1. Before starting your business
You have made a very important decision, but have you really considered all the implications?
Many people have thought about the benefits of starting a business: the independence it would bring; the chance to be your own boss; and the opportunity to earn profits. All of these are good reasons for getting into business. But, are you really ready for the changes it will bring in your life? How much risk are you willing to take?
Why do you want to get into business?
To be an entrepreneur is to be a risk-taker. At the heart of every new business is an entrepreneur: someone not content to leave things as they are, but wanting to strike out on his or her own. You, as an entrepreneur, bring two important ingredients to your new business: your confidence in your idea and your willingness to accept the hard work and long hours necessary for success.
Before setting the wheels in motion it is important for you to evaluate your reasons for getting into business and your capabilities. Our documents Checklists for Going Into Business and Points to Consider When Starting Your Own Business will help you make this evaluation.
Assessing your personal strengths and weaknesses
Running a business requires skills in management, organisation, accounting, marketing and economics. Few managers possess all of these skills. You must carefully review your own strengths and weaknesses and develop strategies for overcoming areas where you may be weak. Here are useful tests and self-assessment tools:
Entrepreneurial self-assessment – Business Development Bank of
Assessing your financial resources
Since you now know why you want to get into business, you must take stock of your financial resources.
You must estimate:
* The amount of money you are willing to put at risk
* The minimum income needed to meet your current obligations and continue to live comfortably
Estimating the income needed to meet your living expenses
Your minimum monthly draw from the business must allow you to cover your living expenses. Include expense items such as:
* Monthly payments on loans and credit cards
* Rent or mortgage payments
* Food and clothing Automobile expenses
* Income from other sources
Estimate your capital assets
Your next step will be to determine the capital (money, property and effort) you are willing to invest in your business. You may need to sell some of your personal assets to obtain the cash needed to start your business. In undertaking this assessment, you must determine your net assets – what you own less what you owe.
What you own:
* Real Estate
* Automobiles and equipment
* Life insurance
Less what you owe:
* Charge accounts
You will find an example you can follow on the Web at http://www.nbc.ca/WebInfoWeb/DispatchRequest?aliasDispatcher=finStatement&lang=en
How to recognise the risks
Businesses fail for a variety of reasons and it is important to recognise the risks. Some common reasons for failing are:
* Lack of experience Wrong product
* Poor timing
* Lack of money
* Improper pricing (too high/too low)
* Inventory mismanagement
* Spending too much on buildings and equipment
* Poor credit granting practices
* Excessive withdrawals by owners
* Unplanned expansion
* Wrong attitude
* Wrong location Domestic (family) pressure.
Strategies for reducing risk:
* Talk to people. Meet with potential clients to discuss your idea and what they, as customers, want.
* Look to the industry leaders. If there are others in your business within your community or in other communities that are particularly successful, see what they are doing right. Don’t be afraid to copy good ideas.
* Consider a pilot test or a customer needs survey.
* It may be possible to play it safer by developing your idea on a small scale.
* Educate yourself. Take courses in bookkeeping, marketing, people management, business management, accounting or computers.
* All businesses today are affected by some form of government regulation: taxes, fire, safety, transportation and so on. Make sure you are up-to-date with any regulations that may affect you.
* Work with businesses similar to the one you want to start.
* Start a home-based business on a part-time or full-time basis.
Your challenge is to decide on the level of risk you are willing to assume and understand the consequences of that choice.
Feasibility Checklist for Starting a Small Business (document)
SME direct – Industry Canada
For businesses just starting out or well on their way, this site contains diagnostic and benchmarking tools, links to informative Web sites, relevant databases and other resources to assist you in your decision-making. http://strategis.ic.gc.ca/epic/internet/indir-ect.nsf/en/Home
2. Define their project
The Entrepreneurship Assistance document for your region contains contact information for organisations that can provide you with valuable information about planning your business. In most cases, it will cost you nothing but the time and energy required to contact these organisations and request information. Consult this document on our Web site or contact one of our agents.
It is possible to start a business with one idea. It\'s also common for someone to want to start a business without knowing exactly what they would like as a business. However, it has been proven that most successful businesses are built out of several ideas which open doors to several possibilities. This means that if one project doesn\'t turn out as you hoped, you will have all those other possibilities to draw from. A good business should:
* satisfy your personal goals and interests
* meet the client\'s needs
* find a level of success in the market
* be able to satisfy your financial goals.
We have put together some ideas that can help you get started:
Contact or Visit
Friends and acquaintances
Home / trade shows
Plants and manufacturers
Capitalise on Trends or Fads
Hobbies and travel
Products and services
New product publications
Newspapers – \"Business Opportunities\"
Patents and patent gazettes
Retail chains directory
Shopping centres directory
Improve or Replace
Existing products and services
Good products that have failed
Part of a larger market
Recycling existing products
Exploring your opportunities
Having an idea is not enough to start a business. The idea is only good as long as it is possible to turn it into a profitable business opportunity. It also has to be a good \"fit\" for you if you are going to make it work. There is a tendency for new entrepreneurs to start a business in a field they know well. However, you should not limit yourself to what you know. It is also just as important to look at what you like. Exploring ideas outside your present line of work may help you find the right opportunities.
Look very closely at what is going on around you. Fads and trends can be good business opportunities. Be careful, however. A fad is short-lived and can generate quick money and a trend may last longer but a business cannot solely be based on fads and trends. This is why having more than one idea is apt to bring you longer success. You have to follow your opportunities and your markets. A successful business is not a stagnant business; it is constantly changing to meet the needs of the market.
Discussing your idea with others
You may now be at a point where you should discuss with others the information you have found on your own. This will help you to evaluate the impact of your new business on your community. Family and close friends could certainly give you valuable feedback but you will also need to contact professionals who could eventually become your most important colleagues throughout your business career such as your accountant, your banker or your lawyer.
Stating your idea
Now is the time to start putting your ideas down on paper. Write a concise summary of your business idea in one or two sentences. This may seem to be a rather trivial thing to do but a short, clear summary of your business is a must before you begin to design a business plan. It will focus your efforts. You may be surprised how difficult it can be to sum up your entire business venture in a single sentence. An example of a statement summarising a \"gadget\" production operation might be as follows:
\"Atlantic Gadget Corporation is a provincially incorporated company engaged in the design, manufacture and marketing of third-generation gadgets for the computer industry.\"
Your next task will be to do some preliminary market research. Many people believe that if they have a \"good\" product or service it will \"sell itself\". This is very seldom true.
Prospective entrepreneurs should first conduct a very careful assessment of the market for the goods or services they plan to offer. Market research will play an important role in determining whether your business idea is viable. It can be a very simple and straightforward exercise. Basically, it will involve asking your potential customers whether they will buy or use your products or services. How you do the research will really depend on the type of business you want to start and who your customers are.
The market research should help you answer some very important questions such as:
* Are there businesses similar to the one I want to open in my community or neighboring communities? How well are they doing? Can the market be shared? Is this a growing or shrinking market?
* Who will my customers be? Will they buy my products or use my services? How much will they buy? What prices do they expect to pay?
* Will my business be easily accessible to the public? How will they know where to find me? What will determine that the customer will use my services or buy my products rather than my competitors\'?
Market research should be brief and to the point. You don\'t have to ask many questions but the questions you ask must be relevant. A good market survey can contain as few as four to six questions and take less than 10 minutes to complete.
Numerous market studies on various subjects are available at our documentation centre. For more information, contact one of our agents or consult our catalogue on the Web at http://catalogue.infoentrepreneurs.org/&lang=fr
Can You Make Money With Your Idea or Invention (document)
Market Analysis (document)
Guide to Market Research and Analysis (document)
Evaluating your Ideas (Web page)
Marketing Primer (Web page)
Forty Concepts for A Small Business (Web page)
Canadian Company Capabilities – Industry Canada
Canadian Company Capabilities (CCC) is an online database which thousands of profiles of Canadian companies. This database contains vital company information that can be searched to locate Canadian suppliers and distribution channels, to determine competition, to form partnerships and to uncover export ventures. The registration is free. For more information, consult our document Canadian Company Capabilities, call 1-800-328-6189, or visit
iCRIQ – Centre de recherche Industrielle du Québec (CRIQ)
icriq.com gives you free access to the most accurate data bank of Québec manufacturers and wholesalers-distributors. The purpose of the data bank is to make structured information available on industrial and commercial establishments in order to promote business development in Quebec. For more information, call 418 652-2214 or 1-888-594-7170, or visit at http://www.icriq.com/en/index.html
3. Making Your Business Idea a Reality
You have taken the first steps towards getting into business. You are now ready to take the next steps before developing your business plan. Your next decisions are:
* Choosing how to get into business – starting up from scratch, buying an existing business, or buying a franchise.
* Choosing the form the business should take – proprietorship, partnership or a corporation.
Ways to get into business
There are three common ways to begin a business – starting from scratch, buying an existing business, or buying a franchise. A key factor in choosing what type of business you want to begin is risk, or your perception of risk. If you are an experienced businessperson, you may want to start from scratch. If you are inexperienced or do not want to take risks, you may want to buy an existing business or a franchise.
Starting from scratch
This is the route chosen by most first-time entrepreneurs. Risks tend to be highest in a new business, but so are the potential rewards. Starting a business often means long hours doing everything from waiting on customers to filing, bookkeeping and sweeping the floors.
During your start-up phase, you will be doing things you never dreamed you would, yet the satisfaction you get from a successful start-up will make that effort worthwhile.
Starting from scratch
* Potentially lower start-up costs and overhead.
* Freedom to make your own decisions (marketing, pricing, product selection).
* Flexibility to change quickly.
* High risk.
* Increased planning and development time.
* Need to develop new clientele.
* Need to develop new systems and processes, supplier contacts, etc.
Buying an existing business
If you are a first time business owner, buying an existing business offers an excellent way to reduce risk. However, you must be very careful to pick the right business for the right reason at the right time. Before purchasing a business you must answer the following questions:
* Why is the business for sale?
* Is the asking price justified?
* Are you paying for assets that you will not need?
* Do you have the skills needed to operate the business?
To make sure you make the right decision, you should do the following:
* Have an accountant review the financial statements and estimate what the business is worth;
* Get an appraisal of the assets and equipment;
* Check out the age and amount of the inventory;
* Find out if you are being asked to buy assets you will not need;
* Check out liens, leases and contracts that may be in place;
* Talk to suppliers and customers;
* Seek legal advice.
Buying an existing business
* Less risk than starting from scratch.
* Supply and service systems in place.
* Established clientele.
* Immediate cash flow.
* Higher costs than starting from scratch.
* Less flexibility: existing contracts (union agreements) may limit future actions.
* Clients and suppliers may have either favourable or negative predispositions.
* Established organisational culture may be difficult to change or slow to adapt to new ways of doing business.
* Liabilities may exist relating to warranties, government regulatory infractions or tax reassessments.
Buying an existing business
According to the Canadian Federation of Independent Business, the vast majority of SME owners who recently acquired their business though a succession agree that succession planning on the part of previous owner yields significant benefits. It :
* prepares successors for their future as business owners;
* provides financial stability to the business;
* improves the financial standing of the business;
* increases the value of the successor’s investment;
* fosters harmony with employees;
* creates a good relationship among stakeholders (key managers, customers, suppliers, etc.);
* assists successors in minimising their overall personal financial liabilities.
Business owners should start to plan early for succession, and early inclusion of the future successor in the plan is likely to help maintain stability within the business. For more information, visit http://www.fcei.ca/default_e.asp
Succès-Relève program, the choice of business buyers
This program is designed for people willing to acquire an existing business. The goal is to educate, train and equip the young business buyers to acquire the coveted existing companies. This program offers the knowledge required (training, advisers, coaches and mentors) along the transfer process to make their acquisition a success. This program is available thanks to our financial partner the \"Forum jeunesse de l\'île de Montréal\" and offered by the \"Service d\'aide aux jeunes entrepreneurs Montréal Métro\" (SAJE). For more information, call 514 861-SAJE or visit http://www.succesreleve.com
(In French only)
To find available financing programs for business succession, consult our document Financing a Business.
Franchising has become a very successful way for many entrepreneurs to get into business because most franchises are based on a winning formula. Franchises work because market assumptions have been proven. Supplier and distribution networks are normally in place, as are training and orientation programs.
The arrangement is covered by contract. The franchiser usually charges an initiation or start-up fee, plus royalties on sales. The package may include such items as:
* Established national/regional marketing campaigns
* Leasing, employee training, use of trademarks
* Redesigned buildings and layouts
* Management training programs
The degree of control retained by the franchiser is not the same for all franchises. Before entering a franchise agreement, you should make the same careful analysis that you would for any other type of business. You must bear in mind that although franchise owners are self-employed, they must conform to someone else’s pattern of doing business. Franchising works because the formula or package has been tested in a variety of situations. There are no guarantees, but if the formula is followed, risks should be minimised.
This adherence to a formula may limit personal freedom and business experimentation. You should know in advance if your personality and motivation are consistent with such a structured form of doing business. The Association of Canadian Franchisers (most of
Canada’s leading franchisers are members) can provide valuable advice and assistance.
* Lower risks.
* Proven formula.
* Total business package.
* Brand recognition because of national or regional marketing campaigns
* Market protection.
* Existing supplier/distribution networks in place.
* High entry costs.
* Ongoing royalty payments.
* Standard products and processes.
* Little opportunity for experimentation.
* Your market size may not be large enough for the franchise to be considered.
Some key considerations
In making your choice, you should consider the risk/return trade-off (the higher the risk the greater the return) and your personal risk tolerance. A business start-up takes the most time and entails larger risks, but the returns may be higher. Be sure to assess the following when making your decision:
* Tolerance for risk;
* Knowledge of business;
* Time frame: it takes longer to start-up your own business;
* Understanding of the market environment: by buying out your competition, you are gaining an immediate market share;
* Amount of personal resources you have to invest in the venture: it costs more to buy an existing business or a franchise;
* Desire to make your own decisions.
Other resources :
Buying a Business (document)
Checklists for Franchisees (document)
Êtes vous prêt à reprendre une entreprise?
This twenty-question quiz will help you decide if you are ready to take over a business.http://dev3.vortexsolution.com/releve/reprendre-form.cfm
(In French only)
(In French only)
Le petit guide de la franchise: This guide, made available by the Quebec Law Network, is for people already belonging to a franchise network or just learning about them. It is a reference tool explaining the basics of franchising and helping people to make a preliminary decision. http://www.avocat.qc.ca/english/index.htm
Canadian Franchise Association (CFA)
The Canadian Franchise Association (CFA) is the national voice of Canadian franchising. http://www.cfa.ca/
Quebec Franchise Council (QFC)
The Quebec Franchise Council (QFC) is an association regrouping franchisors, franchisees and suppliers of the franchise industry in Quebec. The QFC promotes franchising as a business model to future franchisors and franchisees. The QFC offers its expertise to existing franchisors, franchisees and is also the spokesperson of the industry to the municipal, provincial and federal governments. For more information, call 514 340-6018 or visit http://www.cqf.ca
Franchises et franchisage – MDEIE
(In French only)
Where to buy or sell a business
Forms of business organisation
One of the more important decisions you will have to make is choosing the legal structure of your company. Your lawyer or your accountant can help you make the right choice. There are four basic types of business organisation: sole proprietorship, partnership, corporation and co-operative.
A sole proprietorship is a business owned by a single person. It is the most basic business structure and is usually owner-operated. It is the easiest and simplest form of business to set up, organise and manage, and is not subject to as many regulations as the more sophisticated business structures. A business license is required, which can be obtained from the city, town or village office.
A sole proprietorship may be operated under the owner’s name without registering the name with Legal Registries. If you wish to operate an individual company under a name which does not include your family name or first name, you must registrer at Registraire des entreprises. The sole proprietorship is subject to the rules of the Civil code of Québec.
* Easy to set up.
* Owner has complete freedom of operation and control.
* All profits belong to the owner.
* Business expenses may be deductible from personal incomes for tax purposes.
* If your personal assets are limited, you may not always have the required capital to meet business needs. Lenders may be reluctant to help.
* In the case of business failure, the owner’s personal assets, including home and properties, are subject to claim by creditors. The owner assumes all risks, accepts all profits and losses and pays all taxes.
* Legal life of the business terminates with the death of the owner.
* Profits are taxed as personal income. If profits are high, you may pay higher taxes than you would if you were incorporated.
There are two forms of commercial partnership: general partnership and limited partnership.
A general partnership is formed when two or more people pool their resources and abilities in a joint business venture. The following terms should be set out in a partnership agreement:
* Objectives of the partnership;
* Amount of investment to be contributed by each partner;
* How profits and losses are to be shared;
* Duties and participation of the partners;
* Provisions in the event of death or retirement – a succession plan;
* Special conditions;
* How the partnership will be dissolved.
You must register the same way as a person operating alone and renew the registration whenever a new partner joins the company.
* A partnership is easy and inexpensive to start and is also flexible.
* Provides additional sources of capital for the firm by combining the assets of two or more partners.
* Provides more resources and expertise to perform the functions of the company.
* A partner can be held personally liable for all debts incurred by the business (unless it is a limited partnership).
* Each partner is responsible for obligations placed on the business by other partners.
* Profits are taxed at personal tax rates.
* The company ends with the death of any of the partners.
This is a special arrangement where a person may contribute financially to the partnership but is not involved in managing the day-to-day affairs of the partnership. A limited partner is normally only liable to the firm or its creditors to the extent of the capital he or she has agreed to contribute towards the partnership. It is most important to define the particular requirements in a contract.
Corporation or limited company
A corporation is a business which is a legal entity separate from the owner or owners of the business. The act of incorporation gives life to that entity. The terms corporation, incorporated company, limited company all mean the same thing. A corporation has the same rights and obligations under Canadian law as a natural person. A corporation can acquire assets, go into debt, enter into contracts, sue or be sued, and even in some situations be found guilty of committing a crime. A company may incorporate under the laws of Québec or of Canada.
If a company is planning to carry on business in more than one province or outside the country, federal incorporation should definitely be considered. The enhanced protection provided to federal corporations is often a selling point for choosing incorporation under the Canada Business Corporations Act (CBCA). This is seen as an important element of the right to carry on business in Canada. Once a company is federally incorporated, the corporate name has a protected status second only to trade-mark protection. For more information, consult our document Federal Business Incorporation - Canada Business Corporations Act (CBCA).
* A corporation has limited liability. The company is a distinct legal entity apart from the owners (shareholders). Generally, shareholders are not held personally liable for the debts, obligations or acts of the company except to the extent of his or her actual investment. Directors are the exception and may be liable.
* The life of the company does not end with the death of a shareholder.
* Ownership of a limited company can be transferred by the selling of shares without interfering with the operations of the business.
* Capital may be accumulated from the sale of common or preferred stock, loans or retaining profits from the business.
* Incorporated companies may be subject to beneficial tax rates.
* The fees required to establish and maintain a corporation.
* Activities are limited to those specifically granted by the company’s articles of incorporation.
* The corporation is subject to more regulations.
* The small corporation’s limited liability may be negated by having to sign personal guarantees to banks and major creditors.
A co-operative is a special type of business that is owned and controlled by its members. Each member pays a membership fee or purchases a membership share and has one vote regardless of how much money they have invested in the co-op. Some co-operatives may pay out patronage dividends according to the amount of business done by the member.
The purpose of a co-operative is to unite those in similar circumstances and with common goals to gain the advantages of large-scale operations. A co-operative will need to be incorporated either provincially or federally. It may be formed in accordance with a provincial co-operative statute setting out its corporate form and mode of operation or in accordance with the Canada Co-operatives Act when the co-operative has a place of business in at least two provinces.
* Social and educational needs may be served by the pooled effort necessary to operate a co-operative.
* Community development in remote areas may be stimulated through the formation of co-operatives.
* The life of the co-operative does not end with the death of a member.
* Greater ability to respond to communities’ needs.
* The collective buying power of co-operatives greatly exceeds that of the individuals who make up the co-operatives.
* Members having the larger investment have the same voting privilege as the smaller contributors.
* Because of their democratic form and social and educational objectives, often business decisions may be made for reasons other than return on investment.
Registraire des entreprises (REQ)
800, Place Victoria
Place Victoria Tower
Montréal (Québec) H4Z 1H9
Registraire des entreprises (REQ)
800, Place d\'Youville, RC
Québec (Québec) G1R 4Y5
Tel.: 418 643-3625 or 1-888-291-4443
Points of Service for Registration: http://www.registreentreprises.gouv.qc.ca/en/no
The financial institutions surveillance and control component (Autorité des marchés financiers) http://www.lautorite.qc.ca/accueil.en.html
5, Place Ville Marie, bureau 800
Montréal (Québec) H3B 2G2
Tel.: 514 496-1797 or 1-888-237-3037
Register your business online: Corporations Canada On-Line Filing Centre
Other resources :
Forms of Business Organization (document)
Info-Guide – Cooperatives (document)
Starting an Early Childhood Centre (document)
Starting a Convenience Store (document)
Starting a Personal Care Home for Seniors (document)
Starting a Bed and Breakfast (document)
Starting a Restaurant (document)
Starting a Beauty Salon/Barber Shop/Esthetics/Tanning (document)
Starting an Alternative and Complementary Health Care Business (document)
Starting a Consulting Business (document)
Publications du Québec brochure: Les principales formes juridiques de l\'entreprise au Québec available on the Web at http://www.pubgouv.com/justice_com/principales_formes.htm
(In French only)
Winning Retail 2nd Edition
This manuel is a useful \"how to\" publication aimed at the retail industry. It contains practical ideas from the real world of retail to help the student of retail form an understanding of the business. For those exploring the possibility of establishing their own retail store, this publication presents an opportunity to assess the strengths and weaknesses of their concept and their state of readiness. For more information, consult our document Winning Retail (2nd Edition) or visit http://www.ic.gc.ca/epic/site/retra-comde.nsf/en/h_qn00034e.html
Self-employed – or independent – workers are people who:
* work for themselves and offer their services to clients;
* generate their own income and pay their own expenses;
* may experience losses or make a profit.
To confirm your status as a self-employed worker, you may ask the Ministère du Revenu du Québec or the Canada Customs and Revenue Agency to determine your status. Forms are available for this purpose.
Employee or Self-employed ? – Canada Revenue Agency
Employee or Self-Employed Person? – Revenu Québec
CMHC Self-Employed simplified
A mortgage loan insurance approval system that will help more self-employed borrowers realize their dream of homeownership. For more information, consult our document CMHC Self-Employed simplified.
To learn about the various tax liabilities and deductible expenses related to the status of self-employed worker, consult our Info-Guide – Taxation (available soon)
To find available financing programs, consult our document Financing a Business.
Aide au travailleur autonome – Emploi Québec
Emploi Québec assesses your file. Then, if applicable, it offers financial or technical assistance to draft and implement your business plan in cooperation with your local development centre. For more information, call 1-888-367-5647 or visit http://www.emploiquebec.net/francais/entreprises/autonome.htm
(In French only)
Affaires et développement québécois (AEDQ)
Founded in 1993, Affaires et développement québécois (AEDQ) is an association of private independent entrepreneurs. Its mission is to help self-employed workers and micro-businesses develop their skills and to promote business collaboration. AEDQ organizes various activities (conferences, training, workshops, networking) that allow its members to be better entrepreneurs and gives them access to a pool of resources and contacts to help them achieve their business goals. For more information, call 514 990-0519, 1 877 979-7973 or visit http://www.aedq.org/
(In French only)
(In French only)
Canadian Federation of Independant Business
Répertoire Travailleurs autonome et Micro-entreprises – STIQ
(In French only)
Répertoire des travailleurs autonomes du Québec – REPTAQ
(In French only)
Self-employed persons – Revenu Québec
Training and mentoring
Training is one of the best ways to ensure the growth of your business, and mentoring is an interpersonal relationship providing support, discussion, and learning opportunities, wherein an experienced businessperson shares their knowledge to increase the know-how and knowledge of a new entrepreneur.
Lancement d\'une entreprise – Ministère de l\'Éducation (MEQ)
While maintaining its modular approach, Lancement d’une entreprise is a flexible program that is very appealing to entrepreneurs. Applicants decide themselves when they want to begin their training and the time they want to devote to it each week. For more information, consult our document Starting a Business – Training or visit http://www.lancement-e.com/
(In French only)
Meilleures pratiques d\'affaires – Ministère du Développement économique, de l’Innovation et de l’Exportation (MDEIE)
The ministry has developed a training program on best business practices (Formation MPA). Designed for company leaders and strategic workers, the program’s training sessions focus on specific subjects adapted to the needs of SMEs. For more information, visit http://www.mdeie.gouv.qc.ca/index.php?id=2253
(In French only)
Entrepreneurship Mentorship Program – Youth Employment Services (YES)
The YES Entrepreneurship Mentorship Program aims to increase the success rate of start-up entrepreneurs by providing them the knowledge and expertise they need to make good business decisions on their own. Novice entrepreneurs are matched with experienced business people who can provide support, guidance and encouragement. The program is goal-based, which means that mentees work toward achieving specific goals established at the start of the relationship.
Mentoring service – Fondation de l\'Entrepreneurship
The mentoring network comprises local groups of mentors supervised and supported by organisations accredited by the Foundation (CAE, CLD, Chambres of Commerce, SADC, etc.). For more information, call 418 646-1994 or visit http://www.entrepreneurship.qc.ca/fr/accueil/mentorat.asp
(In French only)
(In French only)
4. Permits and licences
All companies must fulfill certain basic requirements, and some business activities require permits that must be renewed each year with provincial or federal agencies or departments.
Business licencing and zoning regulation
Consult your City Hall for information on zoning regulations, city permits, construction permits, water tax, business tax, school and property taxes. For more information, consult the Directory of Regions, MRC and
Québec Municipalitiesat http://www.mamr.gouv.qc.ca/repertoire_mun/repertoire/repertoi.asp
(In French only)
Business Number (BN)
The Business Number (BN) is a reference numbering system that replaces the multiple numbers businesses required to deal with the federal government. The number is composed of 15 digits: the first 9 digits are the registration number and the next 2 letters and 4 digits identify the different accounts: Corporate Income Tax, Importer / Exporter Account Number, Payroll Deductions, Goods and Services Tax (GST). In Québec, the GST is managed by Revenu Québec. For more information, consult our document Business Number - BN, call 1-800-959-7775, or visit http://www.cra-arc.gc.ca/tax/business/topics/bn/menu-e.html
Quebec enterprise number (NEQ)
The Québec enterprise number (NEQ) is a convenient way for you to identify your business when contacting Québec Government departments or agencies. For more information, call 418 643-3625 or 1-888-291-4443, or visit http://www.revenu.gouv.qc.ca/eng/entrepri
Register with Revenu Québec for:
* Québec Sales Tax (TVQ)
* Goods and Services Tax (GST)
* Your Employer\'s Number (monthly submission of deductions, Québec Pension Plan, Commission des normes du travail, the Health Services Fund (HSF) and the Fonds national de formation de la main-d\'oeuvre).
For more information, call 514 873-4692, 418 659-4692, or 1-800-567-4692, or visit http://www.revenu.gouv.qc.ca/eng/entreprise/de
Register with the Commission de la santé et de la sécurité du travail (CSST)
Any business person who employs at least one full-time or part-time worker must register with the CSST and make contributions. The registration and the management of files can be done online at: http://www.csst.qc.ca/portail/en/
For more information, call 514 906-3000, 418 266-4000 or 1-800-668-6811.
Commission des normes du travail
An entrepreneur who has employees, must comply with the Act respecting labour standards which sets the rules governing working conditions, including the minimum wage, holidays, special leave and dismissal. The employer must make contributions to the Commission des normes du travail. For more information, call 514 873-7061, 418 646-1262 or 1-800-265-1414, or visit http://www.cnt.gouv.qc.ca/en/index.asp
There may be further permits and licenses required depending on the type of business being established. For more information on specific permits, consult our document Info-Guide – Permits and Licences Required for Certain Types of Businesses
5. Developing a Business Plan
A business plan, if done thoroughly and honestly, will become an important guide or reference during the initial stage of setting up your business and for making strategic decisions later on. Depending on the nature of your business, your business plan need not be elaborate. Bankers, suppliers and other important contacts may want the assurance of a business plan before doing business with you. It is important to them because they are putting other people’s money at risk with your idea. It is important to you because you are putting far more at risk: your financial stability, your reputation and your status in the community. It is far easier and less costly to correct your mistakes on paper before you are in business.
Your business plan
There are several ways to develop your business plan. If you wish to do your business plan on a computer, the Canada Business Interactive Business Planner is an easy-to-follow source. You can save your plan and retrieve it by using your own password, so you can work on it any time you like. You can reach at Interactive Business Planner at http://www.cbsc.org/ibp/
Business Plan Guide (document)
Venture Checklists (document)
Setting the Right Price (document)
Profit Pricing for the Costing of a Service (document)
Business Plan for Small Manufacturers (document)
Business Plan for Retailers (document)
Business Plan for Small Service Firms (document)
Business Plan for Small Construction Firms (document)
Marketing Plan Outline (document)
Our documentation centre offers several business plan models in various sectors of activity as well as start-up guides. Consulting them will help you to formulate your own plan. For more information, contact one of our agents or consult the catalogue on our Web site.
6. Financing Your Business
If you have followed the previous steps, you should now have a good idea of the capital you will need for your business. However, you will also have to consider more than just the start-up costs. It will be necessary to look at long-term financial obligations such as debt servicing and contingency allowances.
The first step in your search for financing is to learn and understand the pros and cons of the various types of capital required in your business. Capital comes into your business in two ways: as equity capital or as debt capital.
* Equity capital, also called equity financing, is investment made by the owner(s) of the company.
* Debt capital, also called debt financing, is provided by outside lenders. It is borrowed for a set period of time and is paid back with interest.
With your business plan in hand, you can approach lenders to secure the capital required. This section provides you with the information needed to do that.
As the owner/operator of the business you will have to provide capital. If you cannot provide the entire amount required for your business, the balance will have to be borrowed. Lenders will be much more confident when they know that you have invested in the business. Your investment, also called \'equity capital\' can take the form of money, other personal assets (i.e. land, buildings, equipment), or \'sweat equity\' (contributed labour). More often, equity capital is a combination of all of these.
Private sources of funds
Private sources usually refer to friends, family or business associates who might invest in your business. It is important to provide these lenders with the same information that you would a commercial lender. A common form of private financing is to share ownership of your business. You need the assistance of your lawyer and accountant before entering into such an agreement. It is advisable to ensure that all parties in a private financing agreement are adequately protected from potential losses or obligations that may arise from the operation of the company.
Government financial assistance
There are many financial programs available through the governments. For more information on key programs, consult our document Financing a Business
Businesses’ first choice in obtaining financing should be to go to a banker. Banks generally offer a wide variety of loan programs with varying interest rates, dependent upon risk. In selecting a bank, you may wish to contact several and choose one that you feel will best meet your particular needs. You may also wish to discuss with others what their experience has been.
Before you approach any lending institution looking for money for your business, you should have a very clear idea of exactly what the money will be used for. If you have completed your business plan, you will have this information readily available.
Generally, loans fit into one of the following categories:
Short term – Anything that can be repaid in one year is considered short term, i.e. financing inventory, accounts receivable, or general operating. Generally known as a \'line of credit\', these short-term financing loans fluctuate with your need and are generally available from banks at current interest rates.
Long term – Debts that will not be paid off within one year, i.e. financing fixed assets. Financed through a lending institution, the loan (known as a \'term loan\') will be at a fixed term with interest rates determined by your particular circumstances.
Collateral accepted by a lender
To protect their investment, lenders will require collateral – something you pledge to the lender, which can be liquidated to meet your repayment commitment should the need arise.
* Personal guarantees
* Cash surrender value of life insurance
* Accounts receivable
* Property or chattel
* Other assets that could include bonds, term deposits
Common restrictions imposed on borrowers
Lenders may also impose some restrictions or requirements on your business to further protect their investment in your company that may include the following:
* Stipulating minimum working capital levels
* Providing financial statements at regular intervals
* Selling the company or any of its assets without consent
* Incurring new debts except as agreed
* Restrictions on guarantees by other persons involved
* Restrictions on capital expenditures
* Making loans or advances to others
* Restrictions on drawings or payment of dividends to shareholders
Other sources of funding
Organisations, such as the Business Development Bank of Canada, the Sociétés d’aide au développement des collectivités (SADC) and the Centres locaux de développement (CLD), will provide funding to new businesses.
Most lenders, whether they are banks, government organisations or private investors, require the same kind of information in your financing proposal. In most cases, the more information you provide, the better the chance that you will obtain financing quickly, which can be crucial in making the most of a business opportunity. If you have completed a business plan, you will be able to meet the requirements of most lenders.
Lending - The Basic Criteria (document)
Dealing With Your Banker & Other Lenders (document)
To learn about the pros and cons of various types of funding and to consult a self-training guide outlining the steps to obtaining growth capital, consult the following Web site http://strategis.ic.gc.ca/sc_mangb/ste
There are many regional resources available. To find out more, consult the Entrepreneurship Assistance document for your region.
Québec’s tax system is based on the principle of self-assessment – you must declare your income and calculate the taxes to be paid. If your business income exceeds $30 000, you will probably also have to collect GST and QST; if you have employees, you must declare what they are paid, make the necessary payroll deductions, and send Revenu Québec the amounts collected on their behalf within the specified time frame. To learn more about your various tax liabilities and deductible expenses, consult our Info-Guide – Taxation. (available soon)
Guide for Canadian Small Businesses – Canada Revenue Agency
To order this guide, call 1-800-959-3376 or visit http://www.cra-arc.gc.ca/E/pub/tg/rc4070/
8. Becoming an employer
You are generally considered to be an employer if:
* you pay a salary, wages (including advances), bonuses, vacation pay, or tips to your employees;
* you provide certain benefits such as board and lodging to your employees.
As an employer, you have to:
* ensure that you have a Business Number which identifies the four major Canada Revenue Agency business accounts:
o Income Tax Returns - the T2 Corporate Income Tax Return and the T2 Short Return
o Import-Export Account of the Business Number
o ARCHIVE - Goods and Services Tax (GST) and Harmonized Sales Tax (HST)
* deduct income tax, Canada Pension Plan (CPP) contributions and Employment Insurance (EI) premiums from amounts you pay to your employees
* send in these amounts along with your share of CPP contributions and EI premiums that you have to pay throughout the year on your employees\' behalf
* get a social insurance number from each employee
* report all these amounts on an information return by the end of February of the following calendar year.
In Québec, the Commission des normes du travail enforces the Act respecting labour standards, which establishes the minimum conditions of employment in the absence of better conditions provided for in a collective agreement, a contract of employment or a decree. For example, there are standards concerning:
* The minimum wage, payment, and tips
* Training periods
* Coffee breaks and meal periods
* Part-time work and overtime
* Holidays and vacations
* Sick leaves and maternity and paternity leaves
To learn about these standards and their application, consult the Web site of the Commission des normes du travail at http://www.cnt.gouv.qc.ca/en/index.asp
Workers’ compensation and occupational safety
The Commission de la santé et de la sécurité du travail (CSST) administers the occupational health and safety plan for the Québec Government. In particular, it enforces two laws:
* The Act respecting occupational health and safety, which aims to eliminate, at the source, dangers to the health, safety, and physical well-being of workers.
* The Act respecting industrial accidents and occupational diseases, which aims to provide compensation for employment injuries and the consequences they entail for workers, and to collect from employers the money needed to fund the plan.
Employer’s Guide – Payroll Deduction and Remittances –
Guide for Employers: Source Deduction and Contributions – Revenu Québec
9. Others business issues
Intellectual property (IP) refers to the creations of the mind, such as inventions, literary and artistic works, as well as symbols, names, pictures, designs and models used in business. Patents, trade-marks, copyrights, industrial designs, integrated circuit topographies and plant breeders\' rights are referred to as \"IP rights.\" Just as rights are acquired when a building or land is purchased, IP rights are \"property\" in the sense that they are based on the legal right to exclude others from using the property. Ownership of the rights can also be transferred. [Source : Canadian Intellectual Property Office (CIPO)]. For more information on IP, visit the CIPO Web site at http://cipo.gc.ca/
or consult the following documents:
Intellectual Property - IP Toolkit
Most products sold to consumers in
Canada have some type of labelling requirements associated with the product\'s content, use, warnings and claims. These labelling requirements apply to anyone who manufactures, sells, buys and/or imports products for public use or consumption. For more information, consult the following documents:
Labelling - Packaging Consumer Products (Non-Food)
Labelling - Textiles
Labelling Fact Sheet
CA Number Registration and Database
Labelling Assessment Tools
Fair Labelling Practices Program
Guide to Canadian Consumer Chemical Product Assesment
Some consumer products, such as cosmetics, toys and children\'s clothing, are regulated by Health Canada through the Hazardous Products Act. Businesses that manufacture, sell or import consumer goods should be aware of all labelling requirements regarding their products. For more information, consult the Quick Reference Guide to the Hasardous Products Act for Manufacturers, Importers, Distributors and Retailers.
Guide to the Consumer Packaging and Labelling Act and Regulations http://www.competitionbureau.gc.ca/internet/index.cfm?itemID=1248&lg=e
Accuracy Requirements for Net Quantity Declarations
10. locating your business
Chosing the location
Most businesses initially start out from leased premises rather than incurring the major capital investment of buying or constructing a new building. However, leases still constitute one of your largest expenses and usually represent a long-term commitment. As such, your signed lease agreement is a very important legal document.
Leases can vary from a simple one-page agreement to a lengthy complex document, depending on the space you are renting (e.g. mall space vs. separate building).
While your realtor can assist you in understanding the costs and basic terms of a lease, it is advisable to have a lawyer explain the legal ramifications before you sign on the dotted line. For more information, consult the following documents:
Store Location - \"Little Things\" Mean a Lot
Questions to Ask Before You Sign a Lease
Legal Issues in Starting a Business
Subscribing to public services
Electricity, gas, and telephone companies generally require a security deposit from those wishing to use their services. However, they offer special rates and services for their business clients. Many telephone and telecommunication companies also offer specialised products and services as well as business solutions adapted to your needs.
Bonds and other types of business insurance
As a safety precaution and to avoid nasty surprises, insure your company against fire and theft as soon as possible. Bonds and other types of business insurance can protect you from unexpected problems and damage. Most companies with assets should carry insurance. You should think carefully about the type of insurance you need and the amount of protection required. Be sure to do business with a company or insurance agent familiar with this type of coverage. For more information, consult our document Bonding.
Implementing a management system
Your company’s success will depend largely on your ability to efficiently manage your project. To plan and monitor your company’s activities, you should implement a management system including the following elements:
* a recognised accounting system
* a complaint management system
Depending on the type and size of your company, other elements may be added, including:
* An inventory management system
* A quality control system
* A human resources management system
Managing for Business Success (document)
Selecting Professional Services (document)
Basic Bookkeeping (document)
Info-Guide – Management and Growth (available soon)
11. promoting your business
In business, advertising is an investment that can increase your sales. The growth of your company will be affected by your ability to plan and implement an effective advertising program. To learn more about planning an advertising budget and to obtain a list of promotion strategies, consult the following documents:
Business Promotion Idea List (Web page)
Ways to Promote Your Product or Service (document)
Plan Your Advertising Budget (document)
Advertising Guidelines for Small Retailer Firms (document)
Marketing Checklist for Small Retailers (document)
Profit by Your Wholesaler\'s Services (document)
Do You Know the Results of Your Advertising (document)
Invite Your Trade Show Prospects (document)
Guidelines for Developing a Company Brochure (document)
Signs and Your Business (document)
The Signet entrepreneurial is an initiative from the Association des centres locaux de développement du Québec, the ministère du Développement économique, de l\'Innovation et de l\'Exportation (MDEIE), the Fondation de l\'entrepreneurship and Mouvement Desjardins. This tool helps entrepreneurs by guiding them towards essential Web sites for starting or running a business. http://www.entrepreneurship.qc.ca/fr/accueil/signet.asp
(In French only)
eBusiness has the potential to help you improve your business processes through accelerating and enhancing customer service, increasing sales by providing alternative sales and marketing channels, promoting product, service and company information, and by reflecting a modern image. To find out more about setting up an eBusiness, consult our document Info-Guide – eBusiness.
13. Additional Resources
Online Small Business Workshop (OSBW)
The Online Small Business Workshop (OSBW) is a Web-based workshop designed to provide you with techniques for developing your business idea, starting a new venture and improving your existing small business. For more information, consult our document Online Small Business Workshop - OSBW or visit Online Small Business Workshop.
Business Start-up Assistant – Canada Business
This service provides information about essential points that will help you develop your business, including market research, business name and structure, preparing a business plan, financing, taxation, hiring employees, and doing business on the Internet. http://sade.rcsec.org/gol/bsa/site.nsf/en/index.html
Cheminement de démarrage – Québec Government
This section of the Québec Government Services for businesses portal provides a list of the steps necessary to start a business as well as a list of specific requirements for various sectors of activity. http://www.entreprises.gouv.qc.ca/portail/quebec/?lang=en
Consulting – Business Development Bank of (BDC)
The Business Development Bank of Canada (BDC) provides customised consulting solutions to meet the complex challenges faced by today\'s Canadian entrepreneurs. Whether it\'s through individual consulting, group training, or a combination of both, BDC\'s Consulting Group (CG) helps innovative Canadian businesses succeed. These services are often combined with financial services to help Canadian businesses prosper in today\'s global economy. For more information, consult our document BDC Consulting, call the BDC at 1-877-232-2269, or visit the Web site at http://www.bdc.ca/en/home.htm
We hope the information provided in this Info-Guide has been helpful to you. Many other interesting documents, tools and links may be found on our Web site.
If you need more information about business-related subjects, our agents are available to provide you with free information about federal, provincial, and municipal government programs, services, and regulations as well as some programs and services offered by the private sector.
We offer you a free library research service as well as access to data bases and Web sites of interest to business people. Our information specialists are at your disposal to answer your requests for strategic information.
Don’t hesitate to contact Info entrepreneurs at 514 496-4636 or Ressources Entreprises at 418 649-4636. In the regions, call 1-888-576-4444.
* Info-Guide – Export
* Info-Guide – Multimedia, Culture and Communications
* Saguenay Lac Saint-Jean – Entrepreneurship Assistance (Region 02)
* Abitibi-Témiscamingue – Entrepreneurship Assistance (Region 08)
* Financing a Business
* Montreal – Entrepreneurship Assistance (Region 06)
* Mauricie – Entrepreneurship Assistance (Region 04)
* Info-Guide – Import
* Laurentides – Entrepreneurship Assistance (Region 15)
* Entrepreneurship Assistance – Lanaudière (Region 14)
* Social Economy – Financing and Technical Resources
* Info-Guide – Women Entrepreneurs
* Outaouais – Entrepreneurship Assistance (Region 07)
* Info-Guide – Cooperatives
* Bas-Saint-Laurent – Entrepreneurship Assistance (Region 01)
* Info-Guide – Employment and Training
* Centre-du-Québec – Entrepreneurship Assistance (Region 17)
* Entrepreneurship Assistance – Laval (Region 13)
* Info-Guide – Innovation / R&D
* Info-Guide – Not-for-Profit Organisation (NPO)
* Info-Guide – Permits and Licences Required for Certain Types of Businesses
* Info-Guide – eBusiness
* Côte-Nord – Entrepreneurship Assistance (Region 09)
* Nord-du-Québec – Entrepreneurship Assistance (Region 10)
* Entrepreneurship Assistance – Chaudière-Appalaches (Region 12)
* Info-Guide - Aboriginal Entrepreneurs
* Montérégie – Entrepreneurship Assistance (Region 16)
* Estrie – Entrepreneurship Assistance (Region 05)
* Gaspésie–Îles-de-la-Madeleine – Entrepreneurship Assistance (Region 11)
* Info-Guide – Young Entrepreneurs
* Entrepreneurship Assistance – Capitale-Nationale (Region 03)
Business Resource Link