
Researchers found that there were a total of 1 Across Canada, there were 14 million independently owned businesses. More than 407,000 of those establishments were located in Ontario at the time.
That's a lot of companies, but it doesn't mean the market is saturated with tired concepts. If you have a great idea for a product or service that isn't being offered by any other companies or if you have a way to improve upon an existing business model, there are many markets for you to enter.
What Sort of Company Should You Launch?
Businesses of any size typically focus on one of two activities: service provision or product sales. Although most startups would be better off focusing on one or the other, there are some exceptions; if yours is one of them, you can always expand into the other field once you've established your company's viability in the first.
- A service business is one that offers a specific set of skills to another individual or company that has a need for those skills. Service-based businesses are typically less complex than product-based ones because they don't need to stock any inventory. A service business can be launched with relatively little initial investment.
- To put it simply, a product-based business involves the sale of either goods that the owner has sourced from elsewhere and resells at a profit or goods that the owner has created themselves. When selling goods, you must plan for their storage and delivery to customers. This includes deciding whether or not to have a physical storefront and how goods will be shipped to buyers.
To zero in on the top ideas for your chosen line of work, you'll first need to determine what kind of business is the best fit for your particular set of skills and level of interest.
When you're trying to think of a good idea for a small business, it can be helpful to talk it over with other entrepreneurs who have been there and done that.
Through the BBB, you might be able to find other local businesses that are in the early stages of development and might be willing to provide advice as you try to formulate a business plan.
To network with other Canadian small businesses, you can also use social media sites like LinkedIn, Facebook, and others.
What Should I Do First?
When brainstorming, you should give some thought to the specifics of how you want to launch your company.
- Going the full start-up route entails developing your services or products from the ground up and acquiring customers from scratch.
- Purchasing an established company allows you to skip the initial setup phase and jump right into adding your own stamp on things. It will be more expensive, but you can get there faster than if you started from scratch.
- Buying a franchise is a great option because it combines the two strategies we've been talking about. Franchises allow entrepreneurs to capitalize on a proven business model by adopting an established company's name, logo, and other identifying features while also reaping the rewards of the parent company's advertising and promotion initiatives. The parent company will provide you with guidelines to follow, but you are also responsible for adhering to applicable laws and regulations.
Offline vs Cyberspace-Based Commercial Activity
Can you tell me a little bit about the kind of business you're thinking of establishing? Do you want a business that you can run entirely online, from the comfort of your own home, or do you want a storefront where customers can visit you in person? It's possible that some companies will need both an online and offline presence.
Establishing a Web Footprint
Whether you intend to establish a traditional storefront location, operate solely in the digital realm, or do a bit of both, you should think about creating a website.
New customers are not likely to visit your store or buy from you online unless they have first done some online research about you.
The first step is to create a website that looks professional. The site's design and layout should reflect well on your company, and it should provide visitors with basic information about your operation, a clear description of your services, and a means to contact you.
If you plan on conducting business through the Internet, the website you create will serve as your storefront. In this way, instead of visiting a physical storefront, potential customers can simply go to your website to acquire your services or purchase your goods.
Establishing a Social Media Fan Base
Building a social media following is critical for the success of any business, online or off. Mobile users who are interested in your products or services should be able to find relevant social media content about it easily.
Promoting a sale or giveaway on social media is a great way to reach a wider audience and bring in new business. Regular customers can be retained through social media marketing.
Social media is a great way to keep customers engaged and informed about your business. Displaying photos and videos can make a potential client feel like they are a vital part of your company. Building trust with your customers through emotional connections can increase sales and customer loyalty.
Some customers will also want to comment and ask questions about your business's performance on social media, so this is a great way to keep them interested and involved.
If a customer has a bad experience with your business, they are more likely to share their dissatisfaction with others through social media. Use this opportunity to demonstrate your problem-solving abilities, learn about any issues in the way your business operates, and make amends with any affected customers. then your social media followers can see how you handled the situation from your company's point of view
Aid for Programming Online
Spending money on having someone else manage your social media accounts or create and maintain your website is a wise move. While some entrepreneurs may have the resources to handle this on their own, others may not be able to.
The significance of a solid and professional-looking online presence for a small business cannot be overstated. Without a reliable online reputation, customers will automatically discount your company, and you'll have no idea why.
In order to keep customers interested in your business and give them a reason to stick around, it can be very helpful to hire someone to handle the updates to your social media and website.
Things to Think About If You Have a Traditional Storefront
For a traditional storefront establishment, you'll need to take the following additional steps:
- Get a spot, whether you buy it or lease it.
- Create fresh accounts for community services
- Design for the outside and inside
- Investing in any Essential Tools
- Getting all the local authorizations you need to operate
- Get some fresh bodies on board.
- Promote your shop and bring in customers.
- Facilitating the orderly storage of materials and goods
- Investing in Personal Injury Protection
Important Factors to Think About for Your Virtual Storefront
There are a few things that must be done to ensure the success of an online business.
- Create an online store.
- Creating persuasive sales copy
- Come up with strategies to increase website visits.
- Find out how to respond to client inquiries and demands.
- Making a decision about whether or not to conduct business operations from your home or to seek alternative rental arrangements
- Make a call on how much stock you think you'll need to keep on hand.
- Plan the most efficient method of transporting your goods.
- Considering how to monitor customer involvement in the absence of direct contact.
If you live in Ontario and want to launch an online business, the e-Business Toolkit created by the provincial government is a great place to start.
Learn to Meet Government Standards
Most likely, you will need to register your business with either the federal or Ontario government before you can open for business. Using the Small Business Startup Platform and receiving detailed, step-by-step instructions could be the best option if you're unsure of how to go about starting a small business in Ontario.
If you're having trouble deciphering the government's jargon when it comes to business registration and related topics, the ServiceOntario Business Information Guide is a great place to start.
Organizational Structure and Official Business Name
Your company's name can be registered through ServiceOntario. The site also lets you check if the name you want to use for your company is in use.
If you are operating as a sole proprietor or using your own name as the business name, you are exempt from the requirement to register your business name.
Declaration of Taxability
As soon as your company begins operations, you must apply for a Business Number (BN) from the Canada Revenue Agency. For tax reporting and payment purposes, your company will need a BN.
The CRA accepts BN applications via phone, mail, internet, and fax.
In addition to registering for a BN with the CRA, you may need to register for the following tax-related programs:
- Income tax withholdings
- Scheduled Exportation and Importation
- Tax on Corporations
Startups can use the free government tool BizPaL to research the various permits and licenses they may need to operate legally.
BizPaL allows you to look up any permits or licenses that may be necessary, both federally and in individual provinces. Under the Ontario section of BizPaL, you can conduct searches based on your specific industry or geographic location.
Additional Public Records
When launching a company in Ontario, it is imperative that you familiarize yourself with all applicable provincial regulations. Information about both existing and proposed regulations in Ontario can be found in a single place: a searchable registry maintained by the provincial government.
Standard Initial Investments
Before beginning your search for small business financing, it is crucial that you have a good idea of how much money will be needed to get your business off the ground.
If you have a rough idea of how much money you'll need to launch your business, you can more accurately predict how much money you'll need to make a profit or break even. When you add up all of the expenses associated with starting and running your business, you may come to the conclusion that it isn't worthwhile to pursue.
When establishing a small business in Ontario, you might come up against the following costs:
- Getting a place to set up shop
- Building or renovating the area as needed
- Room for storing inventory
- Investing in Tools Necessary for Success
- Having reliable access to the Internet, telephone service, and other essential services
- Acquires Authorizations
- Articles of law
- Providing Services in Accounting
- It is expensive to market your business online.
- Salaries and other compensation for staff
- Instruction for a Brand-New Workforce
An individual who intends to sell proofreading services as a freelancer can get started with minimal overhead by offering their services from the comfort of their own home with little more than a computer and a reliable internet connection.
For an entrepreneur opening a restaurant, the initial investment may be substantial due to the need for expensive kitchen and serving equipment, supplies, and marketing efforts, as well as the hiring of a small staff.
One's starting capital determines the nature of the business that can be launched.
Gaining Financial Support
Various options exist for financing your company.
Many of these small businesses will use a combination of funding strategies to secure the capital they require. Consequently, the following types of funding are typically utilized:
- Private Contributions, 84% 3%
- Bank loans or credit, 44 9%
- Trade credit with suppliers, 19 1%
- Close associates, 17 3%
- Profit from 13 3%
- Leasing of Capital Equipment, 10 7%
- Government aid in the form of subsidies and grants, 4 9%
- Initial capital raise from a venture capital firm or an angel investor, 1 8%
Crowdfunding, credit cards, banking lines of credit, and government-secured loans are a few of the other financing choices available to Ontario business owners.
For a lower interest rate on a bank loan, it helps to have collateral in the form of either business or personal property.
Although government funding is relatively meager, the Ontario government and the federal government of Canada make a substantial amount of money available.
You can find a variety of funding options, including grants and loans from the Ontario government, in our funding database as you prepare to launch your small business.
Instructions for Creating a Business Plan
As you consider the various business opportunities available to you, it's a good idea to keep track of your thoughts on paper, including your target market, the costs involved in getting started, your strategies for expansion, and your anticipated profits.
After settling on a concept, you can put together a thorough business plan outlining every aspect of the venture. You can get a lot of help, too, if you use the Business Plan Builder Tool to write a comprehensive business plan.
Considerations Regarding a Business Strategy
Nearly every owner of a small company should take the time to draft a business plan. Your business plan should answer questions about getting started, running the business, and expanding the company.
You'll need a business plan if you intend to seek funding from multiple institutions. Your business plan will be required reading for anyone considering investing in or lending money to your company.
Investors will not back your company's growth if you present them with a half-baked business plan. If your business plan is sloppy, potential investors may worry that you will manage your company carelessly.
Discussing Your Goals
Having a well-thought-out business plan will make it easier for potential investors to understand your company's goals. After all, you should know better than anyone else how your business is going to function. Ultimately, you are the only one who can see why you should be trusted to lead the company.
However, potential investors won't share your vision of the company's success. A well-written business plan gives potential investors a chance to learn about, and hopefully invest in, your vision for the company, which can increase the likelihood that they will do so.
Create a Business Strategy Document.
Make use of the following checklist as a guide for writing your business plan; be sure to cover all of the topics listed, and to provide a brief overview of the plan's key components within the first few pages before delving into greater depth elsewhere.
- Create a plan outlining the goals you have for your company.
- Give your reasons for thinking this business is a good one.
- Explain why you should be trusted with launching and leading the company.
- Please detail your short-term and long-term business objectives.
- Do not forget to document your business structure.
- Specify the products and services that you intend to offer.
- Your business plan should detail your company's main competitors and the market's future prospects.
- Explain what sets your company apart and how you plan to compete in the market.
- Think of some sales and marketing strategies you could implement to attract and retain clients, and list them here.
- Create a list of everything you'll need to run your company, including computers, office supplies, human resources personnel, and more.
- Your anticipated areas of need for outside assistance and advice
- Expenditures expected in the first few years
- Amount of money expected in the first few years
- Forecasting growth over the next five to ten years
- How much money you'll need in the first year and beyond that
- The method and timetable for debt repayment
- An inventory of all business licenses, permits, and other legal documents you currently possess or anticipate acquiring
Our business plan builder includes detailed instructions to help you write a winning business plan.
Helpful Resources for Entrepreneurs
If you're nervous about starting your own business because you don't know how to go about doing so, it might help to talk to other people who have done it. You can learn a lot from the advice and candid criticism of those more experienced in business than you are.
There are other places to look for start-up business advice besides networking with other, more seasoned small business owners.
Tools for Ontario Entrepreneurs
If you're looking for business guidance in Ontario, the Small Business Enterprise Centre (SBEC) is a great resource with locations across the province. One-on-one assistance with a wide range of topics relevant to running a small business is available at these centers.
Whether you're just starting out and need help formulating a business strategy or you're ready to launch and need assistance polishing every last detail, the local SBEC is there to assist you.
If however, you are in need of hand-holding through the entire process of starting a small business in Ontario, building your business plan, finding funding, applying and more – with 24/7 access right from your home, Canada Startups has the Small Business Startup Platform which is one of the best options
Solutions for a Thriving Company
The Ontario Business Advisory Services will work with your company if it has at least 10 employees, is growing quickly, and expects to make at least $2 million in its first year.
ONE is a group of business owners in Ontario, Canada.
ONE offers consulting services to those in Ontario who want to launch or expand an existing business. You can pay to participate in an event or seminar that ONE is hosting if you'd like, but ONE offers many other services, such as those offering business advice, at no cost. Their materials are both available online and in hard copy.
A Business App for Canada
The Canada Business App provides a plethora of resources, including details on the federal government's programs tailored to your field of business.
Canada's Newest Venture Capital Firms
Through our website, you can also gain access to a wealth of resources that can assist you in developing your own small business. In exchange for your membership fee, we will provide you with access to our database of available funding for your business. If you need suggestions or feedback on your business plan, our team of experts is here to help. If you need help writing a business plan that will attract investors and other funding sources, you can get that, too. Our membership details are available for your perusal.
Issues to Think About When Paying Business Taxes
As the owner of a small business in Ontario, there are a few tax situations involving federal and provincial taxes that you will need to understand.
You may have to collect and remit additional taxes from your clients in addition to the ones you already pay.
Getting your Business Number is the first step, as we discussed earlier. After that, you'll need to know a few things about taxes, including:
- The Employer Health Tax (EHT) is a payroll tax that must be paid by businesses.
- If you're selling goods or providing services to customers in Ontario, you may be required to collect GST or HST from them.
- Profits from a small business must be reported as income by sole proprietors and other self-employed people when they file their individual tax returns. Generally speaking, a T2 return is what corporations will use to report their earnings.
- Depending on where your company is located, you may also be required to pay municipal taxes like property tax.
- Employers are responsible for withholding funds from their workers' paychecks to cover the cost of payroll taxes and other government programs like the Canada Pension Plan. The government expects to receive these payments on a quarterly basis.
Common Errors New Businesses Make
Numerous Canadian startups fail due to the same avoidable errors. Make sure you gain knowledge from their blunders. Some rookie errors that can cost you dearly as a new business owner are listed below.
Lack of preparation: a major time sink when launching a company. Learn as much as you can about starting a business, and adapt what you learn to your unique circumstances.
Avoid hastily putting together your business plan, as it needs to be professional and comprehensive. This paper is where you lay out your grand plans for the company. It will outline the steps you need to take to grow your company. Have patience and solicit input from others if you feel you need to.
Too little money: Take as much time as you need to determine how much money you'll need. If you grossly underestimate how much money you will need to start your business, it will fail.
When you first get a large sum of money for your business, it can be tempting to go all out and buy the best, most expensive equipment and furniture you can find. Establish and maintain a budget instead. Be prepared for unforeseen costs by setting aside a sum of money.
On the other hand, you shouldn't be afraid to spend your money wisely early on. Trying to preserve as much capital as possible may prevent your company from expanding. This is where a budget comes in to play in order to find that happy medium.
Refusing to accept assistance: Keep in mind that nobody can be excellent at everything necessary to run a small business successfully. If you feel you are lacking in some area, you can always bring in help from outside sources or hire staff.
Lack of market research: Knowing your product inside and out isn't enough to run a successful business; you also need to know your market, including its demographics and profit potential.
Taxes: The government will want a cut of your earnings. You can try to ignore them, but you'll only be postponing the inevitable. Find out what you need to pay and collect, and do it on time.
You have your business plan for the next five years all mapped out and written in stone, right? I mean, you can't expect it to work perfectly every single time, right? Ahead of any potential shifts in the market, you'll need to have a firm grasp on the appropriate moments for swift action.
Ignoring technology: If you're in business, you should be aware of how technological advancements can improve your operations. Always be aware of and adaptable to the latest innovations in your field's applicable technology.
Neglecting customers: For a small business, nothing is more important than keeping current ones happy. New customers are hard to come by, so you should do everything you can to keep the ones you have coming back. There will be a return on investment if you invest time in keeping customers interested in your marketing campaigns and communicating with them via social media.
Not taking the time to improve your knowledge and skills; there's no such thing as knowing too much at the outset.
Checklist for Starting a Small Business in Ontario
Look Into Your Thoughts
- Think about what you're good at and come up with a business plan around that.
- Conduct analysis to determine the viability of your concept.
- Think about the kind of company structure you want to have.
- Pick a name:
- Make a written plan for your company.
- Contact a Canada Startups advisor for personalized support.
Get on the Lookout for Financial Support
- Determine the amount of money you'll need.
- First, you should ascertain how much money you have in your own possession.
- Learn if you are eligible for any grants.
- Recruit outside capital from sources like friends and family.
- Consider applying for a loan or line of credit from a bank.
- Use the Funding Database to search through all available government grants.
Respect the Laws set forth by the State.
- Set up shop in accordance with the law.
- Get your company officially recognized by the Canadian government by registering it.
- To start a business in Canada, you need a Tax ID Number from Revenue Canada.
- Obtain all necessary authorizations.
- Figure out if you're going to need any assistance keeping your books and paying your taxes.
- Identify a specific launch date.
- Get as many workers on board as you require.
- Budget in plenty of time for team instruction.
- Start your advertising campaigns.
- Conduct a dry run to ensure a problem-free implementation.
Start Selling/Posting Your Website
- Check your stock levels regularly.
- Maintain an active presence in your social media accounts.
- Keep abreast of developments in your community and field.
- Gather with other business owners and network
- After conducting periodic analyses of your company's performance, you should seek out ways to enhance it.
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