Bored by your 9 to 5 work life?
Is there an inner voice urging you to escape the mundane professional life, the grunts of your boss? Is your mind innovative enough to brainstorm ideas and transform it as a business idea? Are you willing to be bold enough to choose the path less traveled when the two paths of business and job diverge in the woods of professional life?
If so, have a look at the article and hack the quick steps to set off your start-up idea.
Ideating a solution for an existing problem statement is simply not enough for starting a business. Know the risks and hurdles that you may have to encounter on your journey. Take a bold leap, but before that, take a look.
- The first year of your start up requires dedication and efforts to chalk out your business strategies and strive towards sustainability
- In an era of consumerism and cut throat competition, cash flow is a major hurdle
- Tax is one of the top issues
Steps Before Starting Your Business
Do away with the monotony of clerical work. Your business gives you the opportunity to let your passion marry your profession. Yet, there are some essential-ties and to-do-lists before you set up your business. Strategize, create a flowchart of your business processes and be disciplined in your work … and you have won half the battle.
1. Focus on the Reason – What’s the purpose of business?
Any mission you undertake, be it a project or case study or a start up idea, should have clarity of purpose. Your business idea needs to state a well-defined mission statement, the problem it intends to solve and the unique values which make you excel. The mission and the raison d’etre of your company shall serve as the foundation stone of a successful business.
2. Identify a Market Opportunity and Customer Base
The product or service that you have envisioned to provide must be unique from the peer companies. Define what would draw customers to your product and thus analyse who your potential customers would be. Find out the level of competition that other similar companies in your sector may pose. That would assist in your SWOT analysis and strengthen your start up model. SWOT Analysis is a key component of any business plan writing.
3. Plan a Business Canvas
Prepare a blueprint of your resources required, plans to manage the finance and ways to expand your business to a macro market. Start with a business model, a one page document with all crucial details.
4. Analyse your dime and penny
68% cases show that people embarking on start up ventures regret for not having looked into financial management in the first year of their business. Be mindful of the cash, as it takes a few years to build up on your revenue. Whether you are self funded or rely on your personal savings, chalk out the expenditure versus earning balance sheet that would ensure the profitability and sustainability of your business. Prepare the financial projections for your business, atleast very basic one, consult a professional accountant if you cannot do so.
5. Start Up Cash – Initial Investment
What if your wallet does not provide you the necessary initial funding? After dishing out your personal savings, after you have resorted to your friends and family for the initial funding, you may go for crowdfunding, get microloans or personal loans, think bigger go for IPOs. You may also receive financial grants for supporting your start up depending on which country you belong to. In Canada, government is encouraging startups and entrepreneurship, and support in a variety of ways in the form of business grants and financing programs.
6. Decide what Business Structure to use in Canada
Will you be able to be the sole owner of your company and keep it soaring high? Or do you need to enter into a partnership for dividing the responsibilities and profits? Or do you want to see your startup working as a corporation? Whether to choose from an unincorporated business form or operate in a corporate form in Canada, both of these have pros and cons. Even in the corporate form, you will face question whether to incorporate a federal corporation in Canada or go for a provincial corporation. What are the benefits of having a corporation, you can read here.
7. Legal Matters
Take care of the legalities associated with launching a business. Contact a lawyer for looking into the legal and contract disputes, including acts like getting your logo registered, filing a patent or copyright and clear your queries regarding the necessary actions for a partnership venture or equity shares for crowdfunding or private investment. You may start your business without a lawyer but at some point you may need legal services especially issues like patent filing. However, the situation like business incorporation, you can discuss the matters with your professional accountant when you discuss tax planning.
8. Name and Fame
Get your business a name and register it to ensure that it is accepted. In some cases business names are protected once registered. For example, a federal corporation has a name protection next to trademark. Business names which belong to unincorporated businesses are often less protected. For example, in Ontario you are responsible for checking the business name availability before registration. You can register the similar name in Ontario but you may end up in a legal dispute with other business. Also, you should consider registering trademarks to enjoy a better protection.
9. Quintessential documents
Depending on the type of business and the country, you may need regional or national permits and licence to operate. You may also be given a special business number, if you collect GST. Also check whether you are liable to pay taxes or credits.
Putting up a formal business plan help you identify all these key requirements. Its always better to use a professional business plan writing service so to make sure that all the key aspects of your business are taken care of.
10. Open a Business Bank Account
Seek the advice of a business bank specialist to open an account that is appropriate for your business. Banks in Canada have higher banking charges usually. Try to get in touch with your two or three banks and ask for special promos. If you do not write lot of checks in Canada, consider opening an E-Account with bank, one of such bank is Bank of Montreal. Get in touch with your local branch you might able to get free banking for first six months or a year for the paid packages as well. If you are eyeing on overseas trade, it is better to open an account in that country to save the charges on international transactions.
11. Accounting and Records
Bookkeeping and accounting are very important as well as proper record keeping and management. If you are starting a business you should consult a professional chartered accountant in Canada to understand your tax filing requirements. You can do regular bookkeeping yourself in the initial period though and get the tax prepared and filed by a reputable corporate tax accountant or personal tax preparation for businesses which are unincorporated.
Also invest in some accounting and record management system. Though putting up business and accounting systems are very important for a business but small businesses do not need to overspend in Information systems.
12. Hire Talent
Optimize your expenditures and recruit people who are skilled in a particular sector. Save your time and utilize your energy in another area that requires your attention. Outsource the talents that are not your domain of expertise and divide the workload.
13. Plan your Taxes
There are different taxes applicable on businesses including payroll taxes, sales tax (GST/PST/HST), income taxes.
Payroll Taxes – Handle them yourself. A certain percentage of your employees’ salary is for paying taxes. You may use payroll software to monitor employees or simply use payroll calculator from the Canada Revenue Agency.
Sales tax – You might be required to register mandatory. However, you can register voluntarily. If you are having simple transactions, you can check with your accountant one time and carry on the same practice. You can even file your own HST/GST return in Canada if you use a reasonable bookkeeping software. If you have issues like exports, providing services to other provinces in Canada, dealing with related parties or complicated transactions you are recommended to consult your business tax accountant who can help you navigating the maze of excise tax laws and rules.
Income Taxes – An unincorporated business such as sole proprietorship do not have complicated income tax issues as compared to corporations. In some cases, you can even prepare your own statement of business or professional activities yourself while doing your personal taxes in Canada. If you are operating a corporation, you are always recommended to get it done from a professional corporate tax accountant who specializes in Corporations income tax filing in Canada. If you have some more complicated tax issues, you should not avoid taking a professional tax advice! Complicated tax issues exist when you have non-resident shareholders or employees, presence in multiple provinces in Canada, cross border operations with US or any other country, or have investments in different other corporations etc.
14. Web Presence for your business
Whether you are a local florist or a small start up entrepreneur or a business tycoon, it is necessary for your company to have a website for the public to know your services and products. Social media and digital marketing are potential tools for skyrocketing your eminence.
15. Business Partnerships
You may enter into referrals, joint ventures or cross promotions if you and some other business group have the same idea in mind. You may ask other partners about their experience before entering into a partnership and check their veracity.
Leaving all the technical steps aside, an idea and a desire are the most essential requirements. Be bold and prepared for launching your business, being your boss.
Maroof HS CPA Professional Corporation provides comprehensive business planning, accounting and tax services in Canada. If you are planning to start a business in Canada you can take advantage of our business plan writing services for Canada to draw a complete road map for your business idea. We also handle all the tax related matters when it comes to income taxes, payroll taxes or GST/HST. Get in touch with us and let us help to convert your ideas into a successful brand.