More than 80% of Canadian small businesses have reported good financial health for the fourth consecutive quarter, according to QuickBooks’ Small Business Insights Survey (April 2025). Despite ongoing cost challenges, this resilience signals a real opportunity for entrepreneurs. considering how to start a business in Canada.

The survey also found that accounting software is the most useful digital tool small business owners rely on, ranking ahead of websites and payment platforms. That’s why tools like QuickBooks Online accounting software are invaluable.

Together with a solid business plan, this guide will walk you through 10 essential steps for anyone wondering how to start a small business in Canada.

1. Develop a viable business idea

You’ve probably heard this before: the journey of a thousand miles begins with a single step. And for your new business venture, that first step is developing a business idea that’s not only innovative, but viable and sustainable too. It’s a process that involves more than just brainstorming. It’s about finding a gap in the market and identifying the right niche where your business can grow and flourish.

Understanding potential customers 

To get there, you’ll need to form a deep understanding of your potential customers: their needs, their wants, and what they’re currently missing. Once you know the answers to these questions, you’ll be able to determine your value proposition, which becomes the cornerstone of this first step.

Value proposition

Think of the value proposition as the promise you make to your customers—the reason they’ll choose you over others. Combining your knowledge of what your target market needs with essential research before starting a business is key to shaping a clear value proposition that sets you apart in a crowded market. 

2. Create a comprehensive business plan

It might feel tempting to skip this step, but writing a business plan is more than paperwork. Think of it as your roadmap: it captures your vision, outlines your goals, and gives you a clear direction for where your business is headed. A strong plan also makes it easier to answer tough questions upfront. For instance, how much does it cost to start a business, where the funding will come from, and how long it may take before you see a profit

What should your business plan include? Here are the common sections most owners start with:

• Value and mission statement: The core of your business identity
• Market analysis: Insights into your target audience and the competitive landscape
• Sales and marketing strategy: The approaches you’ll use to reach and engage customers
• Operations plan: How your business will function day-to-day
• Human resources strategy: Your plans for hiring and team development
• Financial projections: How much it costs to start a business and what funding you may need.

Your business plan isn’t just a document. It’s a living guide that functions much like your business’s DNA—unique, defining, and critical for future growth and success. From decision-making to finding potential investors, it’s an essential tool for ensuring your business stays true to your entrepreneurial goals.

3. Choose a business structure

Choosing the right structure for your business isn’t just a box to be checked off on your start-up journey. It’s a decision that impacts your taxes, liability, and growth opportunities—shaping how your business operates long term. Whether you’re flying solo, joining forces with partners, or incorporating so you can scale your vision, each option offers unique benefits and challenges.

Sole proprietorship

A sole proprietorship offers simplicity and the advantages of having direct control over your operations. The downside? Your liability is unlimited. This means your personal assets could be at risk if your business encounters financial or legal troubles.

Partnership

For those collaborating with others, partnerships can be an ideal way to combine skills and resources. It’s a structure that shares both risks and rewards. Like a sole proprietorship, risks include the lack of liability protection for personal assets—making solid, clear agreements and mutual trust a necessity.

Corporation

When you choose to incorporate, you’re setting up your business as a separate legal entity, which provides limited liability protection for your personal assets. While corporations are more costly and complex to establish and maintain, they’re a good choice if you’re looking for significant growth and an easier means of raising capital. 

4. Register your business name

Complying with legal requirements is about more than following rules. Doing things right from the very start establishes a solid foundation for your business to grow and thrive. Here are the basics you’ll need to cover for a smooth launch.

Choose a business name

Select a name that not only aligns with your brand identity, but also meets legal requirements. In Canada, this often begins with a NUANS search to confirm your chosen name is available and not already trademarked. You should also consider the availability of a suitable domain name for your online presence, and keep issues such as cultural sensitivity in mind.

Register your business

The business registration process, which can vary by province or territory and by your chosen business structure, usually involves registering with federal and/or provincial authorities. For example, if you’re exploring how to start a business in Ontario, you’ll need to register a business name or incorporation through ServiceOntario, while other provinces have their own registries.

In many cases, you may also need a Business Number (BN) from the Canada Revenue (CRA)—required if you plan to collect GST/HST, hire employees, or access federal programs. Registration is essential not just for legal and tax obligations, but also for setting up business bank accounts.

Obtain permits and licenses

Certain permits and licenses may be required for your specific business type and location, such as municipal licenses, health and safety permits, and industry-specific certifications. Obtaining these legal documents ensures your business stays compliant with local, provincial, and federal laws, helping protect both you and your customers.

5. Register for taxes and permits

After registering your business, the next step is handling taxes and permits. In Canada, most businesses must get a Business Number (BN) from the CRA. It’s the nine digit tax ID used for program accounts like GST/HST, payroll, or corporate taxes.

You must register for GST/HS  if your taxable revenues exceed $30,000—either in a single calendar quarter, or over the previous four (or fewer) consecutive quarters. Even if you're below that threshold, registering can let you claim input tax credits.

Also check which permits and licenses apply to your industry and location—for example, municipal business licenses, health & safety permits, or sector-specific certifications.  Provinces may also offer incentives to ease the tax burden. For example, Nova Scotia provides small business tax breaks designed to support local entrepreneurs.

6. Open a business bank account

Separating your personal and business finances is one of the smartest steps you can take. It makes bookkeeping easier, keeps your taxes straightforward, and adds credibility when dealing with customers, suppliers, or lenders.

To open a business account in Canada, you’ll typically need your business registration documents, government-issued ID, and your BN. Requirements may differ by bank, so it’s best to confirm with your financial institution before applying.

7. Set up your accounting system

Every business needs an accounting system to track income, expenses, and payroll. Having these records from day one keeps your cash flow clear and your decisions informed. It also makes tax season easier to manage.

Many new business owners begin with spreadsheets or manual accounting processes. It works for a while, but these methods are often inefficient, time-consuming, and prone to errors as your business grows. 

This is where accounting software makes a big difference. With QuickBooks Online, you can connect your bank accounts, automate invoicing, and categorize expenses in real time, giving you better financial control and insights.

8. Secure small business financing

Securing the right funding can be a make-or-break factor for your new business. You’re not just looking to get capital—you need to choose a financing path that aligns with your business goals and risk appetite. Here are some common ways to finance your small business:

Personal investment (bootstrapping)

Using personal finances for funding is a cost-effective method that lets you maintain control and avoid interest payments, but it also means your funding capacity is capped by your personal financial resources. Some businesses even start a business without money by keeping their day job or starting small from home.

Family and friends

Borrowing from your personal network can be a flexible method of financing your business, but it runs the risk of complicating (and possibly ruining) personal relationships if the business doesn’t do well.

Debt financing

Loans from banks usually require a solid business plan and good personal credit. You’ll also need to pay interest and make regular repayments, so it’s important to consider the impact on your cash flow. 

Microloans

Offered by non-traditional lenders or non-profits, microloans can be ideal for startups or small-scale businesses in need of modest funding. They typically have lower interest rates and more flexible repayment terms than traditional loans.

Equity financing

This method of financing involves selling shares to investors for capital. It can be a source of substantial funding, but it also means sharing ownership and decision-making control. 

 Grants

Small business grants are non-repayable funds provided by governments and organizations. They’re a good source of funding for small businesses, but you’ll need to meet specific criteria and the application process can be competitive.

Peer-to-peer lending

Peer-to-peer lending allows businesses to connect with individual lenders via online platforms. While it offers more accessible and diverse funding options, be sure to keep an eye on the terms and interest rates. 

9. Build your online presence

Moving your business online opens doors to new customers and strengthens your credibility. Even a simple digital presence can make a big difference. Key steps include:

• Website and professional email: A clear, easy-to-navigate site with contact info and services helps customers connect and trust your brand.
• E-commerce setup: If you’re exploring how to start an e-commerce business, plan for payment processing, inventory management, and smooth customer experiences.
• Digital marketing: Strong branding, social media, and targeted email campaigns keep your audience engaged. Tools like Mailchimp make it easy to design campaigns and send updates.
• Efficiency tools: Website builders and scheduling tools let you launch quickly without technical expertise.
• Community building: Sharing content regularly and engaging authentically turns customers into loyal advocates who drive growth.

By combining visibility, marketing, and authentic connection, your online presence can transform casual visitors into lifelong customers.

10. Launch and grow your business

Once your foundations are in place, it’s time to launch. Start by confirming that your operations, suppliers, and marketing are ready—these final checks can help you avoid costly last-minute setbacks. Key steps include:

• Soft launch: Test products, gather customer feedback, and fine-tune your processes before a full rollout.
• Full launch: If everything is ready, move directly to a complete launch to reach a wider audience.
• Listen to customers: Stay close to your audience, collect feedback, and use it to strengthen your offering.
• Scale strategically: As demand grows, automate repetitive tasks, streamline operations, or expand your team.
• Adapt while maintaining quality: Continuous improvement and flexibility turn a launch into long-term success.

Tips on how to start a business in Canada

Beyond the core steps, a few extra tips can help you start a business in Canada and set it up for long-term success:

• Start small, even from home: Starting a small business from home keeps costs low and lets you test your idea before scaling.
• Prioritize digital adoption: Use cloud-based tools for accounting, payroll, and communication to save time and stay connected anywhere.
• Stay on top of compliance: Keep up with tax deadlines, provincial regulations, and required licenses to avoid penalties.
• Plan for healthcare and benefits: Offering even basic health benefits can make a difference in attracting and retaining talent.
• Know your funding options: From government grants to small business loans, explore programs designed to support Canadian entrepreneurs.
• Network locally: Join chambers of commerce, industry associations, or community groups to learn, connect, and grow.

Disclaimer

Money movement services are provided by Intuit Canada Payments Inc.

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