So, you want to start your own business? This page is intended to help you in doing just that! It outlines the basic steps you will need to follow. You can use it as reference guide and as a supplement to your additional research.
One of the key things to remember throughout the process of starting your own business is to keep yourself informed of sector-related issues. For example, you will want to research the demographics you wish to reach and look into marketing methods for your area and business (what are your competitors doing?). This information will make a difference in the success of your business.
There are many avenues of research available to you such as reading related materials, getting information from the web, talking to people in the industry/business, talking to potential clients and contacting the Canada Business Services for Entrepreneurs.
We hope you find this information useful. We wish you good luck!
2. Before you start
Before you can start anything it may be a good idea to think over a few things such as:
Are you ready to run your own business?
Do you have any business training?
Are you prepared to sacrifice the time, money and effort necessary to make your business work?
Most businesses generate little income in the beginning. Are you able to survive without income for a period of time or do you have another source?
Do you have the location, equipment and resources necessary or are they easily available to you?
3. What do I do first?
You will need to decide what kind of legal structure you will use for your business. There are four main forms of legal structure for businesses:
Sole Proprietorship – this means you are the only person responsible and that you personally are not legally separated from your business. You get the benefit of all the profits and make all the decisions and it is relatively inexpensive to set up when compared with the other forms. The disadvantage; however, is if someone sues your business, they are suing you and you are liable. As well, you must cover all costs and the work, and any income is included on your personal income tax.
Partnership – This is where several people go into a business together. It is almost the same as a sole proprietorship; however, there is more than one person to take responsibility, as it is a joint effort. There should be a formal written agreement outlining each partner’s responsibilities and commitments.
Cooperative – This form of business is when a group of people come together (minimum of 5 people) to create a business to satisfy a common need. They operate democratically through two governing bodies, the board of directors and the general meeting of the members. Start up costs are usually obtained from the shares purchased by the members and each member’s liability is determined by the amount of shares they hold. There are three types of cooperative: workers, producers and consumers.
Incorporation – Although incorporating involves higher start-up costs, increased paper burden and requires more personnel resources, there are benefits to incorporation. By incorporating, you receive benefits of having your business as a separate legal entity, which limits liability of the directors and shareholders. Creditors cannot sue shareholders although directors may be held somewhat liable. The benefit of lower corporate tax rates is also a benefit to incorporation. One of the biggest benefits of incorporation may be the fact that it is easier to raise capital than it is for the other forms of business.
The type of business structure you decide on may be influenced by the following:
Personal Liability – how much liability do you want if the business runs into problems;
Taxation – each form has a different level and type of taxation;
Experience – Do you know enough to start a business on your own or will you want to have others to help you with their expertise.
Once you have decided on the business you want to start, you should do some research into that business sector which you want to be involved. Research should be done to identify your target market and the demand for the product, etc. as well as the best location for your business.
4. I know what kind of business to start, what next?
Once you have decided on the kind of business you want to start, you will need to develop a business plan to lay out your thoughts, ideas, information and finances. A business plan is necessary to tell you if your idea is feasible. It also lets potential investors know that you are serious about starting a business and where you intend to spend their money. The business plan also acts as a reference guide for yourself when you are setting up your business. A business plan will generally include information on the following areas:
Executive Summary/Business Description
Project Costs and Project Funding
Personnel, Training or Skills Assessment
For more information on Business plans and sample plans, consult CNBSC document Business Plan Guide or use the Interactive Business Planner on the Internet at www.canadabusiness.ca/eng/.
5. I’ve got a great idea but how can I finance it?
There are several places where potential business owners in Nunavut can go to obtain financing. Keep in mind that all agencies look at a mix of your own equity (cash and sweat equity), loan monies as well as grant/contribution monies (non-repayable equity). You can find a complete list of financial sources here.
6. I have the plan and the money, what else do I have to do?
If you want to run a business, there are specific regulations to follow and licensing you must acquire. These regulations will vary depending on the type and location of your business but there are several mandatory requirements. Information on this and further registry information and contact information can be found on the Regulatory and Licensing Agencies Info-Guide web site or the Canada Business Services for Entrepreneurs.
- Municipal Licensing, Zoning and Bylaws - If you intend to establish your business within a community that has Hamlet, Village, Town or City status you must receive a business license from the local municipal office. You must also look into whether or not there are local zoning or bylaw restrictions to where you want to set up your business. For more information contact your municipality.
- Workers’ Compensation Board – You are required to obtain a Certificate of Compliance for employees and employer before you may start your business. You must also get other operating licenses, for example, an Outfitting License. To register, contact the WCB.
- Registering your Business – All business and non-profit organizations that wish to operate in Nunavut must be registered with Nunavut Legal Registries.
- Business Number – You may wish to obtain a BN to simplify and streamline the way your business deals with government. The BN includes the four major Revenue Canada business accounts: corporate income tax, import/export, payroll deductions, and GST/HST. More details can be obtained from Canada Customs & Revenue Agency.
- Payroll Tax – This is a tax on income that employers must collect. A business in Nunavut must register for this within 21 days of paying an employee. More details can be obtained from the Department of Finance and Administration.
- Municipal Business Tax – Some communities may require you to pay a business tax usually based on a certain percent of the rental value of your business facility. Contact your local municipal office for more information.
There are also several things that are not required but are recommended:
- Insurance – You may need liability insurance and Title insurance to operate. Prices vary depending on the type and size of your business. Contact your local insurance company for more details.
- Business Specific Requirements – Depending on the type of business that you are starting, there may also be additional requirements in the form of licenses and permits required. For example, businesses that serve food will require health inspections and fire inspections. Someone who wants to do outfitting will require an outfitters license.
- Labour Standards - When starting a business it is important to know the legislation that legally determines the minimum employment standards for employees. The purpose of this Act is to describe the rights and responsibilities of employers and employees in Nunavut. The Act also describes procedures for investigating complaints. The role of the Labour Standards Officer is to mediate and when required provide a decision concerning disputes between employers and employees involving rights and responsibilities. For more information contact the Department of Justice.
- Safety Requirements - When starting a business it is important to know the regulations that affect your employee's safety. More details can be obtained by contacting the Worker's Compensation Board.
There are also general health, fire and safety requirements which should be looked into before opening your business. For fire and general safety requirements, contact the Office of the Fire Marshall . For health regulations pertaining to your business, contact the Department of Health and Social Services.
- Property Rental – If you plan to rent your business space (or alternatively, run a business renting properties), you should contact the rental office which acts as a source of information and provides services to both landlords and tenants at no cost to either party.
- Incentive Registrations– there are registries which a business that wishes to do contracting may register with to receive incentive.
- Nunavummi Nangminiqaqtunik Ikatuji (NNI) – This program is a policy of the Government of Nunavut (GN) that gives contracting an incentive (bid adjustment and labour bonus) to assist local, Nunavut and Inuit firms so that they can provide goods and services to the GN and the general public at reasonable prices. More details can be obtained by contacting the Department of Public Works.
- Inuit Firm Registry (Article 24) – Under Article 24 of the Nunavut Land Claims Agreement, there is provisional encouragement given to governments to provide preferential ratings to Inuit-owned and operated businesses in Nunavut when tendering contracts. The NTI provides the Inuit Firm Registry as a list of recognized Inuit Firms under Article 24. To register, contact NTI.