How to Start a Small Business in Canada and Beat the Competition

Having a good idea for a business is just the first step to realizing your dream as a business owner.

There’s a whole process to how to start a small business in Canada, with legal and financial steps that you gave to take to prepare yourself.

Fortunately, while it can take some time to properly set your business up, the process itself is not that complicated. 

How to Start a Small Business in Canada

For the purposes of this article, we’re going to assume that you’ve already developed a product and name for your business. We’ll focus on the nuts and bolts of getting your firm off the ground. 

Register or Licences

Depending on your industry, you may need to get a business license. This will also depend on where you are. You can use Industry Canada’s handy tool to see what you need to apply for (and all the forms that come with it). 

You should also look into the different types of incorporations, and determine if a sole proprietorship, partnership, corporation, or cooperative are the best choices for what you want to do. Each comes with different tax benefits and red-tape. You can get a rundown of the different types of businesses here.

Finally, also be aware that if you make more than $30,000 gross, you’ll need to register to collect HST on what you’re selling. 

Develop a Business Plan

Even with a name and product, you need to write a business plan to develop a way forward. Writing a business plan will set your goals for growth, sketch out your competition, and let you figure out how you should define your brand. 

If you’re just starting out, a business plan doesn’t have to be a hundred-page document. There are tons of templates online that are quite short, even a single page (though I’d recommend writing a little more detail than that).

Once you have a business plan, it’s much easier to talk to investors and secure financing, because you’ll have research and goals that you can point at to showcase the viability of your business. 


Having a marketing plan before you start selling is essential. If people don’t know about your business or product, how do you expect to make money?

There are two methods you can use: traditional methods like TV and print ads in a local area, or through online efforts like social media and internet ads. SEO and SEM services are also very important because if your business ranks highly in search engine results you can get new customers very quickly. 

It’s always best to focus marketing efforts on certain areas where you operate. If you’re based in Ontario, SEO Toronto agencies will be able to tap into trends and connections that SEO Edmonton agencies won’t, for example. 

Businesses Are Never Static

While knowing how to start a small business in Canada is the first step, it is one of many. Businesses require constant care and attention: you’ll have to develop new business plans, change your marketing strategy, and even change the type of incorporation of your business as it grows.

Fortunately, there are tons of resources available that can help you along the way. For more information about starting a business, feel free to browse through our other how-to guides.

Adam Hansen

Adam is a part time journalist, entrepreneur, investor and father.