Starting a business in Canada is an exciting project with its share of challenges.
Despite the difficulties of starting a business, thousands of people do it every year, and most of them succeed.
Did you know that 67.9% of new companies in Canada are still in business 5 years after their creation? This statistic is reassuring!
Of course, the process of starting a business is different for everyone. What’s certain is that most entrepreneurs work in iterations, fine-tuning their ideas.
However, there are several essential steps to take to ensure the success of your project.
6 Essential Steps to Start a Business in Canada
This is it. You’ve got an idea for a product or service and you’re ready to begin your entrepreneurial journey.
Here are the essential steps to follow to make your project a reality.
1. Evaluate Your Idea
Failure to carry out market research before launching a business is one of the most common reasons for the failure of an entrepreneurial project.
Market research is therefore an essential step in evaluating your business project. It will enable you to better understand who your future customers will be, to adapt your offer to their needs and to better position yourself against the competition.
The benefits of conducting market research include:
- Offer better products and services
- Develop sales strategies better adapted to your customers
- Inspire new ideas or ways of doing things
- Identify your competition
- Gain a better understanding of your target clientele
- Quantify the real demand for your products or services
- Minimize risks
- Better plan costs
What are the steps involved in market research?
The steps involved in conducting market research include:
- Market definition: who are your competitors, who is your target clientele, who are the most common suppliers, how to distribute your products, etc.
- Demand analysis: how big is the market, what problem are you addressing, what are the disincentives to purchase, what are the shortcomings of solutions or products already on the market, etc.
- Supply analysis: which companies are already on the market, what prices are offered, what marketing strategies are employed, where are competitors located, etc.
- Environmental analysis: what is the economic context, what laws and regulations are in force, what technologies are most widely used, etc.
To gather this information, you can, for example:
- Search the Internet
- Consult local, regional and national statistics
- Conduct surveys
- Interview potential customers or competitors
- Consult your local chamber of commerce
- Ask for help from organizations that support entrepreneurs
- Contact companies directly to ask questions
- Etc.
Market research is therefore an essential tool for making strategic decisions, developing a relevant value proposition and increasing your company’s chances of long-term success.
2. Draw Up a Solid Business Plan
Taking the time to think about your business plan and putting it down on paper is essential for structuring and clarifying your vision. This will give you the best chance of getting your business off to a good start.
Developing a solid business plan allows you to:
- Clarify your vision and objectives in the short, medium and long term
- Determine the viability of your project
- Have a clear plan of action
- Demonstrate the project’s profitability and potential
- Anticipate risks and opportunities
- Facilitate project coordination with your business partners if necessary.
Essential elements to include in your business plan
- Executive summary: to provide an overview.
- A description of the business: legal structure (franchise, independent business, purchase of an existing business), sector of activity, mission, values, objectives, etc.
- Market study: to demonstrate your understanding of the market.
- Description of products or services offered: added value for customers, competitive advantages, points of differentiation from competitors, etc.
- A marketing plan and sales strategy.
- An operations plan: description of potential suppliers, production processes, logistics, etc.
- Team presentation: role and experience of each team member.
- A financial plan: forecasts, budget, operating costs.
- SWOT analysis (strengths, weaknesses, opportunities, threats).
Your business plan will enable you to make more informed decisions and better develop your company. The more detail you provide, the clearer your project will be.
3. Secure Financing for Your Project
Financing your business project is crucial to its success. While some people are able to start a business with no money (selling personal services), some business ideas require more capital at their disposal (a store or restaurant).
There are many financing options available to you. For example, you can:
- Invest your own money
- Apply for a bank loan
- Find investors
- Carry out a fund-raising campaign (also known as participatory financing)
- Receive a grant
The financial assistance available to you may differ greatly depending on the region in which you want to operate.
It’s important to quickly identify how you’re going to finance your project, to ensure that your financial means are commensurate with your ambitions.
4. Create Your Company’s DNA
Your company’s brand image, mission and values guide the strategies you adopt. These elements will also help to create a better connection between you and your customers.
A company’s mission defines its “why”—its purpose and core objective. It provides clear direction to the entire team and helps better align strategic decisions.
A company’s values are the principles on which its activities are based. They reflect the vision of the company’s leaders or founders. They also help reinforce the company’s culture and set it apart from the competition.
A few questions to ask yourself to determine your company’s mission and values:
- What is the company’s ultimate goal?
- What are your customers’ specific needs?
- What are your long-term ambitions?
- What beliefs guide your choices?
- What values would you like your employees to embody?
Your company’s brand image will enable your customers to quickly identify you and set you apart from the competition. It includes the name and logo, but also the visual design and all the elements that communicate the essence of your organization (product packaging, office decor, uniforms, website, etc.).
A clear, well-established brand image makes your project more coherent, and builds credibility and trust with customers.
How do you create your corporate image?
- Define your visual identity: logo, colors, typography, etc;
- Determine the tone and style of communication: on social networks, on the website, in your advertising, etc;
- Create a memorable customer experience: customer service style, warranty and return policy, marketing strategy, etc.
These elements not only define what the company is today, but also set the course for its future and establish a solid foundation for sustainable growth.
5. Draw Up a Communication Plan and Marketing Strategy
To make yourself known, you need a communication plan and a marketing strategy.
The communication plan
The communication plan is a document that outlines a company’s communication strategies according to the messages it wishes to communicate. It includes:
- Analysis of the current situation: what message to convey, budget, available communication tools, opportunities and threats in terms of communication, etc.
- Communication objectives: determined using the SMART method, i.e. objectives must be specific, measurable, achievable, realistic and time-defined.
- Targets: customer segments, personas, etc.
- Key messages: depending on the customer, they must be clear, simple to understand and memorable.
- Communication choices: traditional media, social networks, newsletters, Google Ads, Facebook, press releases, events, etc.
- Communication calendar.
- Budget.
- Key Performance indicators (KPIs).
The communication plan will help you structure your messages, choose the right channels and communicate consistently with your target audience.
Marketing strategy
The marketing strategy will enable you to determine the concrete actions you will take to attract, convert and retain your customers.
A marketing strategy typically includes:
- A SWOT analysis (strengths, weaknesses, opportunities and threats).
- Market segmentation.
- A description of the company’s positioning.
- A description of the marketing mix (4p): product, price, place (distribution) and promotion;
- Digital strategy: SEO, advertising, social networks, email marketing, etc.
- KPIs to measure the success of initiatives.
The marketing strategy will enable you to define concrete actions to attract and retain customers, using a mix of digital and traditional approaches.
The communication plan and marketing strategy are interconnected, ensuring your company’s success from the outset by capturing customers’ attention and maximizing the impact of your actions.
6. Establish Human Resources Management
Establishing human resources (HR) management before launching a business is essential to ensuring an efficient organization and maintaining a healthy working environment.
HR management structures recruitment, talent management and employee relations. It also ensures that company policies comply with labor laws and regulations.
Good human resources management paves the way for a company’s success. It makes it possible to:
- Attract and retain the best talent
- Ensure compliance with labor laws
- Create a coherent, motivating corporate culture
- Maximize employee productivity and well-being
Before launching your business, be sure to determine the organizational structure, i.e. the roles and responsibilities of each person and the hierarchical structure (horizontal or vertical).
Define your staffing needs and your process for recruiting and integrating new employees.
Determine what your employees’ schedules will be, and how you will communicate with them. Consider acquiring personnel management software to facilitate your personnel management tasks, such as :
- Creating work schedules;
- Digitizing employee information;
- Managing leave requests;
- Payroll processing;
- Onboarding of new employees;
- Etc.
Make sure you have a plan for employee compensation, training and skills development. Take the time to create the various personnel management policies, such as leave-taking policy, absence policy, computer systems use policy, etc.
Sound HR management from the outset lays a solid foundation for your company’s growth and success.
The Legal and Administrative Aspects of Starting up a Business
The legal and administrative aspects of starting up a business in Canada are numerous and can sometimes be complicated. That’s why it’s a good idea to seek professional help to make sure your business starts up properly.
This section will help you untangle the various aspects to consider, so you can make informed decisions.
Legal Structure
Choosing the legal structure of your future business is a very important decision. It will directly influence the taxes you have to pay, the development of your business and the laws and regulations you have to follow.
The different possible structures depend on the laws in place in your region. Here are a few examples of common legal structures:
- Sole proprietorship
- Joint-stock company
- Limited liability company
- General partnership
- Cooperatives
Administrative and Legal Tasks
Once you’ve determined the legal status of your business, you’re ready to register it with the official bodies in your area. Once registration is complete, you’ll be able to obtain the necessary licenses, permits and insurance for your operations.
Your tax obligations may vary from one region to another, depending on the legal status of your company and the nature of your activities. Don’t hesitate to consult experts to make sure you fully understand the regulations and laws you need to follow.
Tools and Resources for Entrepreneurs
There are a multitude of tools and resources available to help entrepreneurs.
The assistance available will vary greatly depending on your region and the budget you have available to seek professional help.
Here’s a list of the most common tools and resources:
- Take a free online training course
- Get help from a mentor
- Consult the resources offered by your local chamber of commerce
- Consult government resources
- Seek advice from tax experts
- Participate in information meetings
- Buy specialized books
- Consult online forums
What Are the Steps Involved in Starting a Business in Canada?
The steps involved in starting a business in Canada include:
- Identifying a viable business idea
- Conducting market research
- Writing a detailed business plan
- Defining the company’s mission, vision, and values
- Registering the company with the relevant authorities
- Securing the necessary financing
- Obtaining required permits
- Implementing a marketing strategy and communications plan
- Developing a visual identity
- Creating a website and sales channels
- Establishing personnel management processes
- Hiring employees
- Launching business operations
How Do You Obtain the Financing You Need to Start Your Business in Canada?
The most common ways to finance a business project in Canada include:
- Investing your own savings
- Finding investors
- Applying for a loan from a banking institution
- Finding an angel investor
- Obtaining grants
Why Conduct Market Research Before Starting a Business in Canada?
A market study gives you a better understanding of your target clientele and the competition, so you can adjust your business project to minimize the risk of failure.
