Starting a Business in Canada

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Flock Free Nation

No nonsense information on small business.

Sep 27, 2011 - 2 minute read - legal

Copyrights In Canada

The Canadian Intellectual Property Office defines a copyright as:

Copyright is the exclusive right to copy a creative work or allow someone else to do so.

Copyright applies to all original literary, dramatic, musical and artistic works. These include:

  • books and other writings
  • music
  • sculptures
  • paintings
  • photographs
  • films
  • plays
  • television and radio program
  • sound recordings, such as records, cassettes or compact discs
  • performer’s performances
  • communication signals
  • computer programs

Copyright doesn’t apply to:

  • facts
  • themes
  • ideas
  • most titles
  • names
  • catch-phrases and other short-word combinations

It’s not necessary to register a copyright because a copyright automatically exists when the work is created. However, having a registered copyright is a signal to others that you own the copyright to the work. It can also make it easier for a company to find you if they want to license your work.

Generally speaking, copyrights last for the life of the author plus 50 years following death. There may be some exceptions in specific situations.

The copyright holder is responsible for enforcing his or her rights under the Copyright Act. This has important business implications for the copyright holder. If a multi-national corporation infringes on your copyright, it is your responsibility to take them to court to enforce your rights. This can be prohibitive for artists and entrepreneurs that don’t have the money to support this kind of court action. It’s something to consider when assessing the strength of your copyright protection.

For more information, you can download the Canadian Intellectual Property Office’s A Guide To Copyrights.

Sep 26, 2011 - 4 minute read - business planning

How To Quickly Test The Viability Of Your Idea

People come up with ideas for businesses all the time. These ideas need to be tested to see if they have a serious possibility of becoming actual businesses. The first thing I like to do is some rough calculations to see if there is sufficient profit involved to even consider the opportunity.

An idea needs to meet a certain threshold of profitability to even be worth looking into further. We each only have so much time in our day. If you choose to work towards launching a business that has low profit potential, you are giving up the opportunity of doing something more profitable. This profitability threshold will vary from person to person but you should have one based on your own situation.

I usually use a spreadsheet to do these simple profitability calculations but it’s not necessary to go that far. These are the typical “back of a napkin” calculations that business people have been doing for years. Use whatever method works best for you.

The first step is to calculate revenue. Let’s use a hypothetical business idea of selling musical instruments online through a website. Let’s say you think 10 instruments will sell every day at an average price of $75 and you will earn a 10% commission on each sale. That’s 10 x $75 x 10% = $75 per day.

Let say you were also going to run ads on your site using Google’s Adsense ad network. Lets say you are going to get 1,000 visitors to your site a day and 1% of them will click on a Google ad, and that Google pays $0.10 per click. That’s works out to 1,000 x 1% x $0.10 = $1 per day.

Let’s summarize.

The next step is to figure out what expenses will have to be incurred to generate this revenue. For this hypothetical business, we’ll be using a home office. There will be costs for web hosting, advertising, office supplies, professional services, bank charges and utilities. Notice that I haven’t mentioned any start up costs. For the purposes of this quick calculation, we are only interested in on going expenses that would be listed on a business’s income statement. Let’s assume the following:

So our rough calculations show that the business would make about $21,000 per year. Any salary for yourself would have to come out of this number as would any taxes and payroll deductions.

This amount would also have to represent the return on any investment you’ve made to get the business running. You need to get a return on your investment or you’ve just bought yourself a job. How much would that investment be? Fifteen or twenty thousand dollars? A site like this would need to have the ability for people to create accounts and post their items for sale on the website without interacting with a person. This requires advanced website development, which is beyond putting up a simple brochure-style website.

All of the numbers above are estimates and have not been researched. You might dispute that the assumptions I’ve made are accurate. This is where the use of a spreadsheet comes in handy as it is easier to run different scenarios and see the effects of different assumptions. You will have research the variables that go into your quick calculations based on the industry you are entering. The more accurate you can get your assumptions, the more accurate your overall result will be.

Don’t be overly optimistic with your numbers. It will be much harder to achieve a given level of sales or to keep expenses to a low level than you think. Be realistic.

The bottom line is that our hypothetical business appears to be not worth pursuing, given the assumptions that have been made. There is not enough income to pay a reasonable salary and to provide a good return on investment.

Sep 23, 2011 - 1 minute read - business news

B.C. Government To Add $3 Million to Venture Capital Credit (VCC) Program

The Ministry of Small Business, Technology and Economic Development administers the Venture Capital Program. Corporations investing in shares of a registered venture capital corporation or eligible business corporation can claim a Venture Capital Tax Credit (VCC).

Corporations may claim a tax credit in a taxation year equal to the lesser of:

  • the amount of the tax credit certificate issued by the Ministry of Small Business, Technology and Economic Development
  • provincial income tax otherwise payable

This credit only applies to provincial income taxes. If the credit cannot be used up against a single year’s income, it is possible to carry the credit forward for up to four years.

This addition of $3 million to the tax credit budget will allow more investments to qualify under the program.

Sep 22, 2011 - 1 minute read - business news

CYBF Creates YOU Innovate Canada Tournament

The Canadian Youth Business Foundation (CYBF) has created an innovation contest to promote Global Entrepreneurship Week, which runs from November 14th to 20th, 2011.

On September 26th, eligible participants will be asked to turn their minds to creating new value out of an everyday object. YOU Innovate Canada participants will use that object as the raw material to create a new innovation, define its value and submit a brief video about their innovation or the chance to win cold hard cash provided by

The contest has $25,000 in prizes.

  • Fourteen regional awards of $1,500 in cash
  • National cash award of $4,000
  • Trip to Liverpool, England to attend the Global Entrepreneurship Congress (March 2012)
  • Cash awards generously provided by

Sep 21, 2011 - 1 minute read - business news

Ottawa Universities Get $1M To Launch Young Entrepreneurs Program

The Ontario Centres of Excellence has given $1 million to Ottawa’s Young Entrepreneurs, which is a partnership between Carleton University, Algonquin College, La Cité collégiale and the University of Ottawa.

The funds are intended to support the entrepreneurial ecosystem in Ottawa. Students and recent alumni can apply for funds to assist in business planning and to help with bridging the gap between initial start up and generating sales.

Each of the four participating universities have programs designed to assist entrepreneurs as they start and grow their businesses. Students interested in learning more about entrepreneurship and the programs available to support entrepreneurs, should contact the business college in their university.

Sep 20, 2011 - 1 minute read - government

How To Get A Business License in Saskatoon

February 15, 2014 - The city now has an online application. See our recent post.

Saskatoon does not currently have an online system for getting a license for your business. The City does participate in BizPal, which will ask you a series of questions about your business and give you a list of licenses and permits you need before starting up, but to get a business license you will have to communicate directly with City Hall.

The application forms for a business license can be submitted in person or by mail. The forms can be downloaded here.

Sep 19, 2011 - 2 minute read - business news

Beware of Canadian Banking E-mail Scams

I received the following email today:

Bank of Montreal Interac EMT Alert!

You have been sent an INTERAC Email Money Transfer.

Amount: $890.00 (CAD)

Sender’s Message: A message was not provided

Action Required: To deposit your money, click here:

Interac Email Money Transfer, BMO Bank of Montreal

What is an INTERAC Email Money Transfer? If you have an email address and online banking password at a participating financial institution, you can send and receive money quickly and easily.

How do I know this a fake? First of all, I’m not expecting $890 from anyone via an Interac e-mail money transfer. It would be nice to get money for no reason but if something seems like it is too good to be true, it is. Criminals are counting on your greed to overwhelm your better judgement.

Secondly, although the link looks like it goes to a Certapay domain, it doesn’t (I’ve modified the url slightly so it doesn’t work). It goes to a site with the word “yoga” in the domain. This should be a dead giveaway, except the criminals have created a convincing mock-up of BMO’s site as shown below.

Fake BMO Web Page

It looks real enough to someone in a hurry, doesn’t it? However, a real Interac e-mail money transfer will take you to a page where you can choose which bank to deposit the money into, not the bank of the sender.

If you ever get an e-mail that is supposed to be coming from your bank but you feel it looks suspicious, don’t click on any of the links in the email. Call your bank by telephone to inquire about the information in the email. A bank employee can tell you if it is legitimate or not.

These criminals are getting more clever with their tactics and I’d hate to see an unsuspecting business owner get taken advantage of. Be vigilant.

Sep 15, 2011 - 2 minute read - websites

Picking The Right Domain Name

Much like picking a name for your business, picking the right domain name can make things much easier when it comes time to market your business. With the large number of good domain names that have been taken, this can be difficult to do but if you take a few key things into consideration, you can get closer to the ideal.

  • You should be able to tell someone your domain name over the telephone without having him or her ask you to spell it out. If you have to start spelling your domain name for people, it’s too complex.
  • Try to get a .com. If you are solely focused on Canada, a .ca can be very good as well. If you start to go to other domains, you will reduce the likelihood that your customers will be able to remember your domain name.
  • Don’t use hyphens. People don’t expect hyphens in domain names. If your customers try to enter your domain name and don’t put in the hyphens they will end up on someone else’s site.
  • A shorter name is better. It’s easier to remember and it makes email addresses based on your domain much shorter. Imagine trying to fit “” on a business card.
  • You domain name should include your business name or a portion of it. I’ve seen people use domains that describe what they do instead of their business name and they can be hard to remember.
  • Don’t skip letters or vowels. Flickr may have been able to establish a huge brand while missing an “e” but it doesn’t mean that you are going to.

You might think that your domain name isn’t all that important because people will just use Google to find your business. Remember that when people search for your business, the search results will likely display the websites of your competitors as well. Would you rather have customers go to your site directly because it has a memorable domain, or do you want them to look through Google search results, and hope that they don’t get distracted by another listing?

Sep 14, 2011 - 2 minute read - websites

What Is A Domain Name?

Wikipedia defines a domain name as:

A domain name is an identification label that defines a realm of administrative autonomy, authority, or control in the Internet. Domain names are hostnames that identify Internet Protocol (IP) resources such as web sites. Domain names are formed by the rules and procedures of the Domain Name System (DNS).

I’ll try to make this a bit simpler. For our purposes, a domain name is the address of a website. Typing into the address bar of your browser window will bring you to this blog. The is a domain name. You’ll notice that the address up there is different right now but that’s because we forward the flockfreenation domains (.ca and .com) to this address on our company’s site.

In order for you to have a website for your business, you’ll have to register your domain name. Good domain names are hard to find because many of the obvious choices have been taken. They might either have sites built on them or someone might be sitting on them, waiting for the right price. Domain names can be like virtual real estate that someone is holding until he or she can sell it to a website developer at a profit.

For this reason, finding a good domain name should be an integral part of the process of naming your business. Finding a name that is available with the government’s business or corporate registry and as a good domain name can be a bit of a chore. If you can find a name that satisfies these conditions, the odds are good that you have a name that is distinct from your competitors as well.

There are many places on the internet where domains can be registered. My current favourite is There are probably cheaper places to get a domain name but Hover doesn’t try to sell you a bunch of other services along the way, which makes the process simpler. Use Hover’s domain name availability search tool at the top of its home page to see if your choice of domain name is available.

Sep 12, 2011 - 1 minute read - entrepreneurship

Ideas Are A Dime A Dozen

I often hear people say that they have a great idea for a business but they are missing something to make it a reality. They don’t know how much it would cost to start up. They don’t know how to develop for the internet. They don’t know where to get financing. They don’t know where to start.

These are real barriers to starting a business but they are not as big a barrier as your own inertia. No one is going to start a business for you. You have to take action to accomplish anything. Falling in love with your idea and dreaming of the day you’ll have a successful business, won’t accomplish anything.

Now, more than ever before, resources are available to help an entrepreneur on his or her journey to success. The Canadian and American governments each have extensive resources to help people start businesses. There are many blogs, like this one, dedicated to small business and entrepreneurship. The resources are there to help you when you get stuck along the way. However, what all these resources can’t do is get you started. Only you can take action.

That’s why ideas are a dime a dozen and taking action is everything.