Starting a business in Canada

Step-by-step guide to starting a business in Canada

Here’s a clear, practical step-by-step guide to starting a business in Canada, with the most useful federal resources and common funding options (grants, loans, advisors).

1) Validate the idea (quick & cheap)

  • Do simple market research: talk to 10–20 potential customers, run a quick survey, check competitors, estimate pricing and margins.
  • Build a one-page value proposition (who, problem, solution, why you’re different).
  • Quick resource: use the federal Planning a business guidance for market research & planning. (Government of Canada – Planning a Business)

2) Choose your business model & structure

  • Pick a legal structure: sole proprietorship, partnership, or corporation. Each has tax, liability and paperwork differences (e.g., corporations offer liability protection but cost more to set up).
  • Read Corporations Canada if you plan to incorporate federally (steps and fees).
    For provincial incorporation, check your province’s registry. (ISED Canada)

3) Write a compact business plan

  • Include: target market, product/service, revenue model, startup costs, 12-month financial forecast and 3-year plan, and marketing plan.
  • Keep it concise (8–12 pages). Use it to apply for funding and to guide early decisions.
  • Include what you expect for monthly income and expenses to budget your cash flow.

4) Register the business & get tax accounts

  • Register business name and get a Business Number (BN) from CRA if you’ll have employees, collect GST/HST, import/export, or need a payroll account.
  • Register federally or provincially depending on your structure and where you operate.
    Guidance and checklists are on Canada.ca. (Canada)

5) Licences & permits

  • Use the federal and provincial licence finders to identify municipal/provincial permits (food, construction, professional licences, signage, health, environment).
  • Do NOT assume you don’t need a permit — check local municipality. Canada.ca starting pages link to permit information. (Canada)

6) Open a business bank account & put bookkeeping in place

  • Open a business bank account and pick accounting software (QuickBooks, Xero, Wave).
  • Set up a simple bookkeeping routine and separate business/personal finances.

7) Insure the business & protect IP

  • Get business liability insurance; consider property, cyber, professional liability and directors’ & officers’ insurance depending on risk.
  • Trademark your name/logo if it’s core to the business (see CIPO/IPO).

8) Build your minimum viable product (MVP) & sales plan

  • Launch a low-cost MVP (landing page, simple product version, pop-up store).
  • Focus on first 10–50 customers and iterate based on feedback.

9) Hiring, payroll, contractors

  • If hiring, register for payroll with CRA and ensure you’re compliant with payroll remittances and employment standards (provincial).
  • For contractors, use written agreements and (where applicable) T4A reporting.

10) Scale, measure & iterate

  • Track key metrics (revenue, gross margin, customer acquisition cost, LTV).
  • Revisit plan quarterly and update forecasts.

Canadian Business Funding options

Grants, contributions & program finders

  • Business Benefits Finder — quick, personalized way to find federal programs and grants relevant to your business. (Innovation Canada)
  • Government grants & funding hub — central listing of federal grants and funding. Use the finders to filter by sector and region. (Canada)

Common federal / national funding & supports

  • Canada Small Business Financing Program (CSBFP) — loan program that shares risk with lenders to help small businesses get loans for assets and leasehold improvements (loan limits apply). Good for equipment and working capital when banks want more security. (ISED Canada)
  • Business Development Bank of Canada (BDC) — financing (term loans, growth loans) and advisory services tailored to SMEs. BDC is a key lender for scale and growth loans. (BDC.ca)
  • Regional development agencies (e.g., FedDev Ontario) — region-specific funds and supports for innovation, productivity and market expansion. Check your regional agency for targeted calls and programs. (FedDev Ontario)
  • Futurpreneur — start-up loans and mentorship for young entrepreneurs (typically under 39). (Good for early stage founders.) (search locally for eligibility)

Innovation / R&D funding

  • NRC IRAP, Mitacs, provincial innovation grants — for tech, R&D, and university-linked projects. These programs are competitive but can cover a portion of R&D costs (useful if you’re product/technology-focused). See federal innovation supports pages. (ISED Canada)

Canada Digital Adoption Program (CDAP)

  • CDAP has supported many businesses with digital adoption grants and loans, but parts of the program have closed to new applications, and its availability has changed since launch — check the official CDAP and federal pages before assuming it’s open. (BDC.ca)

Loans, equity, and alternative funding

  • Commercial banks and credit unions: traditional term loans, lines of credit.
  • BDC: for flexible small-business loans and growth finance. (BDC.ca)
  • Angel investors / VC: for high-growth startups; expect to give up equity.
  • Crowdfunding (Kickstarter/Indiegogo) and revenue-based financing become options depending on product and traction.
  • Community Futures (rural support) and local economic development offices often have micro-loan programs.

Where to get advice and one-on-one support

  • Canada.ca — Starting a business: federal guidance on the whole process. (Canada)
  • Business Benefits Finder (tailored program suggestions). (Innovation Canada)
  • BDC — financing and advisory services for planning and growth. (BDC.ca)
  • Regional/provincial small business centres — local mentorship, courses and networking (search “[your province] small business centre”).
  • Incubators/accelerators — if you’re a tech or high-growth startup.

Quick checklist (first 30 days)

  1. Validate idea with 10 customer interviews.
  2. Pick legal structure + name.
  3. Write 1-page business plan & 12-month cashflow.
  4. Register business and apply for BN with CRA. (Canada)
  5. Open business bank account and set bookkeeping system.
  6. Identify required licences/permits and start applications. (Canada)
  7. Explore funding: run your info through Business Benefits Finder and contact BDC or a chartered bank for loan options. (Innovation Canada)

Practical tips & common pitfalls

  • Separate finances from day one. Mixing personal and business money causes tax headaches.
  • Don’t over-rely on grants. Grants are competitive and often partial, plan for loans or owner capital. (Use grants to top up, not as the whole plan.) (Canada)
  • Document customer validation. Funders and partners will ask for evidence of demand.
  • Watch deadlines for programs. Programs open and close (CDAP is an example of changing availability). Always confirm program status on the official site. (BDC.ca)
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