Starting your own small business can seem quite challenging, especially if you’re not sure where to start. Luckily, there is plenty of expert advice out there to help you get started on the right foot, so you can begin building a successful and sustainable business model from the start!
Here are 9 of the best tips that everyone should read before starting a small business:
The 9 things you should know before starting your small business
1. Being financially able to start a business is essential
First things first: Are you financially ready to start your business? This is a very important question to ask yourself before you dive in. Securing financing, proper budgeting and taking the time to develop financial projections will help you ensure that you are ready to take the plunge.
Having enough funding for at least 3 months is recommended so that you can feel confident about finally opening your business. You will likely need to inject plenty of capital into the business in the beginning stages, so do the legwork to determine how much you will need, and where these funds will come from, before you start. .
2. There are 3 main business structures
There are three primary business structures to be aware of in BC:
1. Sole proprietorship
This means starting a business on your own, typically in your name. You would be self-employed and would be responsible for all aspects of running the business.
2. General Partnership
A general partnership involves two or more partners. You would both/all be liable for any issues that arise, and for generally building the business.
An incorporated business is a separate legal entity. This means that, except for a few rare circumstances, you are not personally liable for any issues or debts of the company..
A small business lawyer can help business owners determine the best share structure for their business.
3. Have a business plan
Having a business plan will keep you organized in terms of growing your business and having a successful company. The business plan describes the business, what services you provide, how you will earn money, who your competitors are, etc. This is an essential guide that will help you with your business start-up. Have a physical business plan to refer back to keep all of your thoughts and ideas organized.
4. Your business’ name matters
The name of your business should be something that either resonates with you, describes what you do, or is memorable.
5. You need to register your business
Registering your business will give you a Business Number (BN) that is used for tax purposes, payroll, GST, and any other federal accounts you may need. Registering your business will secure your business name as well.
5. Business bank accounts are required for business banking
Unless you are operating as a sole proprietor, you will need a set up a separate bank account for your business. Even as a proprietor,having a separate business bank account can be a good idea, as it can make it easier to properly manage your personal and business finances.
6. Payroll and taxes must be done accurately
Keep track of your payroll! To ensure your employees are being paid correctly and on time, it is important to have a structured payroll system. First, figure out how much money your team will be paid. Have every employee fill out their tax forms and ask for the correct payment or direct deposit information for their payment. Ensure that you are using a website, software program or other system to help you calculate the proper payroll deductions.
Register for Provincial Sales Tax (PST) and Goods and Services Tax (GST) if required. If you aren’t sure if you should be charging tax, check with your accountant. .
7. Laws and regulations in BC will affect your business
There are many different laws and regulations your business has to follow. Your small business lawyer can help you determine which ones apply to you. Failing to follow required regulations could result in penalties or even termination of your operations, so make sure to find out any steps you may need to take once your business is set up.
8. Having the correct insurance will protect your business
There are many different types of insurance that you might need for your business. You can review them in our recent blog.
9. Review the Employment Standards Act
The Employment Standards Act BC is crucial to know when starting a small business and hiring employees. Treating your employees fairly is not only required, but should be a priority for any business owner. Before your first hire, make sure you know the rules around minimum wage, hours, vacation or time off policies, and employee termination. Your small business lawyer can help you prepare an employee contract to ensure both you and your employee are protected.
Are you in the process of starting a small business and need to consult with a lawyer? Get in touch. We are here to help.