Myths About Starting a Small Business

Here are some of the most common myths about starting a small business in Canada.

Myth 1 – Starting a small business will let me write off all my expenses.

You’ll never be able to “write off” all of your expenses. Some things don’t qualify as a business expense, and in some cases you can only claim a portion of the expense or claim if a particular circumstance applies.

Myth 2 – I don’t have to register my business if it’s small.

Registering your business is a requirement when you’re starting a small business in Canada; it has nothing to do with the size of your business.

Myth 3 – If I’m not selling much it doesn’t count as a ‘real’ business.

Like Myth 2, this idea is based on the belief that the size of your small business matters. Whether you sell a lot or not, the government expects you to declare the income and follow the regulations that a legitimate business must follow.

Myth 4 – I don’t have to charge and remit taxes if I’m selling online.

Just like a business with a storefront, you’re responsible for collecting and remitting GST/HST if you’re selling GST/HST taxable products or services over the internet.

Myth 5 – There are lots of tax breaks for people who start home-based businesses.

Home-based business owners can claim some of their expenses; however they can only claim a portion of these expenses based on business use.

Myth 6 – There are lots of government grants for people starting small businesses.

Government grants are rare, and the few that do exist are for specific groups or regions.

In reality, the independence and satisfaction of turning an idea into a successful business is very rewarding. 

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Marketing Your Small Business Effectively

Marketing your business is a very important part of earning new clientèle and keeping your current customers. While marketing seems like an easy step in every business plan, many people squander their marketing money by hitting the wrong targets. Not all marketing plans are created equally, and the details of your marketing plan should stem from your current relationship with your customers and your target client base.

What is marketing?

Marketing is the act of promoting your business in a way that positively reflects your products or services. Marketing is an important part of every business venture because it encourages people to use your business. While many are satisfied with their client base, reaching new clientèle is the best way to grow your business without making changes to your financing strategy and revenue channels. Marketing is a robust tool, and many people market their businesses differently.

Ways to market your business

There are multiple ways to market your business because there are many platforms by which you can promote your business. Advertising using radio, television, mail and social media are all viable forms of marketing, however marketing and advertising are not the same thing. Advertising is promoting your business through one medium. Marketing is the sum of all advertising and non-advertising channels your business utilizes to promote its business. Certain forms of marketing are very cheap and nearly every business uses them. These are social media and blogs or websites.

Businesses often use social media today to promote their business. The main objective of a social media account should be to direct people towards your business’ website/blog. The website or blog is a focused advertising tool that can be used to inform your clientèle about your business and create a relationship with them. Websites are more expensive than social media because a domain name costs money and sometimes professional assistance is required to maintain and update a website.

Advertisement based forms of marketing tend to cost more money, but can be used to reach a different client base. Most marketing is achieved through multiple streams of advertisement, such as radio commercials and ads in the local paper. Keep in mind that marketing is not the same thing as advertising. That being said, you can market your business relatively well without using traditional advertisements. As such, any form of positive interaction with potential clientèle can be used to grow your business. This can be achieved by offering workshops at your business, attending charity events as a business entity and asking customers for feedback about your business and the products/services you offer.

Target marketing

Although every marketing opportunity can create new customers for your business, small businesses should focus on using the marketing methods that promise to create the most new customers and encourage repeat business. Using every marketing method is not an efficient use of your marketing budget because different marketing methods will not necessarily produce significant new clientèle. Rather, your business should use a targeted approach to marketing to maximize the amount of new customers reached. Remember, money and resources spent on marketing are worthy investments only if they generate new customers.

Target marketing seeks to find the best forms of marketing for your business’ potential clientèle and implementing a plan that targets that client base. The idea of target marketing originates from the idea of consumer-centric marketing. This means you advertise the product in a way that’s appealing to potential consumers, not everyone under the sun. Target marketing requires that the business owner knows the target clientèle. Sometimes market research must be performed to determine this aspect of your business. Defining a target clientèle can be different from business to business. This normally requires defining a certain age range for your target clientèle. For example, a certain business might determine that its target clientèle are customers aged 30-37 years old.

After defining your target clientèle, you can implement a specific marketing plan to reach this group of customers. Marketing to different age categories is done by taking into account the best way to reach these particular customers. For example, teenagers are more easily accessible through social media than senior citizens. A targeted marketing strategy should take into account the best marketing methods to reach your clientèle.


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How to Build Your Business

New businesses often suffer during their first few years of operation. This is normal. To build a successful business, steps need to be taken to accelerate the process of building your clientele and selling your products to increase your businesses profitability.

Reduce the overhead

When starting a business, try to reduce expenses where you can. It’s important that your business makes revenue, even if the revenue is small. For example, consider running your business out of your home to avoid paying rent on a store or office space. Maintaining revenue at all stages of your businesses development is a good way to grow your business.


Managing too many tasks is a bad way to grow your business. While it’s important to take an interest in what is going on with your company, it is equally important that your prioritize tasks and tackle those that promise the most return. Less important tasks can be delegated to staff. For businesses with no staff, consider losing the workload of tasks that aren’t growing your business effectively and focusing on the tasks that are.

Hire quality, not quantity

Hiring more employees is not always the solution to growing your business effectively. Although sometimes it will be necessary to hire multiple employees, keeping a small staff to maintain the values and goals of your company is a safe idea. By hiring a smaller staff, you maintain a more personal relationship with your business and also deal with motivated people that can manage extra responsibilities.

Monitor the market

Your business will not be able to grow without considering the market forces influencing your sales. By monitoring the competition and their products, you can better gauge your performance and weaknesses with your business plan. New forms of marketing or a different sales model can help mitigate market forces working against your business.

Maintain cash flow

New businesses often have difficulties maintaining cash flow. A few good months of business can be seriously offset by a bad month if cash flow is inconsistent. To incentivize customers to support your business, try bundling your products and offering service that encourage repeat business.

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5 Do’s and Don’ts for Your Elevator Pitch

Elevator Pitch – Do’s

  1. Start with a great hook. It’s crucial to attract your audience’s attention quickly. Start with a statistic, quote or question that frames the conversation and leaves your listener wanting to know more.
  2. Structure your value proposition. Once you’ve delivered the hook, jump into the details and specify the problem your business will solve.
  3. Have qualitative data to back your claim. After you’ve structured your value proposition, back your claim with data or a statistic.
  4. Spotlight the key differentiators. Point out what is unique about your idea, product or service that makes you stand out from the crowd.
  5. Give the audience a takeaway. If you’ve delivered an effective elevator pitch, your listeners will want to learn more. Hand out your business card so they can contact you.

Elevator Pitch – Don’ts

  1. Don’t wing it. An elevator pitch should come across as spontaneous, but it is crucial that you practice it.
  2. Don’t oversell it. Overselling your benefits and using words like “life-changing” can paint your pitch as unrealistic.
  3. Don’t go too heavy on the data. It is important to back up your claims, but don’t bury listeners with too much context.
  4. Don’t ignore competitors. You don’t need to list all of your competitors, but highlighting your differences will help communicate why your idea, product or service is better.
  5. Don’t forget the call to action. If you finish your pitch without giving listeners a way to contact you or find out more, you could miss out on opportunities.


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Competing With Franchises and Larger Businesses

Small businesses often have difficulties competing with larger businesses. Franchises and larger businesses can offer lower prices on the same items and make up for it by selling in larger volumes. How is a small business expected to compete when profit margins dictate that the price of products and services be higher than those of franchises?

Customer incentives

While offering the same prices as bigger businesses may not be feasible, providing a rewards or loyalty program at your business may encourage repeat customers to use your product or services.


Not every consumer choice is dictated by money savings. Sometimes people go to a certain café because they like the coffee or a certain gym because they enjoy the atmosphere. By offering a personal experience to your customers, new customers are more likely to use your service. In addition, serving a community based clientele is more enjoyable than serving strangers.

Specialized service

A way to beat the bigger businesses is to offer specialized service. While it’s likely that a small business cannot compete with larger businesses offering the same service, having a business specialty can help attract new customers.

Flexible service

Unlike franchises, a small business can make changes to their business strategy overnight. This allows for a greater amount of experimentation. A small business owner is at liberty to offer special deals spontaneously or to change the format of his service at any time. Utilizing this flexibility to find a way to offer unique and specialized service can help your small business compete with larger businesses.

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10 Facts about Starting a Business in Canada

Knowing these facts about starting a business in Canada will help make the start up process easier.

  1. You need to be a Canadian citizen or a landed immigrant.

You cannot start a business in Canada while on a visitor/student visa or while here on a work permit. You can partner with one or more Canadians to start a business but that does not mean that you will be able to reside in Canada. You need to immigrate to Canada to do that.

  1. It’s easy to start a business in Canada.

Based on the World Bank’s Doing Business project in 2011, Canada was ranked the third best place in the world to start a business.

  1. Not all business need to be registered.

Depending on the province or territory you live in, you may still need to register your business, however in Newfoundland and Labrador no sole proprietorships or partnerships need to be registered.

  1. Registering a business name does not protect your business name.

It would be nice if registering your business name meant no one else was allowed to use it but it doesn’t. Different forms of business ownership provide different levels of business name protection, but none of them provide full name protection.

  1. Canada’s system of incorporation is very different then the American system.

S corporations are not available in Canada. Limited Liability company options are only available to professionals such as doctors, lawyers and accountants. Also, incorporation can be federal or provincial.

  1. Most new Canadian small businesses are bankrolled by their owners.

Most Canadians starting a business tend to dig into their own pockets first when they are looking for money to get their business off the ground.

  1. There are few grants for Canadian small business start ups.

Grants for business start ups are relatively rare and are attached to conditions specific to particular industries, locations, and groups of people. The Canadian government is more interested in offering businesses a hand up rather than a hand out.

  1. There are many sources of small business loans.

There are government-sponsored and non-profit agencies that provide small business loans, from Community Futures Development Corporations to women’s organizations. There are also an increasing number of private loan sources.

  1. Canadian small business owners can get back the amount of GST/HST they pay out.

Most Canadian small businesses do not have to register for GST/HST if they make less than $30,000 in a year.  However, when you register for, charge and remit GST/HST you can get the tax you pay out on business purchases back through Input Tax Credits.

  1. There are many income tax deductions available.

Some deductions such as the Small Business Deduction is only available to corporations but others like, Investment Tax Credits are open to sole proprietorship and partnerships. Special income tax deductions are available for home-based businesses and every small business owner can claim their business expenses and write them off against their business income.


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Starting a Small Business

Starting a small business can be a highly rewarding experience. For some it’s an opportunity to turn a hobby into a profession, for others it’s an opportunity to be your own boss. Although starting a new small business is exciting, it’s important to take the correct steps to optimize the chances that your business will be successful. The following article explains the steps required to start a small business.

Get an idea

A business requires a key idea. What are you selling? It’s important that your idea is something that inspires you to go to work, since starting a business is hard and requires a significant commitment.

Is your idea feasible?

Sometimes a hobby should remain a hobby. Other times it’s good to capitalize on something you enjoy doing by making a business of it. But how do you know? Doing market research is a good way to determine whether your business idea can be profitable. Market research can be done in many ways. Feedback from family and friends about the viability of your idea is a good way to start. Asking someone who doesn’t care about you is also a good idea since they will give you an honest answer to the feasibility of your business idea. A more advanced way of doing market research is to explore demographics and statistics of the area where you plan to do your business. The National Household Survey and the CENSUS provide up to date information and should be used to do market research about your business.

Write a business plan

A business plan outlines your business, how you will make money, your clientele and other relevant information. It’s important to write a good business plan because it may reveal any flaws in your business that were not clearly identified before you put pencil to paper. A business plan is also a must for acquiring capital to start your business. Banks and investors normally want to see a business plan before they approve any form of cash flow.

Registration and licensing

This step in starting a small business is the most complicated and often requires the help of a lawyer. You must register the name of your business and form a business entity to be able to legally use your business. It’s also advisable to hire an accountant to review your business plan and help with the financials associated with running your business.

Acquire the necessary funds

You have an idea, the idea seems to be profitable and you wrote a good business plan. Now what? You need to acquire the necessary funds to start your small business. Some businesses do not require much money, namely businesses run from home and Internet based businesses. Some businesses, namely those that require a store and supplies, tend to be more expensive. Keep in mind that minimizing the overhead cost of your business where you can is a good idea before you establish how profitable your business is.

The funds to start a business can originate from multiple sources. Personal savings, investments and bank loans are all good ways to finance your small business. Keep in mind that your small business carries risk, and you should not make any presumptions about the profitability of your business before you actual open your business.

Get to work

After all the above steps have been accomplished, it’s time to put the wheels in motion to open your business. Buy the supplies required to run your business and establish a good marketing strategy to raise awareness about your new business. Small businesses take time to grow and often are not immediately profitable. Patience and hard work are required to grow your business. Take this into account before planning to open a business.

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