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| How do I start a small business? |
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There are three common ways to get into business. You may wish to start the business as a new enterprise, you could buy an existing business, or you may decide to purchase a franchise.
Steps In Starting A Business:
» Get an idea
» Determine feasibility
» Research consumer, competition market & industry
» Develop a business plan
» Arrange financing
» Obtain Registrations & Licenses
» Implement Business Action Plan
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| What is a business plan? |
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The first planning document that you will create as a potential business owner is a business plan. If your vision statement is a compass, then your business plan is a road map. It should be capable of guiding you, the entrepreneur, through a maze of business decisions and alternatives while successfully avoiding detours and dead ends.
A business plan is a carefully thought out document that outlines the nature of the business, your objectives as an entrepreneur, and the actions that you will take in order to reach those objectives. A business plan is really a series of small, related plans that cover the four major business functions. When you are finished, your business plan will contain:
» a marketing plan
» a human resources plan
» an operations plan
» a financial plan
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| Do I need a business plan? |
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Many entrepreneurs, most business advisors and all institutional lenders recommend making a business plan.
Planning will:
» Help you decide whether your business idea is really a business opportunity
» Make you think through the business idea in detail, including aspects you hadn't considered before
» Anticipate problems and develop strategies for dealing with them
» Manage your business effectively
» Help you to communicate your business idea to others
» Help you to obtain financing
» Guide your business operations in the months and years ahead
» Provide you with a clear idea of how the business will operate
» Help you decide on the most valuable use of your time
» Identify which elements of the business are critical to success
» Establish performance targets and timelines which will tell you how the business is performing
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| How do I make a business plan? |
If writing a complete business plan seems like an intimidating project, you can start by assembling the smaller plans.
Your Marketing Plan
Marketing is the single most important concept in the business venture, because without customers, there is nothing. Every business needs customers in order to succeed. The objective of marketing is to provide the owner of a new or growing business with information and tools for building and maintaining a customer base.
Your Marketing Plan will include:
» A description of your target market, based on a market survey.
» A description of present market conditions, including your competition.
» Your product strategy.
» Your pricing strategy.
» Your promotion strategy.
» Your distribution strategy.
Your Human Resources Plan
This part of your business plan will describe your human resource needs. Keep in mind that human resource issues in a small business are different from those in larger organizations. Rather than having job descriptions which people fit into, the entrepreneur is likely to have people around whom job descriptions are developed. Understanding what makes a good employee for your business begins with a solid understanding of the tasks, workload and expectations required by the business. Human resource planning also requires an assessment of the entrepreneur’s own skills and abilities, strengths and weaknesses.
Your Human Resources Plan will answer these questions:
» What are the tasks that need to be done in the business?
» What skills and characteristics are needed for these tasks?
» Where will you find employees?
» How much will you pay them?
» What are the benefits of working for you?
» What professional advisors will you need – lawyer, accountant, banker, and so on?
» What role will you, the entrepreneur, play in the business?
Your Operations Plan
Why does one retailer do business on the Internet while another operates out of a storefront? Why does one manufacturer locate downtown and another in a
suburban industrial park? Why does one business accept credit cards and another cash only? How is it possible for two similar businesses to use different production methods and equipment? The answer is Operations Planning – the decisions you make in the day-to-day running of your business.
Operations planning will help you to:
» Assess the technical feasibility of your business.
» Establish operations and service targets.
» Identify the resources needed to produce your product or service and how best to acquire them.
» Analyze the costs of producing your product or service
» Operate your business efficiently and cost effectively
Your Financial Plan
Starting a business requires money – money for start-up and money to sustain operations during the first few months until the business is able to pay for itself. How does an entrepreneur know how much money is needed to start the business? The answer is Financial Planning.
Financial Planning brings together all the other decisions you have made with respect to marketing, human resources and operations, and expresses them in the common language of business. Your financial plan is where you evaluate and describe the following:
» The costs of doing business
» Projected revenues
» Sources of financing
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| Do I have to register my business? |
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"Registering" a business most often refers to registering the name of a business. Under the Business Names Act of Ontario, businesses must register their name. Individuals using their own name (e.g. John Smith) to carry on business do not have to register until a word is added to their own name (e.g. John Smith Crafts). Visit Business Name Registration Information for more details. A Business Licence may be required by particular businesses in order to operate in Ontario. This is in addition to the business name registration. For example, “Joe’s Garage” is required to register its business name and obtain a licence in order to operate as a garage. To determine if your business will be affected by local regulations, licences, municipal business tax or zoning requirements contact the clerk of the city, town, village or rural municipality where your business will be located. Use BizPal service to access business licences and permits information online.
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| Where can I register my name & what is the cost? |
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You can register your business name via the Internet at the Ontario Business Connects (OBC) Web site. The fee for registration using the Internet is $60 and $8 for a name search. Once you have completed your on-line business name registration you will immediately receive a Master Business License (MBL) in Adobe Acrobat format.
Search / Register / Renew a Business
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You can choose to register your business name in person or by-mail directly with the Companies and Personal Property Security Branch of the Ministry of Government Services (MGS) in Toronto; the cost is $80 for registration and $12 for a name search. In-person registrations are processed immediately. Registrations by mail can require up to eight weeks for processing. To print forms, go to:
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There is a number of computer workstations across the province, also under the OBC initiative, at which you can register a business name. The cost is $60 for registration and $8 for name search. Business name searches and registrations at OBC workstations are processed immediately. Clients can pay by cash, debit, cheque, money order or credit card. In London, visit:
ServiceOntario Office
100 Dundas St.
London ON, N6E 1L3
Phone: 1-800-565-1921
Web Site: www.serviceontario.ca |
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| Is it mandatory to register for HST? |
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Most individuals or businesses engaged in a commercial activity with annual sales and revenues of HST-taxable goods or services totalling more than $30,000 must register and charge the HST.
If your total annual sales are less than or equal to $30,000, you are considered to be a small supplier and are not required to have a Business Number (BN) for the purpose of HST. If you do not obtain a BN, you do not charge HST.
For further information,
visit the web site:
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Goods and Services Tax/Harmonized Sales Tax(GST/HST)http://www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/menu-eng.html
You may contact CRA directly to inquire about the regulations mentioned above, by calling 1-800-959-5525.
In London, visit:
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Canada Revenue Agency (CRA)
451 Talbot St., PO Box 5548
London, ON N6A 4R3
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| Are there grants available for starting a business? |
While there has been a great reduction in the number of grants available to general business start-up over the past several years, there are some monies available. Most of the existing programs are targeted strictly to specific industries, geographical areas or particular groups of entrepreneurs (minority groups, youth, employment insurance recipients, etc.) To search the database of government programs available in Ontario, visit www.canadabusiness.ca
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| Where can I get a loan for my business? |
In the early stages, the most important financial sources will probably be you, friends, relatives and financial institutions.
The most common source of financing for small businesses is the chartered bank. Banks can provide a number of financing options, such as short-term loans, long-term mortgage loans and, in some cases, loans against inventory or accounts receivable. Other important sources of financing in this category include trust companies and credit unions.
For very small firms and home-based businesses, credit cards and lines of credit often provide a ready means of obtaining small-scale debt capital. While convenient, they bear relatively high rates of interest and limit the amount of capital available.
Each situation is different, and it is critical that a good business plan be developed to determine the overall needs of the business.
Click here for more financing information.
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| Who can answer my legal & accounting questions? |
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| Where can I network with other Entrepreneurs? |
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| What are the benefits of incorporating? |
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A corporation is a legal entity that is separate from its owners, the shareholders. No shareholder of a corporation is personally liable for the debts, obligations or acts of the corporation. Directors, officers and insiders can bear some liability for their involvement with the corporation. A corporation can be formed at either the federal or provincial level.
Advantages:
» Limited liability
» Specialized management
» Ownership is transferable
» Continuous existence
» Separate legal entity
» Possible tax advantage (if you qualify for small business tax rate)
» Easier to raise capital
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