British Columbia is a great place to start a business. It’s the birthplace of Lululemon, Slack, and, of course, NEXUS Insurance. The province provides endless opportunities for small and large businesses to thrive.
If entrepreneurship and starting your own business have crossed your mind, this post is for you. We discuss some of the significant steps on how to start a business in BC.
1. Research and develop your business ideas
Every business starts with an idea. Whether you want to disrupt an industry or start a side hustle, it’s valuable to research the issues your business might face. This helps you prepare for as many upcoming problems as possible.
It’s wise to research some of the following items:
- Industry: Each business has an industry. You could service anything from weddings to insurance. It’s vital to understand how an industry runs. For example, figure out typical margins, industry trends, seasonalities, etc.
- Type of business: Businesses come in different formats. You have freelance practices, e-commerce websites, tech startups, retail stores, and more. Like researching an industry, you should explore the trends, challenges, and benefits of your business type.
- Competitors: It’s rare that anyone has an idea so novel that you have zero competitors. Even new products have indirect competitors that vie for their target demographics’ wallets. It’s ideal to find out your competitor’s identity, strengths, weaknesses, etc. This lets you compete with them on a better footing.
In addition to research, you want to flesh out your business idea. The best step is to design a plan, which involves writing out how you’ll manage your company from day one. It should include:
- Company mission, values, and goals
- Financial and operational strategies
- Industry and competitive analysis
- Marketing strategy
- Risk mitigation plan
You could further speak with mentors and colleagues about your ideas and get their feedback.
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2. Determine the costs of starting a business
Starting a business is rarely free. You have startup costs like initial materials, rent, software, equipment and tools, and more. Part of your business plan should outline the cost of your entire endeavour.
Finding out you’re over budget is often an entrepreneur’s nightmare. You might then scramble to find extra cash from lenders or investors to get your venture off the ground.
Consider costs like:
- Product: raw materials, shipping, patents, manufacturing, etc.
- Operations: legal and accounting, software and technology, etc.
- Team: salaries, independent contractors, etc.
- Marketing: logo design, website, printed materials, etc.
3. Choose a business structure
The proper business structure is often an entrepreneur’s first major decision. The following are the three most common business structures:
- Sole proprietorship: Common for solopreneurs just starting. You and your business generally have no distinction. As a result, you file any business income earned on your personal tax returns, and lawsuits against your company are suits against you. Sole proprietorships don’t require high administrative costs or paperwork — they’re simple!
- Partnership: Involves two or more individuals starting a venture without the need for a separate legal entity. Generally, the partnership divides income based on an agreement, and each partner records the income on their personal tax returns, similar to a sole proprietorship. Because the structure involves multiple people, there’s more complexity than a sole proprietorship.
- Corporation: A separate legal entity with its own tax returns, bank accounts, debts, etc. If someone sues your corporation, you’re not personally in trouble. A corporation is more complex and requires an incorporation, accounting and legal help, and more paperwork.
If you’re unsure which structure to choose, it’s best to speak with an accountant or lawyer. Accountants and lawyers are professional business advisors who can assist your entrepreneurial needs.
4. Register a business name
A business name is the identity of your company. Sole proprietorships often use the principal’s name as their business name. However, if this isn’t the case, or if you use a partnership (in most cases) or corporate business structure, you need to register your business name.
Name registrations commonly take a few days and are done online or by mail for a $30 to $50 fee. The process also requires you to search the BC name registry and ensure the name is available before you register.
Most unused names are available. However, some laws prohibit words such as “bank”, words and phrases that might mislead prospective customers, and inappropriate terms.
5. Register for GST/HST and PST
If your business sells more than $30,000 per year in products and/or services, it’s required to collect sales taxes. This includes GST, HST, and PST, depending on your customer or client’s location.
You can register online, through fax or mail, or by phone.
Even if you haven’t hit the $30,000 mark, GST/HST registration may benefit you. As a registrant, you’re able to claim input tax credits — effectively a rebate on the sales tax you paid on business materials.
6. Find the professionals you need
Even if you’re the sole business owner, it doesn’t mean you’re going at it alone. Business owners need the help of numerous professionals to ensure their company runs efficiently and profitably.
Here are a few professionals to consider:
Accountants: An accountant provides vital tax and business advice. Besides helping you select a corporate structure, accountants manage your business tax returns and select the most tax-efficient methods to operate. They also keep you out of trouble with the Canada Revenue Agency. As your business progresses and you outsource more tasks to professionals, an accounting firm may also provide bookkeeping services.
Insurance broker: A good business owner manages their risks and one method to do so is through insurance. The right business insurance policy protects you from lawsuits, cybersecurity threats, and loss of core business assets. An insurance broker can assess your risks and suggest products to ensure you don’t face unwanted surprises in your entrepreneurial journey.
Legal professional: A lawyer is often vital at the outset of a business. If your venture involves more than one owner, it’s ideal to prepare a partnership or shareholder’s agreement. This contract determines the relationship between you and your co-owner. It reduces the risk of disagreements that may tear apart your company and lead to court actions.
Legal professionals are also critical to develop relationships with other businesses and clients and customers. Your company usually manages these relationships through agreements and contracts. An experienced corporate lawyer can ensure you’re getting a fair bargain.
BC is a terrific place to begin a business venture. It’s home to many successful corporations that now dominate the global stage.
One of the core components of starting a business is the right insurance.
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