The Basics
Making It Legal
You love your business name. Now you want to make your business legal. Depending on your business, you will register your business either as a sole proprietorship, partnership, limited or incorporated business, or a co-operative.
For most provinces, you can register on-line for GST (goods and services tax)/HST (harmonized sales tax) and PST (provincial sales tax). You must register for GST if your sales exceed $30,000.00 per year. In the provinces of Ontario, Newfoundland, New Brunswick and Nova Scotia, you will charge HST instead of GST. Whether or not you have to charge PST in your province is determined by what you are selling. Full explainations are given by your provincial sales tax offices.
Check our resource section for links to your province's business websites.
Office Space
Whether you are opening a store, providing a service, or doing either from home, you will need an office. If your business does not allow you to work from home, you will need to rent office space from a landlord or sub-lease from an existing tenant. Whichever you choose, read your lease or rental contract (we recommend you have your legal representative explain the clauses of the lease to you). This is very important. There are many costs to renting office space, and most are not so obvious.
You will pay a base rent. In most cases, you will also pay a portion of the landlord's operating expenses and realty (property) taxes. These expenses generally increase each year, with an adjustment at the end of each accounting cycle (their accounting cycle). Ask questions. Then ask more questions.
If your landlord offers certain services within the operating costs and you do not require them, try to negotiate your rates. Often retail leases are based on a percentage of sales in addition to the rent and taxes. Check out your landlord - speak to other tenants. Are they happy? How is the service? Do they maintain the building to their satisfaction? How many parking spaces will they provide to you? Is sufficient parking available for your customers?
If you sublease from a tenant, make sure you have the adequate documentation. The landlord usually overrides a sublease. The landlord either owns the building or is responsible for it. You must follow their rules.
Insurance
Read the insurance clause of your lease. You must obey the landlord's regulations. As well, have your insurance company provide the documentation required to the landlord. Remember, the lease alone does not necessarily cover everything you may need. You must have adequate insurance. Whether you lease space or own the building, speak to your insurance company and do the research. Do not forego this step. Many a business owner has been crushed and lost everything due to avoiding insurance. Always purchase insurance!
Image
What image do you wish to present? Do you have a colour scheme in mind which reflects your branding? Is there a certain look you are trying to achieve?
It doesn't matter whether you run a print shop, a frame shop, a bakery, a restaurant, or an office full of employees. You should be consistent with your image. That way your customer will feel good when they walk into your establishment. They will identify with your brand and your look.
When you walk into a franchise, you notice that they are all basically the same. They understand the importance of their image. Apply this to your store, shop, office, logo, pamphlets, business cards, and website.
If you don't have a specific image that your clients or customers can see, we can help. At Ask Marian we specialize in creating the branding you require. From logo creation to websites, we can take your ideas and turn them into something truly amazing.
Working from Home
Office Space
If you work from home, you should deem a portion of your house (or a room or rooms) to your business. We recommend you choose a room with a door so you can close it at the end of the day. It is very important that you do not let your work life take over your personal life. This is sometimes easier said than done. It takes discipline and patience to work from home. There can be many distractions, and if you let them interfere, you may not be as productive as you would like. When on the telephone, do not perform household duties or allow background noises to be heard by a client. It is unprofessional and just plain rude. Remember, at the end of the day, leave your work at your home office.
If you rent your home from a landlord, you must have the landlord's approval to run a business out of your home.
Insurance
Make sure you take out business insurance, or at the very least consult with your insurance company on their recommended route. If you have a problem and you did not notify your insurance company ahead of time, they are not required to insure you (at the very least, if they find out, you will have a very hard time getting any money). Spend the time and money now.
Inventory
If you are storing inventory in your home, make sure you are following proper storage regulations. Ask your insurance company if your inventory requires special insurance.
Licensing
You may require special licensing or you may not be allowed to run certain business out of your home. It is not advisable to run a store out of your house and have customers coming and going if you live in a residential suburban neighbourhood. Your application will most likely be denied due to zoning regulations. In many cases, depending on the business, you may have to apply for a license (whereby your neighbours will be notified and asked if they have any issues). If you only have an office or do not expect customers at your door (you visit your clients or pick up their work to bring home), you most likely will not encounter any difficulties. Do your research. Check with your city's regulations department.
Installations
If you have to install anything in your home for your business that affects the home's structure, such as HVAC (heating, ventilating or air conditioning), electrical or plumbing, make sure you obtain the required permits. Again, notify your insurance company. If you hire contractors, make sure their work is to code. Hire an inspector if you must. A city inspector could come out to your home and make you redo the whole job (at your cost).