Small Business Planning and What's Needed
Small Business Planning and What’s Needed
So you’ve decided to start your own business in Ontario, but you’re not sure how to go from your great idea to being in business. This article will give you a list of helpful information and links that can help guide you on your business start-up journey.
The Business Plan
Having a great idea usually isn’t enough to start the operations of your business. We’ve all heard the stories of multi-million dollar businesses that have had their starting plan on the back of a paper napkin; having even a rough plan on paper allows for a number of advantages, such as keeping you focused on the important goals, and allowing for an easier time gaining financing.
Although a rough idea written down is a start, it is highly suggested that you take some time and create a full business plan to help you, and others, fully understand all the operational aspects of your business. Your business plan can be easily broken down into seven major sections (found here in much more detail), which will allow you to organize each element of the future of your business.
Things you will need to decide on during this starting phase could include:
- Your Target Market Size – You don’t want to be selling the same product to just a few potential customers in a highly competitive market, do you?
- Your Business Structure – Do you plan on owning the business by yourself or with others?
- Your Business Name – Do you have an easy to remember business name that fits your industry?
- Your Location – Do you already have a location in mind for your business?
- Sales & Marketing – How will you make sales, while standing out from your competition?
- Is Your Business Regulated? – Do you have any export, import, marketing, or other regulations and obligations to consider?
Financing Your Business
The importance of a well thought out and thorough business plan cannot be stressed enough, as it’s the key to acquiring business loans, government grants, or private sector investors. Banks, investors, and government agencies will only borrow to, or invest in, businesses that can demonstrate they are viable; there is a demand for the product/service, you have the ability/knowledge to fulfill this demand, and that the exchange of the product/service is profitable.
After you have a solid business plan and want to gain these types of business loans, business grants, or investors, you need to know where to look.
Government Grants & Loans
Both, the Government of Canada and the Government of Ontario, have programs available for small businesses to gain funding. The Canadian Government has many programs available (View the full list on the Canadian Government website) including:
- Grants & Financial Assistance – Receive public funds to launch your business
- Loans & Cash Advances – Receive a government loan for your existing business
- Loan Guarantees – Gaining a government backed loan that guarantees your loan to creditors
- Tax Refunds & Credits – Take advantage of tax benefits to reduce your overhead expenses
- Wage Subsidies – Government financial assistance in hiring qualified employees
- Equity Investments – Long term investment into your business
The Ontario Government also has many programs available, more focusing on the operations of your business. Through providing advice, workshops, consultations, and mentoring programs, the Ontario Government is helping small businesses to thrive. We’ve included this link to, what we believe to be, an amazing resource for all Ontario small businesses, where you can:
- Find a Small Business Centre to help you start or grow your business
- Assist you in accessing government programs
- Assist with market intelligence
- Provide you with an e-business toolkit
- And much more
There is also a great opportunity from the Government of Ontario to obtain financing, using the Search Grants and Financing function on the government website.
There are many programs available; however finding the right program for your situation can at times be overwhelming. It’s suggested to reach out to a professional accountant for assistance in navigating what’s available for you.
Private Sector Financing
Private sector financing lenders are primarily concerned with earning a return on their money invested. They will assess the risks and potential for return, if they were to invest into your business. These investors want to see that your business has the potential to be profitable, while being able to pay back their money invested. This is again why it is suggested to get in touch with a financial professional to assist in the creation of a solid business plan with a strong financial plan.
CrowdFunding Campaigns
An emerging method for business financing has been what is known as “Crowd Funding”, which is raising money through small contributions from the public, usually online. There is a misconception that crowdfunding is “free money” to start or operate a business, however there are several different models that are used in crowdfunding.
- Donation & Rewards Model – A donor receives a reward dependant on amount donated
- Lending Model – A lender receives interest, or the product/service, plus the amount given for monies borrowed
- Investment Model – An investor is given a part ownership of the project being funded
There are several drawbacks to each model, as crowdfunding in general does have its risks. The biggest risk is the risk of losing your intellectual property through the copying of your business idea! Protect yourself from this type of intellectual property risk by contacting a professional before starting a crowdfunding campaign. Visit the National CrowdFunding Association of Canada for more information.
Registering Your Business in Ontario
Registering a business name in Ontario is very simple and fast, thanks to the Ontario Governments online application process. The cost of simply registering or renewing your business name in Ontario is $60 as of May 2015. If you’re a little computer savvy and have a great business name, you can check if it’s available, or register it now by using the online application.
There may be a time when you will need to register for your Business Number with the Canada Revenue Agency, such as:
- You Need to Collect HST
- If you have an employee or employees
- If you wish to incorporate your business
- If you import into Canada or export out of Canada
- And other program accounts
It’s important to note that the CRA Business Number is not the same as the Ontario Business Identification Number. It’s important that before contacting the CRA concerning registration for a business number, that you contact a professional accountant, as they will be able to provide you with clarity and assistance regarding your responsibilities to the CRA as a small business owner.
Regulations, Licences & Permits
You will need to ensure that your business follows all the regulations, licence requirements and permit requirements for the Federal, Provincial, and Municipal Governments that your business is operating in. Again, the government of Canada has a helpful search tool that will make the process of ensuring you are compliant much more simple. More information on this can be found at the Government of Canada’s website.
Next Steps
So you’ve found your market, got your product, have a solid business plan, financing for your start-up expenses, and are ready to go live on the market. What are the next steps to ensuring that your company stays successful? The next article in the Small Business Series relates to your finances, ensuring that you stay on top of all your transactions. Can you guess the Topic? Stay tuned for its release later this week.