Starting & Running a Small Business in Canada " All-in-One"

Complete 7 in 1 Book About: Starting & Running
a Small Business for Canadian Guide

Accessing Canada Business services
You can get in touch with your provincial or territorial service centre in five ways: Website:
The Canada Business website (
contains information about business-related programs and services of federal and provincial agencies.
The site allows you to input your province, industry, and/or demographic group and receive information tailored to the location and nature of your business, and provides links to the individual websites maintained by some provinces.
The main site contains information on such topics as
• Starting a business
• Looking at growth and innovation in your business
• Getting financial assistance through grants, loans, and financing
• Managing federal and provincial taxes
• Complying with business regulations
• Obtaining licences and permits
• Exporting and importing
• Hiring and managing staff
• Creating a business plan
• Managing and operating a business
• Conducting market research and getting access to statistics
• Doing marketing and sales
• Exiting your business

Some of the provincial sites also provide information about and let you register for business workshops and seminars, as well as links to other useful websites.
Phone: Call the Canada Business toll-free Business Info Line at 1-888-576-4444 between 9:00 a.m. and 5:00 p.m. in every Canadian time zone.
(TTY service for the hearing-impaired is also available from 8:30 a.m. to 6:00 p.m., Eastern Time, by calling 1-800-457-8466.)

A business information officer will direct you to the best sources of information or refer you to programs and services relevant to your business situation.
Fax: Contact Canada Business by fax at 1-888-417-0442.

E-mail: Send questions to Canada Business by e-mail from the main website
under “Contact Us.” In person:
At the offices of your provincial/territorial service centre, you can use the resource materials on your own or with the help of a business information officer.

The provincial service centres also have arrangements with existing business service organizations in communities across Canada to provide
Canada Business information.

Contact your provincial/territorial service centre for the location nearest you. Provincial/territorial government websites Each provincial and territorial government maintains a website.

Some of the provincial sites contain good general business information that you can use to get started. Here are the websites:
British Columbia:
New Brunswick:
Northwest Territories:
Nova Scotia:
Nunavut: Ontario:
Prince Edward Island:

Bank and trust company websites
The major banks’ and trust companies’ websites have information about the products and services they provide to small businesses.

Some have information about general business topics, as well.
Small business or entrepreneurship centres
A number of small business or entrepreneurship centres provide support and training to start-up and small businesses,
for example: Centennial College Centre of Entrepreneurship:
This Toronto-based centre provides entrepreneurial training, business plan development, analysis of proposed acquisitions, as-needed business advice and consulting, and international business training.
It also offers a 30-day New Business Starter Program, designed to provide entrepreneurs with the basic principles and practices of business, along with the skills to market, operate, and control a business.
Visit www.centennial to find out more.
Centre for Entrepreneurship Education and Development Incorporated (CEED):
This Nova Scotia not-for-profit society is devoted to helping people discover and use entrepreneurship as a vehicle to become self-reliant. Its services include technical assistance, entrepreneurship consulting, and entrepreneurship courses.

CEED’s website ( has more information. Ontario Small Business Enterprise Centres:
These Ontario government centres are located throughout the province and provide entrepreneurs with support to start and grow their businesses.

They offer a wide variety of support resources, including consultations with qualified business consultants, workshops and seminars, and mentoring and networking opportunities.
for more information.
The Stu Clark Centre for Entrepreneurship:
The University of Manitoba’s Asper School of Business
( faculties/management) operates this centre.

It aims to encourage the development of new businesses and entrepreneurial thinking among Canadians. The centre supports a variety of programs aimed at youth, as well as undergraduate students and adults. Its Manitoba Venture Challenge
is a province-wide competition open to new and established businesses in Manitoba whose owners are seeking outside investment or need advice to start or grow their businesses.
Youth Employment Services (YES): Among other services,
this not-for-profit organization based in Montreal provides English language services to help entrepreneurs start and run businesses.
Services include business coaching, seminars on topics of interest to small business, a mentorship program, and more.
Youtube video:.For more Information

Business incubators A business incubator is a business-mentoring facility that nurtures small- and medium-sized businesses during the start-up period.

Business incubators provide management assistance, education, technical and business support services, and financial advice.
They may also provide flexible rental space and flexible leases.
For more information about Canadian business incubators, including a list of business incubators in Canada, contact the Canadian Association of Business Incubation

Getting Information Geared to
Your Specific Business After you find out about starting and carrying on a business in general, you can find out more about your field of business in particular.
For example, you might want to know these facts:
What skills you need for this business
What government regulations apply to this business
How much it will cost to run this kind of business What the demand is for the goods or services you’ll be supplying Who the likely customers are for the goods and services you’ll be providing What the competition is like for this type of business What supplies and equipment you require for this type of business You need a good gateway into the sector you’re interested in.

Here are our recommendations. Industry Canada Industry
Canada’s website ( is particularly useful at the preliminary stage of starting a business because, in addition to general business information, it contains information on a wide variety of businesses, organized by sector.

Each type of business has its own page, with additional pages on a number of subtopics.
The subtopics vary for each business category, but they cover areas such as the following: Company directories: With links to lists of Canadian companies carrying on business in the field Contacts: With links to major trade associations in the field Electronic business: With links to a variety of information about e-business and
e-commerce Events: With links to major trade shows in a particular business field Industry news: With links to Canada and U.S.

trade periodicals Regulations and standards: With links to relevant government regulations and standards organizations Statistics, analysis, and industry profiles: With links to North American Industry Classification definitions and to selected Canadian statistics on topics such as the Canadian market, imports, and exports Trade and exporting: With links to relevant international trade agreements and export information Trade and professional associations

Trade and professional associations are another great source of information about particular fields of business.
Thousands of associations exist in North America.

Whatever your field of business, a related association probably exists.
A good association will give you access to industry-specific information.
Most associations maintain a website, setting out the services the association provides and membership information. You’ll find many benefits to trade and professional associations: Trade and professional journals: Many trade and professional associations publish journals or newsletters with current information about the field.

They also contain ads for equipment and supplies that the business uses, and some list business opportunities (businesses for sale, partners wanted, premises for lease, equipment for sale, and so on).
You may be able to get information about trade and professional journals on the Industry Canada website by following the Industry News link offered for some industry sectors. Workshops and seminars:

Many trade and professional associations hold seminars and workshops on topics of specific interest to members. Some offer courses leading to a designation or certification in the field. Trade shows: Most trade associations hold an industry-wide trade show at least once a year. Trade shows are good places to make contacts in the industry and learn about the latest trends in the field.

Obtaining Essential Business Skills After you research your chosen business field, you may realize that you need some training before you can start your business.

You may need skills specific to your chosen business field (such as how to frame a picture if you’re going into the framing business, or how to mediate if you’re going into family counselling), or you may want to pick up some general business skills and knowledge such as simple bookkeeping, basic computer skills, or how to prepare a business plan. When people think of education, they usually think of universities, community colleges, career colleges, vocational schools, and boards of education. But in fact, many different places offer business education and skills training.

You may be able to pick up the skills you need from a trade association,
a Canada Business service centre, or the little place in your local mall that teaches keyboarding. In fact, you may want to avoid many of the educational institutions, because they often offer certificate or diploma programs more suited to people looking for a job, rather than individual courses focused on the specific skills an entrepreneur needs. Where you go to get your training will depend on the kind of skill you’re trying to acquire.

Skills for your particular business You may be able to pick up the special skills required for your particular business in a day, a weekend, or a week.

Or you may need a certificate or diploma in the field that will take months or years
to get. You may be able to find out not only what skills you need, but also where to get them, from Industry Canada or from the relevant trade or professional association.
Or you can use an online search engine (such as Google, Bing, or Yahoo!) and type in the name of the specific field you’re interested in plus the word “education”
or “training.” If you’re not required to have a degree, diploma, or certificate offered by a university or community college, consider programs offered by privately run career colleges or vocational schools.

These programs tend to be shorter than university and community college programs, but be warned — these courses are usually more expensive, sometimes much more expensive! The trade or professional association in your field may offer short workshops or seminars on individual topics of interest to you, as well as complete training programs specifically for your field. General business skills To acquire in-depth business skills, you can enroll in degree, diploma, or certificate programs offered by colleges and universities.

These programs run over the course of a year, or from two to three years.
You probably won’t be able to take one course of interest to you without taking another course as a prerequisite or without signing on for the entire program. If you want to acquire some business skills as quickly as possible, look for continuing education courses offered by your local university.

For example, the University of Toronto School of Continuing Studies
( offers courses
(usually with classes held once a week for about three months)
in a wide variety of business-related areas, including Accounting Fundamentals, Business Law and Insurance, Business Management, Business Strategy,
Social Media Starter, Taxation for Canadian Business, and Understanding and Resolving Conflict. University of Calgary Continuing Education
( has seminars on numerous topics, including Time Management, Accounting for Non-Financial Managers, Building Great Customer Relationships, Writing Skills for Business, and Creative Negotiating.

Your local board of education may offer courses in business skills as part of its continuing education programs, and you should have no problem enrolling in individual courses rather than in programs.
Classes will probably be scheduled once a week over several months.
You may also be able to find weekend workshops or evening seminars offered by your trade or professional association, or through your provincial Canada Business service centre. Finding Professional and Other Help Planning a business start-up takes a lot of work.

But you don’t have to do it all alone. You can and should get professional help with many of the tasks involved. In this section, we help you determine who you need on your team, and how to find the best candidates. Determining whom you need At the very least, you need a lawyer, an accountant, and an insurance agent or broker. We also offer suggestions for other professionals you might find useful. Lawyer Almost everything that happens in the business world has legal implications.
A lawyer can help you navigate through every stage of your business odyssey.

When you’re setting up your business, a lawyer can Help you decide whether or not to incorporate Help you form a corporation or partnership Review start-up documents such as loan agreements, leases, and franchise agreements Draft standard forms for contracts to use in your business When you’re in business, a lawyer can be of further assistance by Helping you negotiate contracts Giving you advice about hiring and firing employees Helping you collect your unpaid accounts Acting for you in a lawsuit if you sue or are sued Even if you decide to get out of the business, you’ll still need a lawyer to help you sell it, or give it to your children, or wind it up. Accountant In Canada, anyone can claim to be an accountant.

What you want is a professional accountant — a chartered accountant, certified general accountant, or certified management accountant. Professional accountants are licensed and regulated.

An accountant can help you Buy an existing business Set up a bookkeeping system Prepare budgets and cash-flow statements Prepare financial statements

Prepare your income tax returns
Deal with the Canada Revenue Agency (CRA) from time to time Insurance
agent or broker You’ll need insurance for your business, including
Property insurance to cover loss or damage to your business property Business interruption insurance to cover your loss of earnings if your business premises are damaged General liability insurance to cover claims made if you cause injury to a customer, supplier, or innocent bystander Key person insurance to tide over your business in case you,
a partner, or an important employee dies or becomes disabled An insurance agent
(a person who deals with and sells the policies of only one insurance company)
or insurance broker (a person who deals with and sells the policies of several insurance companies) can give you advice about what kind of insurance you need and how much. Both agents and brokers are regulated and licensed by provincial governments.

Other assistance Depending on the nature of your business, you may also want help from any of the following professionals (in no particular order):
Advertising firm and/or media relations firm:
To help you get the word out about your business Business coach:
To help you acquire presentation skills, get pointers on power dressing, pick up business etiquette, and even improve your table manners
(for those four-fork lunches with potential investors and customers)
Business evaluator:

To help you decide on the value of a business you are thinking of buying
Computer systems consultant:
To help you choose and set up your computer equipment and choose and install your software Graphic designer:
To help you design a business logo, your business cards, and letterhead Human resources specialist (also known as a headhunter):
To help you hire staff Interior designer:
To help you set up your business premises attractively Management consultant:
To help you polish your management skills Marketing consultant: To help you identify the market for your product or service and determine how best to reach that market Website designer:
To help you create a great website for you business Finding peer support
Even though you’re going it alone in the business universe, you may want to seek out the companionship of fellow travellers for sharing experiences and getting advice. Whatever demographic group you fall into, you’ll likely find a business
organization for you.

These organizations provide opportunities to network and get advice geared to your demographic. Here’s a sampling:

Canadian Association of Women Executives & Entrepreneurs: An organization that provides networking, support, mentoring, and professional development to businesswomen at all stages of their careers ( Canadian Council for Aboriginal Business: A national, non-profit organization that promotes the full participation of Aboriginal individuals in the Canadian economy (

Canadian Gay & Lesbian Chamber of Commerce: An organization designed to improve opportunities for gay, lesbian, bisexual, transgender, transsexual, two-spirited, and intersex owned/operated/friendly businesses ( Canadian Youth Business Foundation: A national charity whose mandate is to support business owners age 18 to 34 (

Chapter 2
Getting Started In This Chapter
Thinking about your target market as you develop a product or service
Getting your product or service to the right people Pricing your product or service Buying an existing business instead of building your own business
Deciding on a fair price for a business Considering a franchise Finding the right location and business premises Understanding incorporation and partnerships Knowing the rights and responsibilities of a corporation Safeguarding assets without incorporating Your business will be in big trouble if you offer a product or service that not a soul wants, or that your chosen customer group is not interested in.

In this chapter, we help you avoid those problems and give you hints on how to develop a product or service tailored for your target customers or clients, and at a reasonable price. And don’t forget that starting a business from the ground up isn’t your only option.

This chapter also gets you thinking about existing businesses and franchises. Where you do business is a big factor in your future success, so we point out what to remember when finding your ideal business location. We also get into the ins and outs of different forms of ownership, and what you should know about incorporating a business.
Developing Your Product or Service with a Market in Mind To start a business, you need a product or service to sell.

And it needs to be something that customers or clients want to buy.
Developing a product or service requires quite a chunk of your time and energy.
You’ll need to take on some tasks that may seem challenging, such as researching potential customers and existing competition.
If your idea is new and innovative, you may be able to get assistance with the evaluation, for example from

The Canadian Innovation Centre (CIC)
( in Waterloo, Ontario, an organization that grew out of the invention commercialization activities of the University of Waterloo.
Their website has information for inventors as well as links to other
useful organizations such as the (U.S.) National Inventor Fraud Center
(, which offers advice on how to steer away from invention marketing companies that are set up only to scam inventors.

Don’t get mixed up with a company that combines high-pressure sales tactics with a low success rate.

Is this idea right for you?
Or is this a good idea at all? Before choosing a product or service,
play a little Q and A with yourself: Is it legal? And if it’s legal now, will it become illegal after it takes off? Remember radar detectors for the travelling public?
Is it hands-off?
The idea may already be patented and the patent owner doesn’t want to license to you. (Go to Book II for more about intellectual property, such as patents.)
Are you legal? Some products and services can be provided only by a licensed individual or business. Is the product or service safe?
Could you cause harm to someone and end up getting sued?

Do you have the right reputation or expertise?
You may need both to develop the idea into a business and reel in customers or clients. Does anyone want the product or service? Your idea may seem wonderful to you, but to prosper, your market must be slightly larger than one person.

So you have to do some customer research — identify a target market for the product or service and estimate the size of the market. Here’s a brief guide to doing customer research. First, think generally about who your customers or clients might be
(keep in mind that you could be wrong about this, though).

For example, are they Other businesses?
A whole bunch of them or just one or two?
Are the businesses service providers or retailers or manufacturers?
Do the individuals live in a particular neighbourhood or geographic area, or do they live all over the country or around the world?
Are they men only?
Women only?
The young? Older people?
The well-to-do, or just anyone with a buck to spend?
Who’s the competition?
And what are they up to?
This information is known as competitive intelligence.
Your competitors may already have claimed all of the customers or clients you identified by doing your market research.

Or they may not. You can find out by assessing your potential market share.
To start with the question we just asked (Who’s the competition?),
your competition is made up of the following: Direct competitors — who offer exactly the same product or service Indirect competitors — who offer an alternative product that more or less meets the same need as your product Who-was-that-masked-man?
competitors — who offer something completely different that potential customers will spend their money on instead of on your product or a similar product, much to your regret and amazement Inertia — the tendency of customers and clients to do nothing at all when brought face-to-face with your wonderful product or service Look carefully at your direct and indirect competitors and see if you can find out whether

They’ve cornered the market and are doing such a good job at such a good price that you haven’t much hope of taking market share away from them.

Or whether you should be able to relieve them of market share because you can offer better value — for example, a lower price, a higher-quality product or service, a more convenient location, greater expertise, friendlier service, and so on. Sometimes the first competitor into the market may just have collected and educated your potential clients for you! Their business is profitable — are they growing or shrinking?
They’re big enough and mean enough to run you out of town if you show your face on the street (have you noticed how small airlines regularly get eaten?).

How much money can you put behind this idea?
You likely can’t get your idea off the ground for free. So you’ve got to crunch a few numbers to find out the following:
The approximate cost of launching your business.
This involves adding up your start-up costs plus bridge financing for your operating expenses until your business is generating income. The approximate amount of money available to you for a business start-up.

The cash you have on hand or can raise through family contributions may be enough to get your particular business up and running; or you may need a bank loan for a larger amount; or you may need a significant investment from an angel investor or venture capital firm. How much you’ll be able to raise (especially from outsiders) is linked to the likely return on investment for your idea.

So just because it will take $1 million to build a plant to produce your product doesn’t mean you should scrap the idea. It could be full steam ahead if an investor believes that your business could generate profits of $2 million annually after a couple of years or that the business might be worth $50 million in five years.

Finding a Route to the Target Market Okay, so you think you’ve got a product or service that can go the distance. Now you have to figure out how to get it from you to the person who will actually use it — so you have to decide on one or more 
distribution channels.

You have two basic choices:
Distribute directly:
The product or service goes from your business to your buyer
(most services and products take this route). Distribute indirectly:
The product or service goes from your business to another business to the buyer. Although your target market is the buyer, your customer is the “middleman” business.

Pricing Your Product or Service You can make a profit in different ways —
for example, by combining a small profit on each item or service provided with
high sales volume, or by combining a low sales volume with a big profit on each transaction. (Best, of course, is high profit on each unit and high sales volume, but not many businesses are that lucky.)

But if you underprice, you’ll lose money on every sale even if you sell a gazillion units; if you overprice, no one will buy at all.
How do you figure this whole thing out?
In this section, we talk about how to settle on the right price to charge.
Deciding on the minimum price you can charge Minimum price is not all that difficult to figure out. As a rule, you don’t want to charge less for your product or service than it costs to produce.

(An exception is offering the product or service as a loss leader,
to lure customers in — but you can’t keep that up for long, and certainly not on an important part of your line.)

The formula below tells you, as the owner of a start-up business, your cost to produce (your break-even cost):

Your break-even cost for the period is the amount you need to charge for each unit of your product or service to pay your direct and indirect costs.
Deciding on the maximum price you can charge Now over to the other end of the price scale.
Here, the ceiling for your price is the value of your product or service to the customer or client.
Value is what the customer perceives that he or she is getting in exchange for the cost of the product, and includes things such as quality and reliability of the product or service, image or prestige associated with the product or service, uniqueness of the product or service, backup from your business such as support and guarantees, convenience of dealing with your business

(such things as good location or inexpensive delivery or the helpfulness of your staff), and incentives such as rebates (money back following a purchase), discounts
(money off the purchase price), and other freebies.

If a customer believes that your price is greater than the value of your product or service, the customer won’t buy from you. Setting your price Setting a price comes down to supply and demand.

If a product is essential or useful and hard to find, the price can be higher and the product will still sell (until people run out of money).

If a product is not a must-have or is readily available, the price has to be lower if you want to sell. Higher or lower than what?
The competition’s price. So see what your competition is charging. When you know that, then you can implement one of the following three strategies: Charge more than the competition.

This will work only if your product is seen as more valuable than the competition’s. You can increase the value of the same product or service offered by the competition by (for example) creating a higher-end image for your business or by trading on your reputation as an expert. Charge the same as the competition. But you still need to increase the value of your product over the competition’s.

You could do this, for example, by offering a more convenient location to your target customers.
Charge less than the competition. Just be careful not to undercut your own cost of production, and keep in mind that you’ll acquire a “reputation.” Whether it’s true or not, customers and clients will tend to associate lower prices with lower value.

Only in rare cases will people think they’ve made a marvelous discovery of a business that carries exactly the same product as the competition, but at a lower price. Considering an Off-the-Shelf Business Building your own business is a lot of work. In addition to coming up with a business concept, you have to find a good location, prepare your business premises, buy equipment, and find and attract clients or customers (see Book VI).

And when you custom-build your business, you have no one to give you on-the-job training or to pass on wisdom gained from experience about what works and what doesn’t.
But custom-building a business is not the only way to go into business.
You can buy an existing business instead. In the next few pages, we weigh the advantages and disadvantages of each approach.
Buying an existing business You might want to buy an existing business for a number of reasons: You already know of a business that you want to own.
You’ll be able to eliminate a lot of the difficult, early work involved in building a business. You may be able to tap into a source of advice from the original owner. You may be able avoid some of the risks of starting a new business:

• You know that the product or service already has a market.
• Your immediate money situation may be better — borrowing money may be easier, because banks know that the risks of failure are lower for an established business than for a start-up.
• You may be able to get rights such as the right to distribute a specific product in a particular area, or the licence to manufacture a particular item.
But before you go rushing off to buy a business, know that buying a business has disadvantages, as well: A successful business isn’t cheap.

A successful business may not continue to be successful for you.
The success may have been based on the personality and/or skill of the current owner. The business’s problems become your problems.
Looking carefully at existing businesses Before the owner agrees to answer your questions, show you around the business premises, and let you see documents, he or she may ask you to sign a confidential disclosure agreement.

By signing the agreement you agree not to tell anyone else what you find out about the business, and usually you also agree not to use the information for any purpose but assessing the business for a possible purchase. Take a very careful, even cynical, look at any business before deciding to buy. In the upcoming sections, we set out some questions to guide your examination of a business that’s up for sale.
Why is the owner selling the business?
This may be the most important question to ask. Many reasons exist for selling a business, but from the buyer’s point of view, some are better than others. These reasons shouldn’t set off alarm bells for you:

The owner is retiring
( . . . as long as the business didn’t cause the ill-health).

The owner wants to pursue a different career or business opportunity
(unless a problem with this business triggered that desire).
The owner is having marital problems.
These reasons may signal trouble:
The business is not profitable.
The owner cannot raise enough money to finance the business.
Competition for the business is heating up. Markets for the business’s product or service are drying up.
The work hours are too long and/or the work is unpleasant.
The owner may be very forthcoming about the reasons for selling, or may be reluctant to talk. Even if the owner does talk, don’t believe everything you hear.

Try to get information from others in the same industry — business owners, employees, suppliers, and customers.

What is the reputation of the business?
A major reason for buying an established business is to get the benefit of its reputation. Speak to the business’s customers and suppliers to find out what they think of the business.
Contact the Better Business Bureau, industry associations, and any licensing bodies to see if any complaints have been made against the business.
Search online for reviews of the business.

What is the reason for the success of the business?
You want to make sure that the business has been successful because of a lasting reason. So here are some areas to check out: Does the business have a great product or service — or was it built on a fad that’s now fading?


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