FAQs
Frequently Asked Questions (FAQ)
Below are the answers to some of the frequent questions people have asked us when starting and growing a business. This list is a great start to some of those questions however, if you have additional questions, or would like to talk to an advisor in person, please give us a call at The Business Advisory Centre Durham (905) 668.4949 or send us an email via clientservices@bacd.ca
Starting a Business
BACD (Business Advisory Centre of Durham) is here to help you get the skills, knowledge, tools, structure, guidance to navigate the steps to starting and growing your own business. When you have the knowledge you need, the quicker you can start or grow your business and create success for yourself.
Our advising services are free of charge to you. You can meet with us until you feel comfortable moving forward on your own. We also help you review current progress and plan for the future. We love helping you create plans and goals that you can reach!
BACD also manages two entrepreneurship programs called Summer Company and Starter Company.
Give us a call to book a meeting with an advisor (905) 668-4949 Monday – Friday 8:30am-4:30pm
Starting a business is easy – register a business name and you’re ready to go, but starting a successful business takes a bit more effort.
Over the years we’ve found most successful business owners have followed these simple steps.
Steps In Starting A Successful Business:
- Get an idea
- Determine if the idea is viable
- Research consumer, competition, market & industry
- Develop a business plan
- Arrange financing
- Obtain necessary registrations, licenses, permits and insurance
- Implement your business plan = Open for business!
After you’ve decided what type of business you are going to register (Sole Proprietorship, Partnership or Incorporation), you need to register your business legally. “Registering” a business most often refers to registering the name of a business and getting a Master Business License. Under the Business Names Act of Ontario, businesses must register their business name. Individuals using their own name e.g. Jane Smith to carry on business do not have to register until a word is added to their own name e.g. Jane Smith Catering. Visit Business Name Registration Information for more details.
A Business License may be required for some businesses in order to operate in Ontario. This is in addition to the business name registration. For example, “JS Automotive” is required to register its business name and obtain a license in order to operate as a garage. To determine if your business will be affected by local regulations, licenses, municipal business tax or zoning requirements contact the by-law department of the municipality where your business will be located. Use the BizPal web site to access business licenses and permits information online.
You can register your business name online at the Ontario Business Services website. The fee for online registration is $60, plus $8 if you include the optional name search. It takes about 30 minutes to complete your registration. When you are finished you will immediately receive a Master Business License (MBL) to print on your own. You can only pay by credit card for the online services.
Free, self-service public computers are available at select Service Ontario locations where you can register a business name. The cost is $60, plus $8 if you include the optional name search. Business name searches and registrations are processed immediately and print them for your records when you are finished. At the Service Ontario locations you can pay by cash, debit or credit card.
Your Master Business License is valid for 5 years after which you go to the above link and renew your license. To change or cancel your Master Business License or any of your business information visit this link here.
In the Region of Durham visit:
ServiceOntario 590 Rossland Road East, Whitby L1N 9G5
+1(800)267-8097 Hours: Monday – Friday 8:30am – 5:00pm
Alternatively, BACD can walk you through your registration in our offices from Monday – Friday 8:30am – 4:30pm for a service fee of $25.00
Most businesses that operate in Ontario and have annual sales (revenues), totalling more than $30,000 must register for and charge HST. If your total annual sales are less than or equal to $30,000, you are considered to be a small supplier and are not required to register and charge HST. Depending on the nature of your business you may still choose to register as you will be able to claim input tax credits (ITCs) to recover the GST/HST you pay or owe on your business purchases. You may also find that some clients may only do business with businesses registered for HST.
When you register for HST you are given a unique Business Number (BN). If you have not obtained a BN, you do not charge HST. Once you have registered you have to remit at the required intervals even if you have zero sales.
For further information, visit the CRA web site: Should I Register for HST? or call +1(800)9595525
A business plan is a written document that describes your business, its goals & objectives, your target market and financial requirements. A business plan helps you map out your mission and vision for your business. Preparing a business plan will also help you focus on how to operate your new business and give it the best chance for success. A business plan is most often expected when applying for loans or grants. Check out the Resource Library Business Planning Section.
The easiest way is to use a template (see next question). Start by defining your business objectives; think about who is going to read the plan. Your objectives can help you decide how much emphasis to put on various sections of your plan. You will need to do some research in order to find out more about your industry, potential customers, competitors, sales and costs of doing business. A business plan is only as good as the research that went into producing it.
A traditional business plan will have eight key sections, including:
- Executive Summary
- Identify Opportunities
- Market Research
- Marketing and Sales
- Your Team
- Financial Forecasts
- Implementation Plan
- Appendices
Business Plan resources & templates:
There are two types of market research that a small business should conduct; primary and secondary research. Primary research is the method of conducting 1st-hand research by interacting with consumers and businesses that your small business intends on selling to. The most common way of performing primary research is to use a survey. You can either prepare survey to physically handout to your target market or utilize a free online service called Survey Monkey to deliver the survey to your contacts.
Secondary research is the method of collecting pre-existing data from different sources such as demographics, business listings and industry data. Your local library has many different reference resources that you can use like Scott’s Directory,Reference Group, Financial Post and P-Census. Also check out Canada Business for online resources and call them at +1(888)745-8888
The simple answer to this question is “it depends.”
What business structure you choose will depend on many factors and there are no simple rules for selecting which will be right for your business. Some questions to consider include:
- How many people are involved with the business?
- Are there outside investors?
- Do you have any personal assets you wish to keep separate from the business?
- Do you want to limit your liability?
- How much profit is the business expected to generate?
- How much do you wish as a salary?
- Will you be re-investing profits in the business, or do you want to take all profits as personal salary?
- What is your budget for registration?
- Are you prepared to pay the additional accounting fees required by corporations?
You have to investigate the different options and decide what makes the most sense for your business. An accountant and a lawyer can help you make an informed decision. See our BACD Expert Network and Choosing Business Structure.
Federal incorporation gives your business increased business name protection and wider rights to conduct business. You may also opt for federal incorporation if you plan on conducting operations in multiple provinces.
The downsides to federal incorporation are extra paperwork, and additional costs to register the federal entity in every province where you conduct physical operations.
For more info please see Corporations Canada Frequently Asked Questions
You have two options to protect a business name:
- Register the business as a corporation. You can either Provincially register your corporation or Federally register your corporation. If the corporation is a provincial corporation, the name will only be protected at the provincial level. If the corporation is a federal corporation, the name will be protected at the national level.
- Register the business name as a trademark. For more information on trademarking, visit Canadian Intellectual Property Office
Your first stop should be BizPal to find out what licenses and permits may be required to operate your business in your municipality.
Visit the Canada Business Network for general information on regulated business activities and regulated industries.
While there has been a reduction in the number of grants available to general business start-up in the past few years, there are some monies available. Most programs are targeted strictly to specific industries, geographical areas or particular groups of entrepreneurs (minority groups, youth, employment insurance recipients, etc.) To search the programs available in Ontario, visit our page on Grants & Funding.
In the early stages, the most important financial sources will probably be you, friends, relatives and financial institutions.
The most common source of financing for small businesses is the chartered bank. Banks can provide a number of financing options, such as short-term loans, long-term mortgage loans and, in some cases, loans against inventory or accounts receivable. Other important sources of financing in this category include trust companies and credit unions.
For very small firms and home-based businesses, credit cards, home equity and lines of credit often provide a ready means of obtaining small-scale debt capital. While convenient, they bear relatively high rates of interest and limit the amount of capital available.
Each situation is different, and it is critical that a good business plan be developed to determine the overall needs of the business. For more information visit our page on Grants & Funding.
The Government of Ontario is making efforts to ensure that there are support programs for our young entrepreneurs to start small businesses in their community. For those ages 15 – 29, in school and returning to school in the fall, Summer Company provides up to a $3,000 award and mentorship for participants to run a summer business. Click here to find out more information about the Summer Company program
For those ages 18 – 39, Futurpreneur partnered with the Business Development Bank of Canada, provides up to $6-0,000 in financing (repaid over 5 years) and 2 – 3 years of mentorship. This amazing program is great for businesses with a higher start-up cost. Please visit Futurpreneur for application and more details – please select BACD as your local community partner so that we can assist you with your application and business plan.
Through the BACD’s Expert Network service network, you can connect with accountants, lawyers, web and marketing experts for one-on-one consultations on business related issues.
If you have narrowed down the industry in which you’d like to start a business, reading related book, periodicals and blogs can help you generate ideas. If you haven’t narrowed down your industry yet, you can check out trendhunter.com and trendwatching.com for emerging global trends, as well as springwise.com, the Business Opportunities Weblog and Entrepreneur magazine’s Business Idea Center list for business ideas.
Statistics are important if you are thinking of starting a business. Getting an outside view of the market you plan to enter is essential for improving your chances of business success. A good resource for this type of information is our Market Research Resource Section or our checklist Resources for Market Research and your local Library.
Yes! If you are designing or have a concept for a new invention, your best strategy is to look at your invention as if you were creating a business. There are various supports that you can access to help you with the process of developing and bringing your product to market. By connecting with your local Research Innovation Centre (RIC), you will be able to consult with experts and acquire contacts to streamline your development and to-market process. For inventors in the Region of Durham, contact the Spark Centre.
The Canadian Intellectual Property Office offers information regarding patents, trademarks and copyrights as well as the applications to begin these respective registrations.
If confidentiality is a concern, feel free to create a Non-Disclosure Agreement (NDA) for people to sign before you speak to them about your concepts. Make sure you reach out for assistance and do not be afraid to talk to people about your idea; just make sure you are talking to the right people and protecting yourself and your concepts.
Growing a Business
Through the BACD’s Expert Network you can connect with accountants, lawyers, web and marketing experts for one-on-one consultations on business related issues.
Everywhere! The Business Advisory Centre Durham (BACD) hosts a number of events on our calendar that are opportunities for you to network. There are many organizations in the Region of Durham that host Networking events. Check out our section on Networking Resources.
Operations
You have two options to protect a business name:
- Register the business as a corporation. You can either Provincially register your corporation or Federally register your corporation. If the corporation is a provincial corporation, the name will only be protected at the provincial level. If the corporation is a federal corporation, the name will be protected at the national level.
- Register the business name as a trademark. For more information on trademarking, visit Canadian Intellectual Property Office
Your first stop should be BizPal to find out what licenses and permits may be required to operate your business in your municipality.
Visit the Canada Business Network for general information on regulated business activities and regulated industries.
While there has been a reduction in the number of grants available to general business start-up in the past few years, there are some monies available. Most programs are targeted strictly to specific industries, geographical areas or particular groups of entrepreneurs (minority groups, youth, employment insurance recipients, etc.) To search the programs available in Ontario, visit our page on Grants & Funding.
In the early stages, the most important financial sources will probably be you, friends, relatives and financial institutions.
The most common source of financing for small businesses is the chartered bank. Banks can provide a number of financing options, such as short-term loans, long-term mortgage loans and, in some cases, loans against inventory or accounts receivable. Other important sources of financing in this category include trust companies and credit unions.
For very small firms and home-based businesses, credit cards, home equity and lines of credit often provide a ready means of obtaining small-scale debt capital. While convenient, they bear relatively high rates of interest and limit the amount of capital available.
Each situation is different, and it is critical that a good business plan be developed to determine the overall needs of the business. For more information visit our page on Grants & Funding.
If you run your business from home, your homeowners’ or tenants’ insurance may not cover the portion of space you use for business. There are several types of insurance for business:
- Loss of physical assets
- Liability to a third party
- Business interruption
- Loss/illness of key staff
- WSIB
You may want to insure against any or all of these situations. Speak with an insurance company or a broker about your particular needs. Check out our Expert Network for insurance brokers. As well, many trade and networking associations offer group insurance plans to their members such as Chambers of Commerce and Boards of Trade etc.
You can generally deduct business expenses – if they are incurred to produce income. If you claim expenses, you must be able to back up your claim. You do this by keeping records of all your business-related expenses and recording the expenses in a journal or excel. Examples of expenses you can deduct:
- Accounting/Legal Fees
- Advertising Expenses
- Professional Fees And Dues
- License Costs
- Interest And Bank Charges
- Meals And Entertainment
- Maintenance, Repairs And Vehicle Expenses
- Use Of A Workspace In Your Home
- Inventory And Costs Of Goods Sold
Related information is available at the Canada Business web site. See also the CRA’s Business and Professional Income T2125 tax guide.
Depending on the nature of your business activities, a commercial space may be required to operate. However, committing to a commercial space increases the risk of your small business significantly as your operating costs will become substantially higher. Do your research! What benefits does the commercial space offer? What expenses will you be incurring (ex, monthly rent, TMI, renovating, utilities, signage, etc.)? Make sure you contact your local municipality to ensure the potential space is zoned for your type of business activities. Ask if you are able to run your business from your home.
If you decide on pursuing a commercial space, make sure to be in contact with your municipality/city economic development department and contact a commercial real estate agent. Be sure to understand the leasing agreements and thoroughly inspect the potential spaces for any damage or maintenance that the landlord should take note of. By taking your time and having good judgment, a commercial space can help you grow your business!
No matter what industry your small business operates in, you need to have a variety of payment options for your customers. Make sure to talk to the bank in which you opened your business bank account for information on debit/credit terminals and cash register suppliers; different banks are partnered with different terminal service providers. Many small business owners are switching to mobile terminal options, in which your smartphone becomes a transaction terminal. Some of the most popular services are Paypal, Stripe or Square, which is able to process credit card transactions using your smartphone and data plan. Alternatively, many associations and local Chamber of Commerce/Boards of Trade also have relationships with payment processors.
If you have a website that you sell your product or service from, make sure you have a secure e-commerce structure built-in to ensure the safety of sensitive information and stability during transactions.
Tax information for eCommerce sellers
To know which GST/HST rate to charge, a supplier has to know what type of supply they are making and where the supply is being made. The place where a supply is made is referred to as the place of supply.
Human Resources
You can find information about employment standards act at Ministry of Labour
+1(800)531-5551 as well as the Canada Business Network. They provide hiring and termination guidelines, information about minimum wage, vacation entitlement, break schedules, overtime, and much more.
Most businesses in Ontario that employ workers are covered by the WSIB. If you are in the construction industry, it is mandatory to be insured through WSIB. Under new legislation, independent operators, sole proprietors, some partners in a partnership and some executive officers who work in construction will also be required to have WSIB coverage starting in 2013.
Call the WSIB – Monday to Friday, 7:30 a.m. to 5:00 p.m.
Toronto:
+1(416)344-1000
Toll Free: +1(800)387-0750
You will also need to set up a payroll deduction account under your Business Number with Canada Revenue Agency. A payroll deduction account is where you – the employer – deposit all the E.I., CPP and income tax deductions you collect from payroll.
Here are the basic steps for hiring a new employee:
- Determine your needs – Do you need an admin assistant? A salesperson? A marketing manager? A social media guru?
- Write a detailed job description
- Post the job where you think you’ll attract the best possible candidates
- Shortlist the applicants
- Interview the applicants
- Select the successful candidate
- Onboard your new employee with training and orientation
- You may want to have an employment recruiting or temp agency help you with this process.
The actual hiring process is very important – you don’t want to make costly hiring mistakes. If a new hire does turn out to be a poor fit, it’s in the best interest of both you and the new employee to terminate.
Congratulations! Your business is growing – new customers, new assignments – things are looking pretty good. But how are you going to get this all done? You wish there were more than 24 hours in a day but there aren’t. You know you need to bring someone on board to handle this extra work but should it be an employee or a subcontractor? More and more businesses are hiring subcontractors instead of employees for several reasons:
- No CPP, EI or other benefits to be paid;
- There is no severance to be paid if the person is not suitable;
- Less payroll administration is required;
- Some prefer to be a subcontractor in order to claim additional expenses
Revenue Canada has a keen interest in this issue as it affects the government’s cash flow in terms of taxes, CPP and EI collected. So, when does Revenue Canada consider a subcontractor an employee? It depends upon the facts. See Canada Revenue publication “Employee or Self Employed“
It is important to determine whether a worker is an employee or self-employed. However, over time the following tests have been developed by the courts to settle this issue:
- The Organization Test – is this person going to be part of the organization and act like an employee?
- The Control Test – will you determine what, how and when this person will do the work?
- The Specific Results Test – will the person be asked to provide a variety of services on an ongoing basis versus performing a specific task with a specific completion objective?
- The Economic Results Test – will you provide the tools? Are you taking all of the financial risk and accepting liability for the work?
If you answered yes to any of the above questions, then the person you are looking to bring on board may be an employee and not a subcontractor. Not getting it right could have financial penalties for you as the employer. If there is any doubt, it is worth your time and money to consult with an accountant or lawyer.
Beginning in January 2011, self-employed Canadians will be able to access Employment Insurance (EI) special benefits. There are four types of EI special benefits:
- Maternity benefits;
- Parental benefits;
- Sickness benefits; and
- Compassionate care benefits
For more information on these benefits, please visit this page.
Information on:
- Rights of employees
- How to tell who is an employee
- How to tell who is an independent contractor
- Employee or independent contractor: Common misconceptions
- Volunteers
- Interns
For more information, visit this page
Closing a Business
If you’ve registered your business and you decide to close it, you’ll have to file required notices. See Canada Business Network for more information.
Yes, you must update the Government on your business plans. To learn more about how to do so and the importance to doing this, please visit https://www.buscoi.serviceontario.ca/cobi/ClientConsent.jsp.
Miscellaneaous
Canada Border Services Agency has excellent information and checklists on Importing and Exporting as well as the Canada Revenue Agency.
CBSA Import checklist, CBSA Export Checklist and CRA HST Rules on Import/Export
The Canada Tariff Finder is a free tool that allows Canadian exporters to check the tariffs applicable to a specific good in a foreign market. The focus is on countries where Canada has a Free Trade Agreement (FTA) in place. Click Here to read more
