Starting a small business is an exciting venture that requires careful planning and understanding. Whether you’re launching a side hustle or a full-scale enterprise, it’s helpful to break the process into manageable steps that will set you up for success. While many of the same steps apply across the board, there are nuances to requirements that vary by industry and region.
Here’s a quick-start guide for how to start a small business in Ontario, with helpful links to help you navigate your journey:
Research and planning
Like any big decision, thorough research and planning will help you make crucial decisions. Knowing your market and having a clear strategy will make the rest of the process smoother.
Conduct market research to identify your target customer base and competition. What’s the current appetite or demand for your product or service? Is your business better suited to a brick-and-mortar location, or can you operate remotely? Answering these questions will help tailor your business offerings.
It's also important to formalize these details into a business plan that outlines your goals, target market, competitive analysis, pricing strategy and a financial forecast. A business plan will not only keep you on track to meet goals and deadlines, but will also serve to be a necessary tool when seeking funding for your business1.
Legal steps
Confirming your business meets all legal requirements provides protection and ensures compliance with Ontario law. To legally set up your business, it’s important to determine what type of business structure you’ll operate under: a sole proprietorship, a partnership, or a corporation. The structure you choose affects liability, tax obligations and operational control.
You’ll need to register your business through ServiceOntario, and obtain a business number if applicable for tax purposes, or if you plan to be importing or exporting goods. Depending on your industry, specific permits may be required, like food premise, music licensing or liquor sales. The BizPal.ca tool helps you determine what permits and licenses you will need for your business based on provincial law and local guidelines. The Ontario government has also launched a beta tool to provide similar resources, as well as a tracking tool to check the status of license and permit applications.
It’s also important to take note of regulations that may apply to your business at both the start-up phase and throughout the year, including workplace health and safety accessibility, commercial vehicles or and employment standards.
Setting up finances and administration
Handling your company’s finances is one of the most critical parts of running a business. Despite the temptation to use a personal banking account, it’s important to set up a business banking account2 to keep your business’s finances separate. This will make managing your books and tax filings much easier. Meridian offers several chequing and savings account options for small businesses, and an advisor can help you determine the best fit for your operation.
At some point, you may require additional funding for your business. Speak with your banking partner to discover the options available that make the most for your business – this is where a detailed business plan comes in handy to maximize the funding options your banking partner can offer.
Government grants, investments and tax credits may be an additional option for support when launching your new business. The Ontario government offers funds to business and not-for-profit entrepreneurs in various areas, with a comprehensive list on their website listing programs by region.
Along the same lines, it’s important that you’re prepared for the tax implications of running a business. Businesses earning more than $30,000 annually must register a GST/HST account with the federal government and collect GST/HST on taxable sales. You can view an outline of these steps on the Government of Canada’s website. In addition, if you are self-employed, an unincorporated business or in a partnership, you must also report your personal income and contribute to the Canada Pension Plan each year. If you plan to hire employees, you will also need to set up payroll taxes and deductions, including the Employer Health Tax. It’s important to ensure you are compliant with these regulations on an ongoing basis, and consult an advisor for help when needed.
Business insurance isn’t a mandatory step, but many advisors will recommend it even if the businesses is operating out of your home. Business insurance can help protect property, operations and your ability to generate income – claims that cannot be made under home or tenant insurance. Explore the different options and speak to an insurance advisor to access quotes.
Building your brand
With proper planning, legal structure and financial management, your business will be off to a great start. Once the administrative and financial logistics are in place for your business, an exciting next step is to create a brand that resonates with your audience and market your product or services. This can help build a customer base, helping your company become profitable. You may want to create a website and use social media platforms to give your business a face and establish a presence online. Make sure your website is easy to navigate and clearly showcases your products or services. Consistent use of social media will help your follower count grow. And, marketing your business at local events or through business associations helps spread the word too.
For more information on how to start a small business in Ontario, visit the Government of Ontario’s website for a detailed guide, and visit your local Small Business Enterprise Centre location to access tools and resources, including free consultations, workshops and seminars and up-to-date information.
1Exploring funding for small businesses in Ontario
2Choosing the best small business account
