Did you know that around 48.3% of the Canadian workforce actually work for small and medium-sized businesses?
That’s almost half of the country’s workforce. Needless to say, learning how to start a new business in Toronto has been elevated to an art form. It’s a rather exciting process. But, as with starting a new business anywhere, it comes with its obstacles and challenges.
Suppose you’ve been thinking about setting up a successful business in Toronto. Well, you’ve come to the right place. Keep on reading for our full breakdown of all the key nine steps you’ll want to follow to build a stable and successful business.
- 1 1. How to Start a New Business: A Solid Business Idea
- 2 2. Create a Business Plan
- 3 3. Pick the Right Name for Your Business
- 4 4. Selecting the Right Form of Business Ownership
- 5 5. Applying For Small Business Financing
- 6 6. Get Your Business License
- 7 7. Sign up for the GST and HST
- 8 8. Recruiting Your Employees
- 9 9. Outline Your Marketing Strategy
- 10 How to Launch a Business: The Toronto Edition
1. How to Start a New Business: A Solid Business Idea
Before we delve into the nuances of setting up a killer business, let’s make sure you have a solid grasp of the sheer importance of picking the right business idea.
42% of startups in Canada flopped because the market didn’t have sufficient demand (or need) for their services or products. So, you’ll want to spend some time picking the right business idea that has enough market demand.
2. Create a Business Plan
Once you have a solid idea percolating, it’s time to get it down on paper.
This is a critical step that allows you to take your business idea from the realm of daydreams into reality. This will let you deeply examine your industry, market trends, your targeted audience and start putting concrete parameters for your service or product.
Moreover, once you’ve finalized your business plan, you can present it to potential lenders and investors. It’s the perfect setup for pre-testing the viability of your product with your stakeholders.
3. Pick the Right Name for Your Business
Don’t underestimate the power of a good business name.
Not only is it a solid consideration when it comes to your marketing strategy, but it’s also a legal issue in Canada. You’ll find that the Canadian government has some laws and regulations when it comes to naming your business.
After all, you’ll most likely need to register your name with the Canadian government, so start researching and brainstorming for the right business name as soon as possible.
4. Selecting the Right Form of Business Ownership
There are only three ways to set up a business in Canada: sole proprietorship, a partnership, or a corporation.
Sure, there will be some subcategories, like a cooperative corporation or a limited partnership. But, they still follow the same regulations of the main three types.
You’ll want to pick the proper form of business ownership, as this will determine your liability level, your tax deductions, and so much more.
5. Applying For Small Business Financing
At this point, you’re ready to begin your research into financing your small business. Of course, there’s always the option of funding your own small business on your own, with the help of family, friends, and your bank account.
Yet, you’ll want to keep in mind that business growth will only happen with the critical help of cash influxes and having enough liquidity on hand. That’s why it’s always a good idea to check out your debt financing options, government grants, and even sharing equity.
Just make sure to do your research and ensure that you fully understand the obligations that come attached with those funds before you sign on the dotted line.
6. Get Your Business License
You’ll want to confirm whether you need to get your business license if you’re going to operate your specific kind of business in Toronto.
It might not be necessary for all Toronto businesses to get a license to operate in their municipalities legally. But you might want to make sure that you have all the permits and licenses you need before recording your first business transaction.
7. Sign up for the GST and HST
Generally speaking, this is a later step down the line, specifically after your business generates more than $30,000 in gross income.
But, the moment your business reaches this threshold, you’ll need to register for both the goods and services tax (GST) and harmonized sales tax (HST). Yet, you’ll want to double-check whether your business needs to register for both GST and HST without meeting the threshold.
For instance, businesses, like limousines and taxi services, are legally required to sign up for the GST or HST, regardless of their gross income.
Furthermore, even if you’re not legally required to register for the GST or HST, you might want to do so anyway. You can only take advantage of the Input Tax Credits. Those credits will pay you back for the GST and HST amounts you’ll be paying, specifically for all of your “business use” purchases.
8. Recruiting Your Employees
More likely than not, you won’t be giving much thought to hiring employees in the chaos of starting your business.
However, you’d be surprised at how quickly time can pass, and you’re faced with the dire need for additional personnel. Of course, there are some essential tasks that you might already be outsourcing, like IT services.
But, we’re talking about the regulations you have to follow to hire employees in Toronto. These will include worker’s compensation insurance, handling payroll deductions, and employment insurance.
9. Outline Your Marketing Strategy
You can be offering the best services or products in the market. However, without proper marketing, your business will still fail.
After all, how can a business strategy grow without customers and cultivating brand awareness?
In short, you’ll want to spend some time setting up the right business strategies to promote your business successfully. Start small with quarter-based goals, so you can support the working systems and scrap the ones that aren’t performing well.
How to Launch a Business: The Toronto Edition
We know how exciting and overwhelming it can be to take your first concrete steps in launching a business in Toronto.
Hopefully, our explainer has shed some light on the intricacies of how to start a new business in Ontario. When in doubt, start small, and don’t forget that you can always reach out to your business community for advice.
Speaking of advice, check out our other tips and tricks, all available to you in our business section.