Starting a Business in Canada

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No nonsense information on small business.

May 24, 2011 - 3 minute read - Comments - legal

Choosing A Provincial Or Federal Corporation In Canada

Corporations in Canada can be registered at either the federal or provincial level. If you are registering a federal corporation the first step is to order a [NUANS report][1]. This is a preliminary search that must be conducted to see if the name you have chosen for your company is available. The report can be ordered online for $20 or you can get one in person from a NUANS member organization.

The NUANS report won’t reserve the name for you. It will just give you an indication of whether the name has a serious conflict with that of another company. If the NUANS report does not seem to show a conflict you can apply for corporate name pre-approval. It isn’t necessary to file for pre-approval, you can apply for name approval when you file your articles of incorporation. You will have to include your NUANS report with your incorporation documents if you choose this option.

It is possible to file your articles of incorporation and pay your fees online, by email, by fax or by mail. While it is possible to complete and file your own incorporation documents, unless you are experienced in this area, I wouldn’t recommend it. I would recommend that you order a NUANS report and apply for corporate name pre-approval but then I would hand the process over to a lawyer or a service like legalzoom.ca.

A good corporate lawyer will give you the best set of legal documents because they will be tailored to your specific situation. Your lawyer can also look after other things like a shareholder agreement at the same time. Legalzoom.ca can be a good choice for someone on a budget as you will get a set of documents that are acceptable, but not highly customized to your situation.

Your corporation will be incorporated federally and registered provincially in the province where your head office is located. Additional provincial registrations can be added if the scope of your business operations will extend to those provinces. The procedure for provincially incorporating a company varies from province to province. It is important to note that the provinces do not recognize a NUANS report. A name search and approval must be conducted with the province in which you wish to incorporate.

It can cost less that $750 to provincially incorporate in a province like Ontario. A federal corporation will cost about $1,000 with added fees for each additional province you register in. These fees would be representative of doing it yourself or using a low cost provider. Using a lawyer could cost $2,500 or more but it could be well worth it, especially if your business is complex.

If you plan to never do business outside of your home province, a provincially incorporated company might make sense. Otherwise a federal corporation brings the advantage of being registered nation-wide with the ability to register in individual provinces if necessary. Incorporating a company might seem like a stressful task but if you look after getting your name pre-approved and then hand it over to a professional, it can be relatively painless.

[1]: https://www.nuans.com/eic/site/075.nsf/eng/home(NUANS Report)

May 19, 2011 - 2 minute read - Comments - business planning

Would You Buy This?

We came across a Kijiji ad this week advertising a completed business plan for the health care industry. Here’s the ad: Canadian business plan for sale 2,500.00 firm serious inquiries Canadian business plan completed for health industry. Will sell with powerpoint. Only selling because of lack of funding. Definite growth and profit for a growing demographic group. It looks like this guy is trying to sell a treasure map. I wouldn’t pay $0.25 for this plan. Here’s why:

  • Good plans get funded. Bad plans (mostly) don’t. There had to be some fatal flaw in this plan. Maybe the market wasn’t well defined; the financials could be too weak or too speculative. Maybe the management team’s background wasn’t a fit for this new venture.
  • Ideas are a dime a dozen. What matters is the team. You can have the best idea in the world. It can solve a real problem in the market and can be profitable. If your team isn’t right for the business, you won’t get funding. In fact, successful entrepreneurs can get funding based on their track record, even if their new idea doesn’t sound so great. Because your management team is so important, we don’t guarantee that you will get funding by using BPG.

So this ad is trying to sell a plan that hasn’t gotten funding, doesn’t have a management team attached and may or may not fulfill a market need. What do you get for $2,500? You would be far better off spending this money on lottery tickets. Better yet, build a business based on your idea, your research and your team.

May 13, 2011 - 3 minute read - Comments - branding

Some Advice On How To Name A Business

It can be a difficult decision when it comes time to name a company. You may have have an idea that is very personal to you, yet you worry about it being an easy name to market and create a brand around. The first thing that you must consider is that there are two restrictions that will limit your choice of a business name; trade or corporate name registration and internet domain name registration.

If your business is a sole proprietorship or a partnership you must register a business name with your provincial authority. Corporations can be incorporated federally with a local registration in the provinces it does business in or it can be incorporated provincially. As with a trade name, a corporate name must be registered either with the federal government or with your provincial government. The approach to registering a business name or a corporate name varies considerably from province to province.

In this day and age, all businesses should have a website. For this reason, the company or trade name should also be checked to see if a good website address is available. A short address with a .com name is preferable, with .ca a secondary choice. If you can get your business name as a internet domain name, it will be much easier for your customers to find your website. Hover, a Canadian domain registration company, has a domain name search on their website.

Registering a name and getting a good internet domain name are practical considerations but naming a business is more complex than satisfying those two criteria. For example, a business name can be abstract or descriptive. It can be made of common english words or it can be completely made up. A business name is a big part of its brand so it is important to think through a few considerations before making the final choice.

For a small business, the name should reflect the key elements of the business. Because small businesses generally don’t have a large marketing budget, there is an advantage to having someone know what your business does by just hearing the name. However, there is a danger of being too descriptive. Canadian Tire spent a lot of money on ad campaigns in the 1980s to convince consumers that they were “more than just tires”. If your business name contains the city you live in or if it defines what you do very narrowly, you might be hindered when trying to expand to new locations or offering new product lines. Some of the same considerations come into play when putting your own name in the business’s name. If you decide to retire or sell the business, do you really want some one else running a business with your name on it?

It’s important that your business’s name reflect its position in the marketplace. For example, it will be difficult to sell luxury goods at a business with a discount sounding name. It’s worth thinking about what your business name might mean in another language if you have plans to offer goods or services internationally. Also, think about whether the name of your business could be easily turned into a pun or a bawdy joke. You don’t want people with an elementary school sensibility giving your business an unofficial nickname.

Make a list of as many names as you can think of. Eliminate them one by one using the criteria above. Ask the opinions of family, friends and potential customers. While picking a good name is important it isn’t everything. A good product or service coupled effective marketing can overcome a weak name, so don’t make an exhaustive attempt to pick the perfect name. It’s an easy thing to get obsessed with when you should be moving forward with your business plans instead.

May 12, 2011 - 3 minute read - Comments - business news

Wilson Centre Highlights Young Entrepreneurs

The Wilson Centre For Entrepreneurial Excellence was established by was established in 2007 and made possible through the generous donation by philanthropist, University of Saskatchewan Alumni and businessman W. Brett Wilson. The Wilson Centre held its annual I3 Idea Challenge last night.

Wilson Centre I3 Challenge

Eleven teams had six minutes to pitch their business plans to a panel of industry judges. The participating teams were:

  • Industrial Motor Self Diagnostic System - eliminates unplanned downtime of large industrial electric motors and saves companies the cost of unscheduled maintenance and increases safety.
  • Asehro Inc. - creatively reusing old shipping containers that are stacked up in Mauritius, to make sustainable, affordable and modern energy efficient homes.
  • Carley Olivia Photography - A Saskatoon based photographer
  • Community Costa Rica - provides affordable housing opportunities for the low and middle-low income families of Costa Rica who wish to purchase a quality home in a healthy and safe community.
  • ENRQI Research Ltd. - a new emerging biotechnology company that has created a highly efficient and cost effective process which utilizes patented strains of yeast to convert waste products such as glycerol, municipal waste, and CO2 into green chemicals.
  • KoalaLogic.com - Canada’s premiere online retailer for snowboard, skateboard, and wakeboard clothing, equipment and accessories.
  • Mechanical Moose Solutions - a simple solution to increase efficiencies of North American grain farms during harvest operations.
  • Neechie Gear - the first clothing company in Canada to create, support and develop Aboriginal youth based sports teams.
  • NitroWave - a new kitchen appliance developed to rapidly cool and heat items.
  • THREATS™ - a user-friendly, geospatial, application-based software that integrates publicly available, multi-jurisdictional and multi-sector data on aquatic health as well as man-made developments on the landscape.
  • Wellington Caskets - provides “Casket Covers”, a product that allows consumers to have affordable and eco-friendly funerals without sacrificing the respectable look of a formal funeral.

The winners of the challenge were:

  1. NitroWave
  2. Carley Olivia Photography
  3. Neechie Gear

The presentations were well done and it was obvious that a lot of work went into them. It’s encouraging to see such high quality work from young entrepreneurs. Some of the ideas were better than others and there was a certain naiveté about the ease of bringing certain products to market, but overall I was impressed. There were 45 business plans entered to compete for the $300,000 in cash and services. The popularity of this competition continues to grow and the quality of the business plans continues to improve. This is an excellent opportunity for a student at the University of Saskatchewan with a business idea to compete for the cash prize and gain some exposure for his or her business.

May 11, 2011 - 3 minute read - Comments - marketing

Marketing Tip - How You Respond Tells a Lot About You

There is lots of good advice on marketing available. Much of it is based on solid research and can help you grow your business. This post is much more basic. Once a prospect contacts you, how you deal with him says a lot about you.

Here’s a case in point. I’m trying to track down some mall lease rates and property availability for a client looking to establish a jewellery business in Saskatoon. Now you tell me how anxious this mall is to do business.

I first checked out the mall’s website and they listed contacts for leasing. When I communicated what I was looking for, I received an email asking for clarification. When I replied that I was looking for a permanent lease instead of a short-term one, the contact told me that she couldn’t help me and to contact somebody in Calgary. Okay, why didn’t she forward my request to the right person?

When I contacted the person in Calgary, I received an autoreply saying she was on vacation for two weeks. If I couldn’t wait for two weeks, I could contact another person in the Calgary office. Imagine, me of so little patience, having the gall to expect an answer to a question in less than two weeks! I sent an email to the next person in line, followed by a phone call. In the phone call, I found out that the contact person was an admin assistant and she has sent my request back to the Saskatoon office. She gave me the first name and the phone number of the Saskatoon contact. After some prodding, I got the person’s last name and job title. It happens to be the mall general manager. Two calls and voicemails later, still no response. Here’s what they are implying by their response:

  • If you want to talk to the right person, keep trying.
  • Our management structure and corporate decision making system is fascinating to prospective customers.
  • We are either too inept or too busy to waste time on giving answers to a few simple questions.

This whole thing could have been cleared up by having somebody empowered to answer a few simple questions. What if there is no space available? To avoid looking like you are hostile to new business, make sure to:

  • Respond to inquiries quickly and courteously. Telling a customer “no” quickly and courteously does no harm to your brand. Saying no or yes in an impersonal and slow way implies a lot of negative things to your prospects.
  • If your employees don’t have the answers, make sure they pass the information to the right person. Your customers don’t need to know who does what. They just want answers.
  • If you think your system is user-friendly, test it. Have somebody you trust contact your sales staff and see how they do.

People can get caught up in their daily routines and forget about their customers. When this happens, it can undermine your entire marketing effort.

Update: The manager called and told me they didn’t want to add another jewellery store, and they didn’t have any leasing opportunities. She was pleasant and once I told her about the hoops I had to jump through, she was apologetic. She mentioned staff vacations and an office move for the reason for the backlog.

May 10, 2011 - 1 minute read - Comments - business news

Visa Canada Sponsors Elevator Pitch Contest

If you are a Canadian small business owner with a Visa Business Card you can enter Visa’s Go Biz Elevator Pitch contest. By filling out an entry form on Visa’s site, you can compete for a $10,000 credit to your Visa Business Card. Visa will choose 5 semi finalists who will receive free airfare and accommodation to Toronto, where they will pitch the judges during the one minute elevator ride up 49 stories at the One King West Hotel & Residence. The winner will receive the $10,000 credit and the semi-finalists will receive $250 prepaid Visa cards. Contest judges include:

  • Matthew Corrin, founder & CEO of Freshii
  • Daniel Klass, Managing Partner of Klass Capital
  • Sarah Prevette, founder & CEO of Sprouter
  • Stéphane Lavallée, Vice President, Business Solutions Division, and publisher Groupe Les Affaires chez Médias Transcontinental

The application process looks fairly straightforward and entering the contest should only take a few minutes. It might be a good chance to win $10,000 and get some publicity for your company. Entries close June 20, 2011.