A major factor promoting innovation, productivity, the creation of jobs, and economic expansion is entrepreneurship. Economically, nations with strong levels of entrepreneurship typically fare better.
Throughout Canada’s history, entrepreneurs have had a significant impact, and an increasing number of permanent residents and Canadians from all walks of life are starting their businesses or considering doing so. In a time when people are skeptical of many public figures, Canadian business owners are praised in both their local communities and the media, and they are emerging as our new role models.
Starting a business is a challenging, overwhelming task, mainly if you immigrate to Canada to begin a new entrepreneurship journey. There are lots of things to consider and meet compliance and legal requirements.
Step 1: Start with market research
Before taking any action, do comprehensive market research and not move forward with your plan because you have prior subjective knowledge about the industry.
If you are new to the country, you must identify the market climate of the province. Immigrants, in general, face a grave challenge because they do not understand correctly the geographical zone in Canada.
Each geographical zone has a business model, so you must understand the new environment, assess the resources, and adapt to it.
- Understand the geographical zone and business model.
- Adapt to the new environment, uniqueness and cultural differences.
- See whether you have enough resources and conditioning to start a new business in that geographical zone.
- Evaluate your skills and resources and assess market conditioning.
- Assess your funds both for starting your business and marketing expenses.
Your market research also comprises regulations and requirements for forming a business. For example, Canadian provinces also regulate the formation of corporate entities.
The formation of partnerships and non-corporate businesses is specific to provinces. Although registration mechanisms are pretty straightforward in Canada, you need to understand specific registry forms, the scope of undertakings, business structure and other details.
What restrictions apply to foreign business entities and foreign investment?
Foreign investors seeking to establish a business in Canada are required to notify innovation, science and economic development of Canada no later than 30 days following the establishment of their businesses.
Step 2: Create a Business Plan
A viable business plan is indispensable for the initial success of your business. A good business plan is significant for your work permit application, so you must create a specific, well-researched and viable business plan in line with market conditions. Your business plan must describe your business model, value proposition, risks and challenges, future projections, short and long-term strategies, key partners, financial goals, marketing strategies, P&L analysis and monetization strategy.
Step 3: Buying or Starting a Business
Before purchasing or starting a business, you need to select a business structure for your organization. In Canada, there are primarily three types of business structures such as sole proprietorship, partnership and corporation.
After evaluating your resources, budget, financial projections and other components, you can decide how to enter the new business.
- To buy an existing business?
- To start a new establishment?
- To buy a franchise of an established business?
When starting your business, you must also consider the culture of that geographical zone. In many provinces in Canada, it is wise to buy a franchise unless you have a unique idea. So, you need to research the locality, culture, people and society at large.
Consider the company’s future in light of the development of new technology. For instance, a taxi permit used to be worth between $300,000 and $500,000. But as technology advanced and businesses like Uber were established, the value of a taxi permit fell sharply and is now essentially worthless.
If you want to buy an existing business, check to see whether that company has any debt. And how much debt it has, if any. In particular, think about the government debt. In debt like this, there is no forbearance.
Step 4: Choosing, registering and protecting your company’s name
Choosing a Business Name
When selecting a business name, keep the following in mind:
- If you operate as a sole proprietor using your legal name (e.g., “Jane Doe”), you generally don’t need to register a separate business name.
- For other scenarios, you’ll need to choose either your legal corporate name or a trade name (also known as a “doing business as” or DBA name).
- Consider selecting a unique and memorable name that reflects your business’s identity.
Before registering, ensure that your chosen name is available:
- A Nuans search can assist in comparing your suggested name with a database of names that include federal and provincial corporate names, trademarks that have been applied for and registered, as well as the majority of provincially registered business names (apart from corporate and business names in Québec).
- Verify that your name isn’t already in use by another business.
Registering Your Business Name
Most businesses need to register their business name with the government. Here’s how:
- Corporation: If you’re forming a corporation, you can choose between a federal or provincial/territorial corporation. Register your corporate name with the relevant authority.
- Sole Proprietorship or Partnership: Fill out the appropriate business registration form based on your business type. You’ll need to provide details like your business address and the chosen name.
- Cooperative: If you’re setting up a cooperative, follow the registration process specific to cooperatives.
- While registering your business name, check if it’s identical to or similar to any unregistered or registered trademarks. Conduct trademark searches to avoid conflicts.
- Remember that a corporation can operate under a name other than its assigned number or registered corporate name, but it’s usually required to register that business name separately.
Business Licenses and Permits
Ensure you have all the necessary licences and permits before purchasing a business. Does a restaurant, for instance, have all the licences required for its kind of operation? Are the related documents flawed in any manner at all?
The necessary permits may be in place but have been withdrawn for whatever reason. Verify the duration of permissions and the process for extending them.
Step 5: Getting Finances for the Business
There are multiple avenues by which you can finance your business. In your business plan, you must define the clear methods of financing your business.
1. Using Your Capital or Selling Assets
- Description: Utilize your own capital (savings) or sell assets (such as property or shares) to invest in your business.
- Advantages: You retain full ownership and control.
- Considerations: Assess the impact on your personal finances and liquidity.
2. Angel Investors and Bank Financing
- Angel Investors:
- Description: Angel investors provide capital in exchange for equity or convertible debt.
- Process: Present a detailed business plan to convince angel investors of your venture’s potential.
- Description: Banks offer business loans based on your creditworthiness and business plan.
- Process: Apply for a business loan or mortgage your property or other assets and receive a loan.
- Description: Crowdfunding involves raising funds from many people via online platforms. Finding an angel investor or venture capitalist is challenging, but you can attend seminars, business meetings, etc. and find people interested in financing a new venture.
- Equity Crowdfunding: Offer shares in your company to backers.
- Rewards-Based Crowdfunding: Provide rewards (products, services) to backers.
- Donation-Based Crowdfunding: Seek donations without offering equity or rewards.
- Key: Effective presentation is crucial to attract investors.
4. Government and Organizational Grants
- Government Grants:
- Purpose: Fostering entrepreneurship and job creation.
- Eligibility: Varies by province and industry.
- Application: Research grants specific to your business type and apply.
- Organizational Grants:
- Description: Certain organizations provide seed funding (typically $5,000 to $10,000) to start-ups.
- Criteria: Some focus on specific industries (e.g., manufacturing), while others support women entrepreneurs.
- Presentation: Tailor your proposal to each organization’s requirements.
5. Seeking Grants
- Description: Explore grants offered by various institutions and government bodies.
- Purpose: Grants aim to foster entrepreneurship and create job opportunities.
- Eligibility Criteria:
- Varies by province, industry, and organization.
- Some grants specifically support women entrepreneurs.
- Application Process:
- Research grants relevant to your business type and location.
- Tailor your proposal to meet each grant’s requirements.
The nation’s turnover rate grows with increased employment, which raises tax-based revenue for the government. The aids will, therefore, be paid for.
Step 6: Choosing a Location for Your Business
- When purchasing a property, consider its impact on your company’s future.
- Some properties, like clinics, gain value based on their geographic position, allowing you to sell them at a higher price.
- If you’re renting, be aware that you must vacate the property when the lease expires.
- Evaluate all aspects before venturing into any business.
- In Canada, rental agreements typically span five to ten years.
- Renowned companies often sign 25-year contracts when planning long-term investments.
Step 7: Gathering a Team and Hiring Employees (Two Approaches)
There are two ways to work with individuals:
- Abide by all employee regulations.
- Sign contracts with employees.
- Ensure proper tax payments to avoid legal consequences.
Working with Contractors
- Simpler process without employee-related issues.
- Determine which areas can be outsourced and which require hiring staff.
If you do not abide by all employee regulations, sign a contract with them and pay taxes to the government. Otherwise, your employees may sue you, and you may face legal consequences.
Working with contractors is more superficial and will not present any issues. Determine which areas you can outsource the affairs of and which ones require hiring staff in the primary research.
- Be aware of employees’ benefits, laws regarding income and payroll of an employee.
- Take consideration of circumstantial issues related to hiring an employee.