BYOB (Be Your Own Boss): Why make OTHER people rich? Start your company NOW. Here's how
Are you passionate, knowledgeable, and tired of making money for someone else because you’re a rockstar at your job? Start your own business and be your own boss (BYOB)! It’s easier than you think...
Step 1: Create a business plan
No, this step is not required. In fact, you will only every truly need a business plan if you are trying to acquire a loan, BUT (and this is a BIG but), a business plan will help you focus your goals, your operations, your finances, and your plan of attack, and with futurpreneur’s online business plan tool, it really isn’t that difficult.
A business plan is a really useful tool at any point of development in your business, as it helps you to focus on what truly is the life-blood of your business...your customers. I was a small business owner too, and our passion often has us so wrapped up in what we want out of our company, that we forget who we should actually be catering to.
Step 2: Register your business name
If you’re like more excited first-time entrepreneurs, you’ve already got the best name ever in mind. Great! The next step is to register it to make sure that, a) It’s not taken by someone else b) It’s an acceptable business name (that’s right, there are rules) c) It’s protected from someone else using it. You have the option of registering your name federally or provincially (if it’s federally registered, no one else in the country can use it, if it’s provincially registered, no one in your province can use it, but someone in another province can). You will be asked to submit 3 name choices. This is because the rules of registering a business name dictate that the name must be specific and unique, and it must be descriptive of the service or product you offer. For instance, if I wanted to register the name “Food Canada” for my cooking school, it will probably be denied because it is too general. A better choice would be “Canadian Culinary Arts School”. If you have a unique name like “Shopify” (for online sales), for instance, that will most certainly be approved (except that it is already taken, so it won’t be).
Step 3: Register your business
First you will need to decide on what structure you would like your business to take: a sole-proprietorship, a partnership, or incorporation. Each has its challenges and their benefits:
Sole-proprietorship: This is the simplest business structure. If you are planning on keeping your operation small (as in you will be your only worker), this may be your best option. You can directly incur write-offs that are a result of doing business (equipment, uniform, research, car expenses, gas, dinner meetings, etc). Taxes are relatively simple (you can do them on your own) and the fact that you have no employees means you do not need to make payroll deductions.
Partnership: A partnership is almost exactly the same as a sole-proprietorship except that you have a business partner who owns 50% of your shares. The major downside to sole-proprietorships and partnerships is that you, the business owner, incur all risks and liabilities associated with the business. This means that if the business gets sued for something, you, the owner are being sued.
Incorporation: Incorporating your business offers one major advantage: You and our business are separate entities, and risk and liabilities associated with the business do not put you at risk. If you are planning to have employees, or pay yourself as an employee, this may be the best option for you. Come tax-season, you may want to have a professional look things over, as this structure can offer a few more snags as well as loopholes, if you know what to look for.
Once you have decided on the structure that is best for you, you will need to register your business and get a business number (BN). Your BN is your unique identifier, and you will need it on-hand whenever you are doing your taxes or registering for a PST/GST account.
Step 4: Register for a PST/GST account
If you conduct business in Canada, you will likely need to register for a PST or HST account, depending on the province you conduct business in (with the exception of Alberta). For the most part, if you sell or provide services to taxable goods, you will need to register for a PST account, and collect it (7%) from your customers. Some businesses that provide a service, like personal training, chiropractics, dentistry, etc, do not need to charge PST on their services (though they may on the goods they provide).
In Canada, every business that will have gross earnings in excess of $30,000 per year, must register for, collect, and remit GST. If you are unsure or think you’ll be very close, it is best to register. Even if you don’t break the threshold, you can collect and remit GST. It is best to charge it and remit it even if it is unnecessary, then to not charge it and find that you did need to, in which case you will be on the hook for the amounts you should have collected.
Step 5: Register with WorkSafeBC
If your company is incorporated and employs workers, you must register with WorkSafeBC. If you are a sole-proprietorship or partnership, you may not need to (depending on your industry). If you find that your business must register for insurance with WorkSafeBC, you will need to register and establish a classification that best represents your industry and line of work. This classification will establish what your insurance rates are, based on $100 of payroll.
Step 6: BONUS – Grants, loans and subsidies
The first thing you should know is that funding is actually pretty difficult to obtain. There are a finite amount of funding sources available (and a finite amount of funds) and quite literally hundreds of thousands of businesses applying. HOWEVER, this doesn’t mean you shouldn’t apply! All of the government funding available to businesses in Canada can be found here.
So there you have it! Your own business in 6 easy steps. Now, running your business is another matter, but with these tips to get you started, and your passion, there’s no reason you shouldn’t BYOB.