There are always arguments about how the economy could be better, how consumer spending is low, interest rates are high, and good help is hard to find. But the truth is that if you have a solid business idea and the will and planning to execute it, the right time is probably now.
Ontario is a thriving location for small businesses, hosting nearly 37% of the 1.19 million small businesses in all of Canada.
It’s definitely a challenge, and there are a lot of things to know before you get started. But with the right help, some helpful advice, and a little determination, you can get your small business off the ground more easily than you think.
Writing a business plan
It’s not enough to just have a great idea. That’s like jumping into water head-first without looking for rocks. While you might believe in your heart that this idea will be profitable, you’ll have to prove it to others, whether they are partners or investors.
The best way to do that is to write a comprehensive business plan, which should include:
- Goals: Detail what you want to achieve with your business. Make your goals SMART: specific, measurable, achievable, relevant, and time-bound. Include short-, medium-, and long-term goals.
- Rationale: Explain why this business makes sense and why it’s needed. Include the reasons why you’re the right person to be at the helm.
- Products / Services: Be specific about what you will produce or provide to consumers. Focus on the unique selling points that will make your business competitive.
- Budget: What will this business cost to start up? What capital do you need for equipment, rent, materials, etc.? How much will your labour costs be? What about marketing and sales? Make a detailed budget for both start-up and operations.
- Financial Projections: Explain how your profit structure will work and project when the business will become profitable. Include growth potential. Don’t be afraid of a long wait. Most small businesses in Canada only become profitable after three years on average.
- Sales and Marketing: Tell how you will spread the word about your business and attract customers.
- Legal: Explore the permits and licenses you’ll need to set up your business, which bodies they’re issued by, and how frequently they need to be renewed.
With a complete business plan in your grasp, you can begin to approach partners and financiers and make a strong case for them to support your start-up.
Understanding government requirements
One of the key hurdles for new businesses is a lack of familiarity with the many requirements you’re responsible for meeting. Government requirements also differ by province.
With proper research, however, you can be prepared to meet any requirements that come your way and not be surprised by the extra costs they may represent.
Luckily, the requirements for small businesses are outlined by the Government of Ontario and can be found in online resources. The Ontario Business Registry explains in detail how to register the name of your business and tells you how to receive a BN (business number) for paying taxes from Revenue Canada. BizPal Ontario lists all the permits and licenses you’ll need to get set up in this province.
You can also get important business and tax advice from small business advisors and chartered professional accountants.
Estimating business start-up costs
A small business in Ontario is simply any enterprise with between 1-99 employees. They can be vastly different in operations, and setting up something with one employee versus 99 is going to represent disparate costs.
But when you’re estimating your start-up costs for a small business in Ontario, the items you need to consider are normally quite similar. The most common expense to include in budgets are:
- Employee training costs, salaries, and benefits
- Rent or purchase of premises
- Construction or remodeling
- Equipment
- Raw materials/supplies
- Warehousing
- Transportation/shipping
- Communications costs (internet, phone, etc.)
- Insurance
- Accounting
- Permits and licenses
- Legal costs
- Marketing and sales
This list is not exhaustive, and your specific business may have unique expenses. When planning, remember that many things will end up costing more than you think, so plan that into your budget accordingly.
Finding funding
Once you have your budget calculated and double-checked, you might find you don’t have the money to start this business yourself. While most small businesses get a significant amount of their funding from the personal finances of the business owners themselves, almost all small enterprises have to look to outside sources for at least part of their funding.
Luckily, the Government of Ontario offers advice on how to start your business and gives an extended list of provincial funding sources that could apply to your business. The federal government also gives out business grants to support small enterprises.
Bank loans or credit lines are used by about 50% of small businesses to either start-up or handle their day-to-day expenses. Other sources of funding include crowdfunding campaigns, personal loans, government loans, and even credit cards.
You can also secure private funding from business finance companies. Companies like Uplend offer customized equipment finance and leasing solutions for businesses across Ontario and all of Canada. Private financing can be an excellent way to help a small business with a big idea succeed.
Where to look for business advice
You may have a great idea that you’re absolutely sure will transfer into a successful business. However, if you have limited business experience, the thought of actually taking that step forward can be intimidating, to say the least. After all, roughly 50% of small businesses close after ten years of business.
But you’re not alone in your desire to start a business. Many people have done it and are willing to share their experience and expertise with you.
The Government of Ontario offers extensive advice on how to start a new business, including how to register your business to get things officially started.
The Ontario Small Business Center Network is an association of entrepreneurs in Ontario with 54 locations to help you find advice and local business connections.
Likewise, the province is covered in Small Business Enterprise Centres that give advice and workshops to help start-ups get off their feet.
Friends, family, and mentors can also help with advice and guidance to help your new small business succeed. So if you’ve been waiting for the right time to start your enterprise, that time is now.
