2021.4.1

How to Start a Small Business

Written by Austin Chegini

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There are over 1.2 million small businesses in Canada. To add context to this figure, these small businesses make up over 97% of all businesses in the country! 

Entrepreneurs across the country have found success in forming restaurants, stores, bars, and more. If you aspire to achieve the self-employed dream, then you may want to join the ranks of these successful business owners. 

To help you get going, let’s see how to start a small business and what it takes to succeed. 

Why open a small business?

The US economy depends on small businesses, but why would someone go through all the stress of owning their own company when they can simply work for someone else? Well, here are some common reasons why you should pursue entrepreneurship. 

Be your own boss

Starting a business means the buck stops with you. You set your own hours, choose your own employees, and do business with whomever you want. If you are tired of taking orders from others, entrepreneurship is incredibly freeing.

Increase earning potential

Working a normal job means you get a steady income no matter how hard you work. Unless you work in a sales job or other commission-based role, you could spin in your chair for eight hours and still receive a paycheck. While this is fine for many people, some prefer to be in control of how much they earn. 

As a small business owner, your income is directly tied to how hard you work. If you put in the time and effort, you can earn as much as you want. The possibilities are literally endless. 

Create jobs

Do you want to help others but don’t have the means to do it? By starting a business, you can employ people and ensure they receive a regular paycheck. And the harder you all work and the more business you generate, you can create more jobs for your community. 

Be happier

Several studies and surveys have found small business owners to be happier than the average worker. Let’s see why these entrepreneurs enjoy life so much:

  • Most work fewer than 40 hours per week
  • 97% said owning a small business gives them a sense of pride and accomplishment
  • They have more time to spend with loved ones

When you think about it, who wouldn’t be happy to be in control of their future? You don’t have to worry about toxic leadership, bad coworkers, or not being paid fairly.

Steps to open a small business

Come up with an idea

Sit down and consider what type of business you want to start. To start, think about if you want a retail or hospitality business. Next, consider your interests and capabilities. While you might make a lot of money selling clothes, you might not find enjoyment in the retail world. 

During this stage, think carefully about what it takes to open a small business. Some operations require more work than others, and you want to start a business that fits your lifestyle. 

Some questions to ask yourself include:

  • What do I enjoy? 
  • How many hours can I commit per week?
  • Will I enjoy spending every day on this business? 
  • How much money do I have? Where can I find funding? 

Find partners and get advice

After determining what type of business to create, you may want to get some help. As a first-time entrepreneur, there are a lot of pitfalls you’ll want to avoid. Failing to prepare for these issues could land you in legal trouble or result in mountains of debt. 

If this is your first time starting a business or if this is a new industry for you, it may help to consult an expert. For example, if you are starting a bar, you may want to speak with a bar owner in your area.

If you want an even deeper level of support, you could bring in a partner to co-own the business. Returning to the bar example, one partner could manage the bookkeeping, legal matters, and other general business matters. Then, the other partner could lead training, oversee daily operations, and interact with customers when needed.

Write a business plan

Any business needs a business plan, even if it is only one page. This document will serve as the roadmap for your business and will show investors/banks/other entities that you have a solid plan. 

A business plan should explain the purpose of your business, explain your business model, and offer detailed financial projects. On top of this, you will want to introduce your leadership and show that there is sufficient demand in the market for the business. 

Read this guide by the Small Business Administration to learn more. 

Raise funds

Do you know how much it costs to start your business? While startup costs expenses vary, you should be prepared to spend several thousands of dollars before opening your doors. 

On top of this, you will need to have money in reserve since it may take some time to generate enough revenue to sustain your business.

As a small business owner, you can acquire capital from these sources:

  • Savings
  • Family and friends
  • Co-owners
  • Private investors
  • Small business loans
  • Small business grants 
  • Crowdfunding platforms

Form a business entity

Any business in Canada needs to be registered with the government in some form. By default, any business you create will exist as a sole proprietorship. This means the business falls under your personal control, and you will report the business income on your personal tax return. 

For a variety of reasons, however, owners may choose to form a different busines structure. Forming one of these entities may be necessary to protect your personal assets, create ownership shares, save taxes, and present a professional image. 

Some common business structures include:

  • Partnerships
  • Corporations

You can learn more about these entities via this Government of Canada webpage.

Obtain a business number and bank account

Similar to how every worker needs to obtain a social security number and pay taxes, businesses need to obtain a business number from the Canadian Revenue Agency. This number is used when filing taxes, paying workers, and carrying out other business functions. 

Once you get your business number, you will need it to register for a business bank account. This account should be used for all professional transactions, including buying inventory, paying staff, and billing clients. 

Choose a location

Whether you are opening an office, store, or restaurant, you will need a physical location. Since most consumers travel less than 20 minutes for routine purchases, you want to make sure your new business falls within this distance. 

Some core items to consider during this step include:

  • Rent cost
  • Parking and delivery access
  • Available utilities
  • Nearby competition
  • Building security

For more information, read our guide on choosing a business location.

Invest in equipment and inventory

No matter if you are working solo from your garage or leading a team of 100 from a retail store, you will need some supplies to get started. This will be a significant investment, but you will want to minimize costs as much as possible. Buying used restaurant equipment or office supplies may be a wise move. 

For starters, many businesses will need the following:

You can get a more detailed list of supplies via resources like our cafe equipment checklist and guide to opening a sports bar.

Start a marketing campaign

Once your space is furnished and ready to open, you need to build excitement in your market. After all, people can’t do business with you if they don’t know you exist! 

Depending on the size of your market and the purpose of your business, your marketing plan will likely include one or all of the following:

  • Billboards
  • Newspaper ads
  • TV placements
  • Creating a website
  • Social media marketing
  • Direct mail flyers
  • Endorsements and partnerships
  • Influencers and ambassadors

Open your doors

With all the heavy lifting out of the way, you can start doing business! This is a big moment, so make sure to celebrate and take some photos. You may even want to plan a grand opening event. 

But remember, this is just the beginning of the journey. You now need to focus on delivering phenomenal service and keeping your business competitive. 

Opening a new business? See how Epos Now point of sale systems can help you do business better!

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