How much does it cost to start a business in 2024?

LaunchCategory
18 min read
Art Martori

Starting a business in Canada needn’t be overwhelming. Oh, I get it, there’s a lot to think about: 

  • Can you afford it? 
  • Will the business sustain you? 
  • If this is a side hustle, how will you juggle it alongside your life commitments — maybe even a full-time job? 
  • Exactly how much does it cost to start a business? 

No doubt there’s a lot to think about, but the more you think, the more reasons you’ll find not to follow your dreams. That’s the last thing I want for you. 

So, instead of overthinking, read through this comprehensive guide that includes a breakdown of small business costs, plus tips to manage those costs at every step.  

Related: How to make money starting a doggie daycare 

Fixed costs to start a business in 2024 

The fixed costs of your business start-up will depend on the type of business. As a freelancer you can start a business for $0, assuming you already own a PC and have access to Wi-Fi. 

Businesses that have more complex production processes or digital assets may need to spend more. 

The cost of your business will be unique, but you can use the guides below to determine how much it costs to start your dream business in 2024. 

Domain, website or online store 

Most small businesses need a website either to: 

  • Trade and receive enquiries online or 
  • Show up in Google search and Google maps for local searches 

That said, if you’re starting a service-based business, you may be able to drum up business without a website and associated hosting costs by using social media platforms like LinkedIn. 

vendre créations sur internet

This would keep your start-up costs at $0.

Crafters looking to save on the ongoing hosting costs of a website can create an ecommerce store on Etsy and pay minimal fees to upload products. Then, you just pay a commission on sales. 

Alternatively, you can start affiliate marketing on TikTok, which costs nothing to set up. 

While free alternatives are great, if you’re lucky your business will likely grow to a point where you want a more robust online presence. At that point, you’ll need technology that allows you to accept online payments. 

The first step is to get a domain name. This will serve as the web address for your website or online store. 

In general, domain names cost between $2 to $20, depending on the deal you are getting and the number of years you decide to register the domain for. 

Check if the domain you want is available now! 

Tips for managing the cost of domains: you can cut costs by exploring cheaper domain suffixes. Generally, but not always, .com will be more expensive than .ca, .shop or .co. There’s even .quebec perfect for businesses located there! 

Having a web address that ends in .ca identifies you as a Canadian business. In fact,  some Canadian shoppers may prefer doing business with you over a .com website. 

A .ca domain also says your prices will be in Canadian dollars. 

There are a lot of domain options so spend some time exploring suffixes and pricing. Browse the full list here. 

Web hosting is required to get your site or online store on the internet and in front of customers. For this, you’ll need to get a web hosting plan OR a website builder that comes with hosting. 

Tips for managing the cost of hosting: Pay annually or for years in advance to save money. Note that website builders like GoDaddy’s have hosting built in. 

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Website design and development 

For those who want a website, you can use an easy site builder like GoDaddy’s, which is free. This is perfect if you don’t intend to sell a lot of products online and really want to cut costs. 

Person building a website on their laptop

I promise it’s easy and you might surprise yourself! 

If you think you’ll be selling a number of products, check out GoDaddy’s Online Store builder. 

Not willing to create a website yourself? Don’t fret — there are affordable website design services that can deliver a website that you (and your customers) will love. 

Tips for managing the cost of your website design and build: 

If you want to save costs, commit a couple of hours to creating a website with GoDaddy’s site builder. Unless you expect to sell dozens of products, it’s free.  

If your offerings expand in the future, you simply upgrade to an Online Store plan. 

While you’re at it, consider creating a logo to display on your web pages and other business materials (e.g., email, shop window, van, etc.). 

Tools like GoDaddy Logo Maker are free and help you quickly nail this key piece of branding. 

Considering building your own website with WordPress? Read this post to decide if you should try it or opt for an all-in-one site builder. 

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In Canada, there are three different types of businesses, each with their own costs:  

Sole Proprietorship: With a sole proprietorship, you’re responsible for your company’s debts, as well as its profits. 

This is the easiest type of business to create.

Mechanic checking the oil in a car

You’ll need to register your business in the province in which you do business. Any income you make is added to your other sources of income, and you can deduct the portion of your home, car and technology expenses that you use for business. This will cost you under $100, although it varies by Province. 

Costs may include a government fee and a service fee; they vary from Province to Province. 

Partnership: This is similar to a sole proprietorship, but there are two or more partners in the business.

The plus is that you’re able to share start-up costs and each partner can focus on his or her area of expertise. However, it can be difficult if the two partners decide to part ways. 

As with a sole proprietorship, costs vary from Province to Province. Look yours up at the link above. 

Corporation: Incorporating your business makes it a legal entity, separate from you. Incorporating your business removes you from personal liability. So, if your business fails, your personal assets will be protected. 

There may be additional perks to this structure in terms of funding, loans and tax advantages.   

Incorporating in Canada can run you between $200-1000, depending on whether you do it yourself, or hire a lawyer.  

Don't forget the business licence 

If you live outside of a larger urban centre, you may not need a business licence if you operate a small, home-based business.  

But if you live in the city, you may be required to get one. Requirements for a business permits or licence vary by industry and location.  

Tips for managing legal costs: Focus on the essentials. As a new business owner, it can be tempting to cover your business from every angle, but that may not be required at the very beginning. Consider what’s a must-have to start, then take note of what you can purchase later and when it’s needed. 

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Promoting your business 

Marketing is one of the most flexible costs when starting a business. 

The good thing about marketing is that you can do a lot of it yourself. 

If you choose to work with a company like GoDaddy, you can have access to the following services: 

Content & Photo Creator Free 
Instant Video Editor Free 
GoDaddy Studio Creation Tool allowing you to use ready-to-edit templates to create website, social media and advertising content $11.99/month* 
SEO (search engine optimisation) Services Call 1-866-938-1119 for a free consultation 

GoDaddy covers all the bases with Digital Marketing Suite. You can create and manage your business listings, social media posts, email marketing and your business reviews — all from one dashboard. 

If you’re happy to manage social media platforms at first, you can do well without spending a cent. However, it is time-consuming, so that time investment must be considered. 

If you’re thinking about marketing your business with ads, then you need to consider the cost of the ads versus the benefits. 

Generally, it’s not useful to start with a budget that’s too small simply because you won’t get the data you need to decipher a good ad campaign from a bad one. 

Don’t start an ad campaign until you’re ready to commit. 

User interface designers working together at a table

Tips for managing your marketing costs: 

Choose your marketing channels carefully. Do your research to find out which ones are likely to have the biggest impact. It’s better to cover two channels well than many channels poorly. After all, you can always scale once you’ve nailed one platform. 

Related: A beginner’s guide to online advertising  

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Variable costs to start a business in 2024 

Some prices are incredibly variable depending on your location and the needs of your business. These items are listed below. 

Physical location 

The beauty of starting a business today is that many businesses won’t need a physical location. But if you’re opening a brick-and-mortar store or plan to work in an office, then you’ll need to think about rent or mortgages. 

Products or inventory 

Vindemia winery bottles on a conveyor belt

If you need to buy and hold stock, you’ll need to outlay an initial investment upfront. The cost will vary depending on the products. You can manage these costs by thinking carefully about what you’re likely to sell.  

You could explore buying stock in bulk, but then you'll need to pay for the space to store your items. 

Tips for managing your product and inventory costs: 

Ask suppliers about their minimum order quantity (MOQ) and how their costs vary based on quantity. Also, consider drop shipping — with this business model, you don’t manage inventory at all. You simply promote and sell products that are then shipped by another company directly to your buyers. 

Staff 

Staff costs depend on seniority and location.  

The current federal minimum wage is $16.65 per hour 

This applies in all Provinces where the worker is doing a Federally regulated job. These industries include: 

  • Transportation 
  • Banking  
  • Government jobs 

Beyond that, minimum wages vary by Province, with Saskatchewan being the lowest at $14 per hour (this will increase in 2024). In Ontario and up north, you can expect to pay your employees a minimum of $16+ per hour. Minimum wages for students may be slightly lower.  

Tips for managing staffing costs: Businesses trading online can outsource work to talented freelancers either locally or in different parts of the world. You can also take on more work yourself or turn to software and AI to support your business. 

Related: The essential small business guide to AI 

Taxes 

Beyond the initial registration, small businesses need to consider tax. You will need to pay taxes on any self-employment income you make. The good

news is, you can write off any business expenses that you require to run your business, bringing the amount of taxes you have to pay down, as well.  

Paying your taxes usually means: 

  • Putting a percentage of your income aside to cover the costs, monitoring and recording your expenses to account correctly for tax write-offs OR  
  • Hiring an accountant to manage taxes for you 
Couple talking

GST and PST/HST 

The Goods and services tax (GST) is the 5% federal tax applied to most businesses. There are some exceptions, so be sure to do the research on your industry.  

You are not required to collect GST until you earn $30,000 of self-employment income in one calendar year.

You can register and get your GST number if you make less than $30,000 per year, but then you are required to collect the GST and pay it back to the government. It’s optional at under $30,000, but not optional once you reach that threshold.  

PST rates  

These rates vary by Province. Provincial Sales Tax (PST) is added to many physical goods, whereas GST can be for goods or services.  

Some provinces charge separate GST and PST (PST rates vary from 0% in Alberta to 7% in BC and Manitoba, to nearly 10% in Quebec). 

HST rates 

Five Canadian Provinces have HST, or Harmonized Sales Tax, which is a combination of the GST and PST together.  

These Provinces include all the Maritime Provinces, and Ontario. HST rates vary by Province but are between 13 and 15%.  

Be sure to know what tax structure applies to your Province and how you can submit your remittance before starting up to avoid fines.  

Tips for managing tax costs: The more efficient you are, the less you will need to pay an accountant. You may want to invest in a tax software program to keep track of income and expenses.

Here is a list of software programs that integrate with the CRA.

Many small business owners can manage the early tax returns alone, but a growing business will likely need an accountant eventually. Manage the costs by putting money aside regularly so you’re never surprised. 

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On-going expenses 

As a small business, you’re likely to have ongoing expenses. For example, you may not start with them but over time you’ll likely need subscriptions or software. 

Or, you might have postage to consider for e-commerce. 

Your costs will vary based on how busy you are. 

Tips for managing your ongoing expenses: 

On-going expenses can creep up, so be mindful of monthly subscriptions and any software that you may have purchased. If you’re not using them all, you’re throwing away money. 
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Unexpected costs 

Any business is likely to be hit with an unexpected cost eventually. Prepare for the unexpected by budgeting for it to get you out of an emergency.  

Unexpected costs could include your sickness, the need to hire a consultant to solve a problem fast or if you’re in a brick-and-mortar store, something could go wrong within the building. 

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How to fund your start-up or small business 

Getting funding for your new business is likely to be on your mind. Here are some common ways to find funding for your start-up. 

Personal investment 

Funding your business on your own can be a safe option. It removes the stress of meeting investor expectations. It can also feel really good to know you built your new business with your own means. 

That personal investment may require you to save for a few years before you get started or keep your day job during the first year or two. But having freedom from stakeholders can pay off by giving you complete control of your business. 

Borrowing money through your contacts 

Of course, you can ask to borrow money from your personal contacts, friends and family. If you choose to go down this route, it’s really important to treat the funds the same as a formal investment: 

  • Draw up contracts 
  • Separate your personal and business conversations 
  • Be very clear on the terms of the contract 

Loans 

Small Business Owner Applying for a Loan

Getting a loan from a bank is another option for funding. Generally, banks provide calculators on their websites so you can gauge what you might be able to borrow. 

It isn’t easy to get accepted for a bank loan. Half of small businesses in Canada fail within 5 years, so banks are naturally careful who they lend money to. 

You can improve your chances of a bank loan with a well-crafted business plan — you can learn how to create one here. 

But there is financial assistance for small businesses. 

The Canada Small Business Financing Program, is a federal program that offers loans and grants to small business start-ups.  

Each Province also has their own supports for small businesses, like Small Business Centres Ontario or SSBC in British Columbia. Loans and financing are also available through BDC 

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Create a budget for your first year 

Let’s take a look at cost summaries for two types of businesses. 

Freelance business 

A freelance service-based business is one of the cheapest businesses to start. Costs might look a bit like this: 

Expense Cost Notes 
Laptop $0 Freelancers can start with any computer they have access to. 
Internet $0 Those working from home don’t need to worry about additional costs for Wi-Fi. 
Social media & blog posts $0 Organic posts don’t cost anything and can generate leads and clients. 
Total: $0  

Service-based business 

Those starting a service-based business who want to look professional should consider a website. 

Here’s what the cost summary can look like: 

Expense Cost Notes 
Domain $1.35 (first year)* Use suffixes like .store to reach that $1.35 cost. 
Create a website yourself $0 Get creative and build your own site with GoDaddy. 
Website design services $625 and up Optionally hire someone to build it for you. 
Web hosting From $373.75 for two years* Get a discount on your first year of hosting. 

Related: How much does it cost to build a website in Canada?  

Marketing costs for the first year 

With GoDaddy Studio, many options like logo design, social media templates, and social video editing are free.  

 

DIY 

Pay someone else 

A professional logo 

Free with GoDaddy Studio 

$300-3000 

A website 

Free with GoDaddy Website Builder 

Brochure website: $400-1000 

Ecommerce website: $1000-5000 

Freelance graphic design 

Free with GoDaddy Studio $40-65/hr 

Package design 

Check out Figma or Pacdora 

$2,500-15,000 

Social media  

Free with GoDaddy Studio 

$600-2,000/month  

Blog posts 

Free if you DIY 

$15-35/hr 

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Businesses you can start with a small budget 

The web has opened a world of opportunity when it comes to starting a business for free or with a small budget.

Assuming you’ve got a PC, Wi-Fi and a willingness to use social media to generate leads, you can start any of the following small business ideas for free: 

  • Freelancing in digital services like writing, SEO, PPC (pay per click advertising), social media management or email marketing. 
  • Freelancing on platforms like Upwork or Fiverr. 
  • Affiliate marketing through social media platforms like TikTok. You will need to gain 1,000 followers before you start making money from this. 
  • Consulting in a skill you already have (or can learn for free online).
Woman in torn jeans walking five dogs

Local services you can start with little to no start-up costs:

  • Dog walking 
  • Babysitting 
  • House sitting 
  • Handyman 
  • Tutoring 

Some businesses require a small budget to start. For example: 

  • Selling digital downloads on Etsy. You’ll pay a small fee to upload products, but then nothing until you make your first sale when you will pay a percentage to Etsy. 
  • Drop shipping 
  • Selling on eBay 
  • Printing (assuming you’re doing the printing) 

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Closing thoughts on starting a business in 2024 

There are a lot of resources and technology that can make starting a business easier. 

For example, learning how to write a business plan (with help from tools like ChatGPT) can easily jump-start your journey. You can also use this business plan template. 

And while there might be expenses associated with starting a business, don’t forget the financial rewards that come with a successful venture. Keep that momentum going and make this the year you start a business to be proud of. 

*Pricing data valid as of November 2023. All prices listed are subject to change. 

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