How to start a business in Canada

6 min read
Curtis McHale

Many Canadians dream of starting a business, but few know how to start a business of their own. While it is a bit of work, it’s not as hard as many people think.

The 4 steps of starting a business

Today we’re going to go over the basics of what it takes to start a business. By the end of this post, you’ll understand the 4 essential steps.

  1. Find a niche and a name.
  2. Cover your legal bases.
  3. Fund your business.
  4. Get your first customer.

Now let’s walk through each step one by one.

1. Find a niche and a name

This first step is to decide what goods or services you’re going to provide. For many startups, this starts with a product or service that people are already asking for.

I started my business when I kept getting calls to build websites for people outside of work.

How to Start a Business Computer Programmer
If you’re getting calls to do side work for others, you’ve got a business to start.

A second way to approach finding your niche is to step back and take a look at the market. You can either take a look locally or in an industry. Either way, look for the things that people are complaining about and find a complaint you can solve.

Maybe local people can’t find a good clothing alteration service, and you’ve been making your clothes for years. You can test this idea out by putting basic alteration services on craigslist to see who is interested.

Naming your new business

The next thing to think about is a name for your business. This will appear on your Google My Business listing and social media profiles, so you want it to be memorable.

Start by listing four to five names that you like and that are distinctive in your market. Don’t get fancy with something that no one will be able to pronounce (or spell). Once you’ve chosen a winner, check Canada’s national name database to make sure it isn’t already registered to someone else.

If it isn’t, type or paste it into the domain search box here to see what you have to choose from. Register the one you like, even if you don’t plan to create a website just yet. You want to own the domain related to your business name so no one else can register it.

Already have a name? Check your domain name options now

Once you have a name, you’re ready to start covering your legal bases. This begins with choosing the proper structure for your business.

While going with sole proprietor is easier in the beginning, it can mean that you pay more taxes and have more liability if things go wrong. Your other options are partnership and incorporation — get details here.

You’ll also need to register your business and get a GST number from the government.

A GST number will allow you to charge taxes to your customers, and also write off the GST your business pays on its goods and services.

One of the final registrations you’ll need to make is with your local government in the form of a business license. This keeps you in good standing with your city and ensures that you don’t get a knock on your door with some bigger fine to follow. Even sole proprietors working in their homes should have business licenses.

3. Fund your business

How to Start a Business Person Estimating Costs
Depending on the business, you might be able to fund it yourself.

Another aspect you’ll need to look at is how you’re going to fund your business. If you’re running an online-first business, then maybe you already have the computer and software that you need. In that case, funding can be out of your pocket, and it won’t be that much.

For funding, there are two main routes.


Depending on the type of business, you could self-fund it out of money that you can generate. Maybe that means taking a second mortgage out on your house. Or perhaps you work extra for a year and build up a nice nest of savings to draw on as you start the business.
In my case, the replacement cost of my equipment is around $5000, so I keep that in savings just in case.

Outside funding

There are many government options for Canadian businesses when you’re looking for money to get the business going. Some of them are loans, which you’ll have to pay back, and some are grants that come with few (or no) strings attached.

There is also lots of support for many groups like:

  • Female entrepreneurs.
  • Immigrant business owners.
  • Indigenous entrepreneurs.

Before you take out a big loan, make sure you understand all the different programs you might qualify for.

Related: From crowdfunding to loans: how to find startup funding

4. Get your first customer

How to Start a Business Student Playing Piano
Talk to friends, family and colleagues to find your first clients.

The final step is to make your first sale as a new business. As I mentioned above, I love to see new business owners test out their ideas in the market in some small way before they take the plunge into starting a businesses for real.

My uncle refinished antique furniture on the weekends for years while working full-time.

Then he cut his work hours and started working at an antique market where he could show his wares. It was only after many years that he began to refinish furniture as his full-time job.

If you’re running an online business, make sure you’re getting as close to shaking hands as possible. That means, get on the phone with your customers. Use Skype or Zoom to do a video call; if they don’t have video, use audio. The more you can humanize yourself to your customers, the more likely they are to purchase from you.

For practical tips on getting that first customer — from emailing your personal network to bartering — read this terrific post.

How to start a business wrap-up

For me, starting a business gave me so much freedom. This week in the middle of a “work day” I played with my kids and made a stop by my daughter’s school to volunteer.

I’m able to do this now because I:

  • Took the time to understand where my market is.
  • Took care of the legal parts of my business.
  • Built an emergency fund so I don’t have to sweat when it’s a bit slow.
  • Tested out my services while I was still working full-time for a nonprofit.

If you can spend just a bit of time learning how to start a business and thinking strategically, you can launch on solid footing too.

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