Do I need license(s) or permit(s) for my business?
Certain business activities require a permit or license, generally granted by government (federal, provincial or municipal). To determine whether you need to apply for a permit or license, inquire with the Canada Business at (888) 745-8888 or access the BizPal website or contact the Waterloo Region Small Business Centre.
Always check with your municipality for business licenses, permits and zoning bylaws specific to your business or industry.
Once you have registered your business name, you will receive a Master Business License from the Ontario Ministry of Government and Consumer Services.
What government financing is available?
There are many government financing programs for businesses, generally targeted to specific industries, geographical areas or particular groups of entrepreneurs. Almost all financing programs consist of loans. There are very few grants available. However, they do exist for the arts/culture industry. One of the more common financing programs is Canada Small Business Financing(CSBF), a loan that is guaranteed by the Government of Canada in the event of a default on the loan.
What is a business number (BN)? A Business Number relates to a business, as a Social Insurance Number (SIN) relates to an individual. CCRA issues this nine-digit number when you register for any of the four CCRA accounts:
• payroll deductions (income tax, Canada Pension Plan, Employment Insurance)
• corporate income tax
This number is designed to simplify and streamline interaction with CCRA. Related information is available at the Canada Business Web site.
PS: A Business Number (BN) is not to be confused with a Business Identification Number (BIN). If you register your business name, you will receive a Business Identification Number as part of your Master Business License from the Ontario Ministry of Consumer and Business Services (see "How do I legally register a business?").
What taxes do I have to collect?
You may have to collect GST/HST (Harmonized Sales Tax) as follows:
HST: If your gross revenue (total sales before expenses) is $30,000 or more in any twelve-month period, you must register for HST in Ontario. Most goods and services are taxed at 13%. If your gross revenue is less than $30,000, then you may voluntarily register for and charge HST.
When making this decision, consider:
• Will it be an accounting hassle? For some, particularly those using a manual bookkeeping system, accounting for HST means another two columns to balance.
• If you do not charge HST, you will not be able to take advantage of the Input Tax Credit. This allows you to deduct HST you have paid from that which you have collected.
• Not charging the HST will inform everyone that your gross sales are less than $30,000.
• If your clients are other business owners they will expect to pay HST to receive the Input Tax Credit
• What are your clients used to? Do your competitors charge the HST?
For more HST information, contact:
Canada Revenue Agency (CRA)
333 Laurier Avenue West
Ottawa, ON, K1A 0L9
Tel: (800) 959-5525.
CRA conducts FREE HST seminars and other CRA issues. Call the preceding phone number for information and registration.
Can I "write-off" my business expenses?
You can generally deduct business expenses - if they are incurred to produce income. If you claim expenses, you must be able to back up your claim. You do this by keeping all your business-related vouchers and receipts, and by recording all your expenses in a journal.
Examples of expenses you can deduct:
• accounting/legal fees
• advertising expenses
• professional fees and dues
• license costs
• interest and bank charges
• meals and entertainment
• maintenance, repairs and vehicle expenses
• use of a workspace in your home
• inventory and costs of goods sold
Related information is available at the CanadaBusiness web site. See also the CRA's "Business and Professional Income T2125 " tax guide.
Should Your New Hire be an Employee or a Subcontractor?
Congratulations! Your business is growing - new customers, new assignments - things are looking pretty good. But how are you going to get this all done? You wish there were more than 24 hours in a day but there aren’t. You know you need to bring someone on board to handle this extra work but should it be an employee or a subcontractor?
More and more businesses are hiring subcontractors instead of employees for several reasons:
• no CPP, EI or other benefits to be paid;
• there is no severance to be paid if the person is not suitable;
• less payroll administration is required;
• some prefer to be a subcontractor in order to claim additional expenses.
Revenue Canada though, has a keen interest in this issue as it affects the government’s cash flow in terms of taxes, CPP and EI collected. So, when does Revenue Canada consider a subcontractor an employee? It depends upon the facts. See Canada Revenue publication “Employee or Self Employed “
It is important to determine whether a worker is an employee or self-employed. However, over time the following tests have been developed by the courts to settle this issue:
1. The Organization Test - is this person going to be part of the organization and act like an employee?
2. The Control Test - will you determine what, how and when this person will do the work?
3. The Specific Results Test - will the person be asked to provide a variety of services on an ongoing basis versus performing a specific task with a specific completion objective?
4. The Economic Results Test - will you provide the tools? Are you taking all of the financial risk and accepting liability for the work?
If you answered yes to any of the above questions, then the person you are looking to bring on board may be an employee and not a subcontractor. Not getting it right could have financial penalties for you as the employer. If there is any doubt, it is worth your time and money to consult with an accountant or lawyer.
How Can I Choose A Great Domain Name?
Choosing the right domain name is one of those “little things" that can make a big difference in your Internet Marketing. Having the wrong domain name can cost you countless numbers of visitors and PR issues; something a small business cannot afford to lose. The good news is that this is one of the quickest and easiest things you can do to give your Internet Marketing efforts a big boost.
Here are 7 key factors to consider when selecting the domain name for your small business:
Domain Name Factor #1: Memorable - Your domain name is something that should be prominent in all of your marketing efforts. That means it needs to stick in people’s minds if you want them to remember to go to your site.
Domain Name Factor #2: Easy To Spell - Let’s face it…we aren’t all great spellers. And to make things even more complicated, there are many words with multiple spellings: “centre” or “center”, “color” or “colour”, “red” or “read”? ”BoatsRUs”…is that “r” or “are”? If you really need a word in your domain name that has multiple spellings, then plan on buying multiple domain names to cover each spelling. You can point the alternate spelling domain names to your main one.
Domain Name Factor #3: Passes the "Radio Test" - This factor really came home for me when taping a radio commercial a few years back…because the radio compresses the audio range; you have to speak with exaggerated “ups and downs” in your voice just to sound normal.When speaking your domain name, it needs to be clearly understood. Some words are more prone to being muffled or garbled than others. For example: The word “the” is very easily “deleted” when people hear it.
Domain Name Factor #4: The Right Domain Extension (.ca or .com or .org) Extensions are the “.com” part of a domain and there are many to choose from. Some popularly seen ones are: .com, .biz, .ca, .org. Which should you get? Here the rules of thumb:
1. Get the .com.
2. If you operate a Canadian company with a local or regional trade area, then get the .ca and use it as your primary one. Point the .com version to it.
3. If you operate a not-for-profit or similar business then get the .org and use it as your primary one. Point the .com and .ca versions to it.
4. All other domain name extensions are optional and shouldn’t be used as your primary domain name.
Domain Name Factor #5: Reinforces Your Branding - Your domain name needs to be consistent with your branding and positioning. Your domain name does not need to be your company name, but will become something like a “second business name”. Domain names often become secondary trading names because they’re so prevalent in our marketing. Instead of telling people to physically go to “Sam’s Hardware” down the street, people will say “go to ‘bigtownhardware.ca’”
Domain Name Factor #6: Passes the "Business Card Test" - Business cards are small and you have a limited amount of room to work with for the design layout of your card. Your Email address (which your domain name is part of) will likely be the longest piece of information for the card, so you want to keep it short.
Domain Name Factor #7: Keywords - Keywords are the words and phrases that people would type into a search engine to look for your product or service and having keywords in your domain name is a big help for showing up high in search engine results. However, only get keywords for your domain name if it makes sense. Don’t sacrifice your brand positioning for keywords; there are other ways to get your keywords into your site.
What to Do If You Don't Have A Great Domain Name?
OK…so how does your current domain name stack up? Is it time to get a new domain name?
Unless you have a website that is receiving large amounts of traffic (thousands of visitors a month), it's probably a good idea to change your domain name if it doesn't measure up. It is also possible to switch from one domain to another in a way that visitors going to your old site, they'll be automatically be redirected to your new site
Young businesses often face the age-old dilemma of finding the money to spend on advertising. You know you need to spend money to bring in customers, but you don't have the money to spend until you get those customers. The fact is, you do have to spend something the good news is, and you don’t have to spend an arm and a leg. With a little creative thinking, and some effort, you can spend a lot less money and still make an impact. You must, however, be prepared to spend more time. That’s the trade-off. If you have unlimited cash, you can buy advertising. If your financial resources are limited, you will have to spend more time on marketing. A good place to start is with a marketing plan.
A good marketing plan means setting goals, planning strategies and preparing budgets for both time and money. Strategic assessment of your marketing needs allows you to make the most of buying opportunities, discounts, volume pricing etc. It also helps to keep you focused. In order to make sure that you are making the most of the minimal budget which you have, you will always have to maintain a focus on who your target customer is. You will have to assess every advertising/marketing opportunity out there to determine if it will hit your target audience and if it is cost effective.
If you do decide that an opportunity is a wise investment for your business, make sure that you also take the time to get the most exposure from it as you can. In other words, advertise the advertising. If you have taken out a website – let people know about it by putting it on your signs and business cards and in your ads. If you are having an event – send out a press release, put signs in your windows, on your website, send emails out to your customers and get out to networking events to let people know about it.
Using other businesses to help market yours is another great way to stretch your advertising dollars. Teaming up with other entrepreneurs with whom you share a target market will create extra business for each of you. You will also be able to refer and promote to each other through website links and by showcasing each other’s brochures and business cards.
Keeping your existing customers happy is also a good way to increase sales. Happy customers will not only be repeat customers, but they will bring in new customers by their referrals. Their testimonials will help market your business. Everyone likes to do business with people that have been recommended.
And remember - bigger is not always better. Don’t put on a big show and blow the budget on one campaign or event and then have nothing left to follow it up with. The key to a good marketing plan is consistency and frequency. It is far better to find several small ways to keep your name out there over a longer period of time.
For some good marketing ideas, check with your competitors – What is working for them? What is not? What does their budget look like? Copy good ideas, adapt others and learn what mistakes to avoid. Networking events, websites and business consultants are also excellent sources for inspiration and advice. But the bottom line is that you are the best judge of what you can afford. It takes a combination of both time and money to make a name for your business. How much of each is up to you. The worst thing that you can do is - to do nothing.
One of the most important things to remember with marketing is that you can’t manage it if you can’t measure it. Tracking your results will make sure that your efforts are paying off. Use feedback forms, draws, coded coupons, a database etc to keep track of your marketing successes and failures. This can save you money and time.
Focus on your customer. Targeted marketing is far more cost effective than mass marketing.
Concentrate on one clear message. It must be easily understood and identified as a benefit to your targeted customer and quickly.
Be consistent. All of your marketing materials should look as if they are from the same company to be effective. Consider using a catchy tag line.
Don't stop marketing when cash flow is poor. That’s when promotion is most important. Get creative and get the name out there!
Seek out help where it is free and freely given first, before paying the big bucks. There are many sources of online help and government sponsored resources like the Waterloo Region Small Business Centre. If you are unsure where to get the help you need – Call us. If we can’t help you, we will know who can!
If you run your business from home, your homeowners' or tenants' insurance may not cover the portion of space you use for business.
There are several types of insurance for business:
• loss of physical assets
• liability to a third party
• business interruption
• loss/illness of key staff
You may want to insure against any or all of these situations. Speak with an insurance company or a broker about your particular needs. As well, many trade and networking associations offer group insurance plans to their members. The Contact information for these associations is available in the Directory of Associations in Canada in our Resource Centre.
Registering a business most often refers to registering a business name. In Ontario, it is a legal requirement to register your business name, if you are operating a sole proprietorship (1 owner) or partnership (more than 1 owner), under a business name other than your exact legal name. If you are registering a partnership; we strongly advise legal advice to prepare a partnership agreement.
There are 5 ways to register your business name:
i) From the Internet at the Waterloo Region Small Business Centre: Registering costs $60.00. Delivery of the Master Business License is same day. The cost of registration plus a name search is $68. Payment is by Visa, MasterCard or American Express card only. Staff are available to assist with questions
ii) From the Internet via Service Ontario:
Immediate registration (which can be printed off from your computer) if done between the hours of operation 8:30am to 6:00pm Monday to Friday, for a fee of $60.00 payable by credit card (Visa, MasterCard or American Express). If registration is completed during regular business hours a Master Business License is printed off from your computer right away, followed by an electronic savable copy which can then be printed off when needed) within 2 business days if a valid email address is provided. If an email address has not been provided, a copy will be mailed to you within 10 business days. If done outside the hours of operation or on statutory holidays or Remembrance Day, allow up to 2 weeks for delivery of the Master Business License. A name search can also be done online for a fee of $8.00. However, Name searches are not available with this method of registration. As well as registering or renewing a business name, you can also register from this site the following: How do I legally "register" a business? What kind of insurance should I get for my business?
Ontario Employer Health Tax
Ontario Workplace Safety and Insurance Board
Federal Payroll Deductions
Federal Import / Export
Federal Corporate Income Tax Account
iv) From the internet at a Service Ontario location computer terminal.
To find the closest Service Ontario location, Small Business Enterprise Centre or Public Computer near you see “Service Locations Finder”. Service Ontario location will accept cash from those registering a Master Business License and costs $60. Searches of sole proprietorship, general partnership and corporate trade names are available at the workstations for an additional $8 per name. Small Business Enterprise Centres and Public locations accept Visa, MasterCard and American Express only.
v) By mail
Mail registration requires “Form 1" (Registration under the Business Names Act - Sole Proprietorship/Partnership), takes 2-4 weeks and costs $80. This form is available at the Waterloo Region Small Business Centre or online at Service Ontario.
Registering a business name does not give you exclusive rights to the use of that name. You can conduct a name search of existing sole proprietorships and partnerships in Ontario to avoid duplication. However, a name search is optional, since sole proprietorship and partnership names are not protected. To protect a business name you must incorporate or apply for a trademark.
Related information on registering a business name or partnership is available at the Service Ontario web site.
What are the types of Business Registration?
There are many advantages and disadvantages associated with various methods of business registration. More information on proprietors, partnerships and incorporating is available at the CanadaBusiness web site:
Incorporation is another form of business registration. You must incorporate if you wish to operate your business as a corporation (a separate legal entity). You can incorporate provincially or federally. If you want to name your corporation, you must conduct a NUANS name search to verify the name availability.
A cost is associated with this service. Provincial incorporation costs $360 plus the cost of forms (print them from Service Ontario website) forms can be mailed or filed at the Provincial Courthouse (Land Registry Office). You can also incorporate on-line through Oncorp or Cyberbahn. The cost for on-line filing is $300, plus the service provider's fee. Payment can be made by credit card or by setting up an account. More related information is available in the Service Ontario. If you have more than one shareholder (partners) we strongly advise legal advice to prepare the shareholders agreement.
Federal incorporation costs $250 if filing at Corporations Canada and $200 if filing via the Internet from the Corporations Directorate Electronic Filing Centre. More related information is available in the CanadaBusiness.ca and in the Corporations Directorate's Small Business Guide to Federal Incorporation.
If you are unsure whether to operate as a sole proprietorship/partnership or a corporation, consult a lawyer and an accountant. Each operating structure has different legal and tax implications. For more information about the different types of business registrations and a brief video go to Corporation Centre.