How to Have a Home-Based Business in Canada
A home-based business is a business that operates from an owner's home office. Canadian provincial laws and regulations specify the types of business that can operate from an owner's home. Home-based businesses offer flexible hours and the opportunity to grow a business with low start-up costs. However, there are many factors to consider when starting one of your own. Follow these steps to start a home-based business in Canada.
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Things You'll Need
- Business plan template
- Home office space
- Business supplies
- Financial investment for start-up costs
Instructions
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1
Research home-based business options. Visit your local public library or the Canada Business website to find information on laws and regulations related to operating a home-based business in your province.
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2
Decide what services your home-based business will provide. Analyze your business idea to determine how profitable and viable it will be. Conduct market research to determine your customer base and how you will market your business.
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3
Choose a business structure. There are four types of business structures to choose from: sole proprietorship, partnership, corporation or cooperative. A sole proprietorship or partnership offers greater flexibility for operation of your business, but you will be personally liable for any business expenses. A corporation is a legally incorporated business. The business assets and debts will be considered separate from your own personal assets. Corporations are subject to greater regulations and must meet specific regulatory requirements, such as shareholder meetings, and incorporation is expensive. A cooperative is owned by an association of members, who share their resources to provide services to clients. Cooperatives require greater collaboration and decision-making among members.
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Create a name for your home business. Your business name should relate to the product or service that you're selling. Conduct a name search through your provincial business registry to ensure that the name you have chosen is available. If you plan to have a website, conduct a Web domain search to see if the name of your business is available.
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5
Register your business name. Visit the Canada Business website to find information on how to register your business through your provincial business registry office.
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Develop a business plan by using a template from your public library or an online business plan. The business plan should include an executive summary, vision, description of product or service offered, marketing strategy and financial forecast.
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Set up your home office and organize a system of record keeping. Create a separate office space for your business to minimize disruptions and maximize your productivity.
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Tips & Warnings
In Nova Scotia and New Brunswick, you don't need to register a business name that has your own personal name as the company name. Check your provincial business registry for requirements.
Consider paying taxes to Canada Revenue Agency by installments through My Payment. This service links directly to your bank account and allows you to pay taxes through online banking.
Set aside taxes on a regular basis to reduce having to pay additional taxes on your earned income at tax time.
Ensure that you keep a record of all of your earnings and sales. As a home-business owner, you're responsible for paying the appropriate personal and sales taxes to the federal government. You're also responsible for keeping accurate records.
References
Resources
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