10-Step Checklist for Starting a Small Business in Canada

To start a small business in Canada, you need to:To start a small business in Canada, you need to:

• Validate your business idea
• Create a business plan
• Choose a business structure
• How to register your business in Canada
• Get a business number and set up your CRA account 
• Open a business bank account
• Set up your bookkeeping and accounting
• Get the right licences and permits
• Get small business insurance
• Build your online presence and launch

1. Validate Your Business Idea

Before you spend a dollar, make sure people actually want what you’re selling. Is there a real market for your product or service? Here’s how to find out:

• Identifying your target customer: Who are you offering your products and services to and what do you know about them? Your success depends on attracting customers and solving their problems or giving them something they genuinely want. Do your research to build an in-depth understanding of who they are, their motivations, and their challenges. The federal government offers a helpful overview of how to conduct market research on potential customers.
• Researching competitors: Once you know your customer, look at who else is serving them. There are free online portals that make this easier. For instance, the SimplyAnalytics database is available through many Canadian public libraries and universities. It allows you to create detailed maps of competitors in any postal code and evaluate the economic trends of their customer bases.
• Test market demand: Find out if what you want to offer is something people will actually pay for. Offer your product or service to a select number of customers – even if it’s still a work in progress – to gauge interest. A small-scale market test is one of the best ways to gather real feedback and sharpen your offering before you go all-in.  

2. Create a Business Plan

A business plan isn’t just a formality, it’s your roadmap. 

Crafting a business plan is a vital step. It outlines your vision and drives your business decisions, from early-stage planning through to growth. For solo entrepreneurs or those launching small-scale ventures, it doesn’t need to be long. Keep it concise, but make sure it’s precise.

A solid business plan can significantly increase your chances of securing financing by clearly communicating your vision to potential investors, lenders, and stakeholders.

It also forces you to think critically: Is this idea actually viable? What does the competitive landscape look like? How will you make money? This document helps you refine your concept, evaluate its feasibility, and guide your strategic decision-making as your business evolves.

3. Choose a Business Structure

This decision affects your taxes, your liability, and how much paperwork you’ll deal with, so don’t rush it. 

Selecting the right business structure depends on factors such as your growth strategy, income expectations, and your comfort with risk. The primary options in Canada include sole proprietorships, partnerships, and corporations, each with specific tax benefits and legal protections suited to different needs. 

• Sole Proprietorship: The simplest and most cost-effective option for most new businesses. As a single owner, you keep all profits, but you’re also personally liable for all business losses and debts.
• Partnership: Works similarly to a sole proprietorship, but with two or more owners who share in decision-making along with the collective risks and rewards of the business.
• Corporation: A separate legal entity from its owners. A corporation limits the personal liability of its shareholders, and can offer tax advantages as your business grows. 

The Canada Revenue Agency has guidance on how to select the right business structure for your situation. 

4. How to Register Your Business in Canada

Registering your business makes it official. It lets you operate legally, open business bank accounts, collect taxes, and enter contracts under your business name.

First, you’ll need a business name. It must be unique. It can’t be identical to or easily confused with an existing registered trademark or business.

You can check name availability through two primary national databases:

1. Canada’s business registries: Search official registries across federal and provincial jurisdictions, including Ontario, Quebec, Alberta, British Columbia, Manitoba, Saskatchewan, and Nova Scotia.
2. NUANS (Newly Upgraded Automated Name Search): This database flags existing corporate names and trademarks that are identical or similar to your proposed name – a critical step before you commit to anything. 

5. Get a Business Number and Set Up Your CRA Account 

Next, obtain a Business Number (BN) through the Canada Revenue Agency’s Business Registration Online portal. In some provinces – Alberta, B.C., Manitoba, New Brunswick, Nova Scotia, Ontario, P.E.I., and Saskatchewan – you automatically receive a BN when you register or incorporate. 

In many cases, you can apply for your CRA tax accounts at the same time as registering your business and getting your BN.

The most common CRA accounts for small businesses are:

• GST/HST Account: Required to collect GST/HST when selling goods or services once you hit $30,000 in annual revenue (or earlier if you choose to register voluntarily). 

• Payroll Account: Needed if you employ staff or pay amounts related to employment. 

• Corporate Income Tax Account: Required if your business structure is a corporation. 

6. Open a Business Bank Account

Don’t mix personal and business money. Ever. 

Separating personal and business finances provides legal and tax clarity. It also simplifies bookkeeping and tax filing, improves your professionalism, makes expense tracking easier, and helps you build a financial history you’ll need for future financing. 

Note: Step 4 – registering your business – is a prerequisite here. Most financial institutions require your official registration documents before they’ll open a business bank account. 

Tip: A dedicated business bank account is also required for GST/HST remittances. 

7. Set Up Your Bookkeeping and Accounting 

The sooner you get organized, the less painful tax season will be. 

Keeping tight control over your business finances is critical for any sole proprietor or business owner.

Keeping tight control over your finances is critical for any sole proprietor or small business owner. Tracking income, expenses, invoices, and cash flow throughout the year – not just at year-end – is what separates businesses that scale from ones that scramble when filing annual tax returns. 

Choosing accounting or bookkeeping software makes all of this manageable. Popular options include:

• ReInvest Wealth
• QuickBooks
• Xero
• Wave

Note: Zensurance clients get discounts for subscribing to ReInvest Wealth, QuickBooks, Xero or Wave through the Zensurance Perks program.

8. Get the Right Licences and Permits 

The licences and permits your business needs depend on your province, industry, and the nature of your operations, and the requirements vary more than most people expect. 

The easiest way to figure out what you need: use BizPal, a free government tool. Enter your business type and location and it generates a list of the required municipal, provincial, and federal licences and permits.

Don’t leave this step until the last minute. Failure to secure the correct documentation can result in significant delays, fines, or even the closure of your business.

Important: Getting a business licence or permit is a separate legal obligation from registering your business name with the provincial government. You need both. 

9. Get Small Business Insurance

Many new business owners or entrepreneurs think insurance can wait. It can’t. Your liability risks start as soon as you offer advice, sign contracts, sell products, or launch a website.

You’ll also need proof of insurance if you want to:

• Rent or lease commercial space
• Get a business loan
• Sign customer contracts
• Sell at a farmers’ market or public event

And here’s something most people don’t realize: no new business is too small to need liability insurance – the size of your new company doesn’t eliminate risks. It just changes the scale of it.

Most small businesses in Canada need at least three types of coverage: 

• General Liability Insurance: Covers third-party bodily injury and property damage claims.

• Professional Liability Insurance: Also called errors and omissions or E&O insurance, it covers claims related to your professional services or advice.

• Product Liability Insurance: Covers claims involving the products you manufacture, distribute, or sell. It’s often bundled with general liability. 

A licensed insurance broker can help you figure out exactly what your policy needs to include to protect your finances. 

Tip: If you plan to hire employees, you’ll need to register for workers’ compensation through your provincial Workplace Safety and Insurance Board. Workers’ comp covers job-related injuries and illnesses to employees. In most provinces, it’s mandatory.

10. Build Your Online Presence and Launch

You’ve done the hard work. Now it’s time to get found.Here’s what to prioritize:

• Set up a Google Business Profile: A Google Business Profile is a free listing that controls how your business appears on Google Search and Google Maps. When someone searches “coffee shop Calgary,” your profile surfaces your business name, location, phone number, website, hours, directions, and reviews all before they even visit your site. Set this up before anything else.

• Build your website: You’ll need a domain, a hosting partner, and a platform to build on. The Canadian Internet Registration Authority (CIRA) offers an all-in-one platform to find a .ca domain, choose a web-hosting partner, and build your site. CIRA data shows Canadians are up to four times more likely to shop on a site with a .ca domain, and a .ca domain can also boost your local search rankings. Low-cost no-code builders include Wix, GoDaddy, Shopify, and WordPress. 

• Get active on social media: Pick one or two platforms where your customers actually spend time – Facebook, Instagram, TikTok, or YouTube. Don’t try to be everywhere. Do one platform well. Focus on offering valuable advice, being highly responsive, and celebrating your customers publicly. That kind of engagement builds trust, drives referrals, and turns one-time buyers into regulars. 

• Ask for Google Reviews: The simplest approach is timing the ask right. Request a review:
  • After a job is completed
  • After a customer says they’re happy
  • In a thank-you email
  • On a receipt or invoice
  • Through a follow-up text
  • Via a printed card with a QR code
  • At the end of a customer support conversation

Five-star reviews are free marketing. Don’t leave them on the table. 

• Use local SEO: For most new businesses, local SEO (search engine optimization) matters more than anything else. Use specific local keywords on your website – “Calgary coffee shop,” “Toronto electrician,” “Vancouver wedding photographer” – since local search results are driven by relevance, distance, and prominence. And write the way your customers search. Instead of “property management solutions,” a landscaping startup in Toronto should use “lawn care services Toronto.” 

Get a Free Small Business Insurance Quote in Minutes

Getting a free business liability insurance quote takes less than five minutes and it doesn’t commit you to anything. 

It’s simply the smartest way to understand your options: review coverage types that fit your business, compare quotes from 50+ Canadian insurers, and get real answers from a broker about what you actually need. 

Fill out our online application for a free quote now.

Our team of licensed brokers will find the right coverage to protect your finances and reputation, customize your policy to suit your needs and budget, and deliver your policy documents and certificate of insurance within 48 hours or less.

– Reviewed by Brandon Bowie, Senior Broker and Team Lead, Professional Lines, Zensurance.

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