Most newcomers begin planning for their life in Canada much in advance of their move. This often is a combination of researching where to live, understanding local transportation options, various landing formalities to be completed, and finding a source of livelihood. While many of them have “job search” at the top of their to-do list, some of them aspire to start their own business.
In this article, we will walk you through some of the tasks that you can complete before you move to Canada. This will help you arrive informed with a plan of action.
Here’s a checklist of things you can do in pre-arrival to setup your business in Canada:
1. Develop your business idea
Developing and detailing out your business idea can be a slow and time-consuming process as it involves research and thorough thinking. As you start planning your move to Canada, it is a good idea to set aside some time for research pertaining to market trends and competition, defining your market niche, outlining business goals, and fully fleshing out your product and/or service offerings.
If you already have an established business and are considering expanding in Canada after you move, you may want to think about how to adapt and localize various aspects of your business. And once you land in Canada, you can reassess local competition before executing your business plan.
2. Write the business plan
A business plan is a document that serves as a guide for your business, outlining the roadmap, goals, milestones, success measures, and other useful information. Having a strong business plan is key to obtaining funding and attracting investors, measuring your success over time, and planning for operational requirements.
Some of the parameters that you may want to include in your business plan are business goals and objectives, market opportunity, product and/or service positioning and related market analysis, competitor landscape, financial projections, and target market information.
3. Plan the business structure
As you develop your business idea and write the business plan, you should also start thinking about which structure might work best for your business. There are five main types of business structures in Canada:
- Sole proprietorship: A business made up of one business owner (you) that has not been registered with the government as a corporation.
- Partnership: A type of business consisting of two or more individuals that own a business together.
- Incorporation: A process in which a separate legal entity, owned by its shareholders, is formed.
- Cooperative: An incorporated business that is democratically controlled by people with common needs.
- Non-profit: Provide a product or service designed to benefit their community. The setup process is similar to setting up any other business.
4. Research business names
Naming a business involves plenty of research to check if the name you want is taken. The good news is that there are services and databases that can easily be accessed for research purposes, irrespective of where you are located in the world.
You can begin with a general internet search to look for other businesses that might be using the name you intend to use. For more in-depth research, you can look at New Upgraded Automated Name Search (NUANS), Canada’s national database, and also the provincial and territorial databases.
NUANS Name Search: Everything you need to know – The article guides you on how to use the NUANS database, provides cost estimates for the NUANS report, and tells you how to order one.
5. Start networking
Networking is part of Canadian culture and way of life. It can be a great way for you to start building your network before you arrive in Canada. Consider reaching out to individuals, business owners, organizations, and associations from the same industry as your business, and talk to them about their journey. You can ask about the challenges they faced and learn how they overcame them.
Networking is also a good opportunity to learn first-hand about the local market as well as existing policies and processes that might impact your business in Canada. Over time, some of your connections may become mentors, providing valuable advice as you plan your business and execute the setup.
6. Learn about Canadian sales taxes
As a newcomer and an entrepreneur, it is likely that you will need clarity on various aspects of sales taxes. Ensuring that you’re charging correct sales taxes for the goods and/or services you’re offering is crucial to running your business successfully.
Pre-arrival is the perfect time to familiarize yourself with the Federal sales tax: Goods and Sales Tax (GST) and Provincial sales taxes such as Provincial Sales Tax (PST), Retail Sales Tax (RST), Quebec Sales Tax (QST), and Harmonized Sales Tax (HST). Read our article, Newcomer’s guide to starting your own business in Canada, for a detailed overview of these taxes.
To learn more about Canadian sales taxes, rules and exemptions associated with them, and the process to register, file, and pay taxes, download this free tax guide for small businesses.
7. Plan your financing options
Money and financing are essential to start up and run any business. Planning for it in advance will help you hit the ground running after your move to Canada.
Tip: If you’re wondering how much money you need to start a business, you can use RBC’s start-up cost calculator to get an estimate. It takes into consideration both startup costs and working capital.
There are two ways you can fund your venture – by using your own money or borrowing money from other individuals, financial institutions or through business grants.
Personal savings is the cheapest form of financing that offers you complete control over expenses and how you run your business.
If you decide to borrow money, there are a few sources you can consider:
- Friends and family: Allows you to work out a repayment schedule that’s comfortable for both parties.
- A bank: Canadian banks offer business loans for purposes of financing expansions, purchasing new assets, selling or acquiring a business, or securing working capital for day-to-day operations.
- The Business Development Bank of Canada (BDC): The only Canadian bank devoted exclusively to entrepreneurs. It provides start-up financing of up to $100,000 CAD to entrepreneurs.
- Government programs and grants: The federal government has various loan programs to fund businesses in specific industries and communities. To learn more about how you can apply for a grant, download this free ebook.
- Nonprofits and community-based organizations: They help entrepreneurs belonging to certain demographic groups or geographic regions. The complete list of community-based organizations can be found on the government of Canada website.
- Angel investors and venture capitalists (VCs): They invest money in businesses in exchange for equity, which is a share in the company.
- Crowdfunding: Approaching the general public to raise money. Crowdfunding campaigns are generally hosted on websites like Indiegogo and Kickstarter, among others.
Learn and explore the various ways and means of securing the required funds for your business in Canada and get off to a confident start with your venture.
Setting up a business in Canada involves many steps and processes. Preparing and researching in advance will help you be aware of all of them and arrive informed, thus enabling a smooth and easy transition to Canada. Download this free checklist so that you are prepared to launch your business.