Before you Begin

Know Yourself

Starting your own business can bring you independence, the chance to be your own boss, and the opportunity to earn profits. But owning your own business is a big commitment: your time, money and security will be tied up in your work. Will you have family support and understanding? Will you be trading in a secure income for the risks of being an entrepreneur? Are you sure you know and understand all the risks? Before you make that commitment, make sure going into business is what you really want.

Before opening a business, you can objectively evaluate your readiness by doing a self-assessment. A self-assessment is an inventory of your previous education, training, experience, skills, knowledge and interests. It will help you discover what you are good at, what you need to improve on, and what kind of business you should or shouldn't open. Self assessments can be found in a variety of locations. Canada Business Nova Scotia (1-888-576-4444, cbns@canadabusiness.ca,  http://www.bsc-sec.ca/ns ) has a variety of self-assessment tools available you can use either in person or over the Internet. You can also visit the following Web sites:
 
Business Development Bank of Canada - BDC - Entrepreneurial self assessment

Canadian Bankers Association - Getting Started in Small Business

Online Small Business Workshop

Have a Plan

A business plan is a map of how you are going to start and run a successful business. It is a written document that says who you are, what you plan to do, where your business will be located, when you expect to start working, how you will manage your business, the profits you expect to make, the risks you will face, and how you will deal with those risks.

Financial lenders and product or service suppliers will ask you to present your business plan to see whether you have done things properly. Your business plan is an important tool for promoting yourself and your business idea. If you don't have a completed business plan, you will likely experience difficulty gaining access to financing.

If you want more information on business planning, contact us (1-888-576-4444, cbns@canadabusiness.ca, http://www.bsc-sec.ca/ns ). Our walk-in library in Halifax has books on how to write a business plan as well as over 250 sample business plans on different types of businesses to help you get started.

The Interactive Business Planner (IBP) is an online tool that can assist you in preparing a three-year business plan for a new or existing business. The IBP walks you through the business plan process, allowing you to input your data and information, save and download it. This tool is available at the following Web site: Interactive Business Planner

The following document on preparing a business plan is available from us:

Business Plan Guide

Know Your Market

A successful marketing plan is an essential part of your business plan and outlines your overall marketing strategy to meet your objectives. It demonstrates extensive knowledge of your products and services, customers, and competition. Your marketing plan presents your research on pricing and promotion, and states your marketing or advertising plans for your products or services.

Locating accurate and specific information is an important first step in your market research and the development of your marketing plan. Statistics Canada, the Nova Scotia Department of Finance, and Canada Business Nova Scotia can help you gather relevant information, including industry statistics and reports, demographics, family expenditure patterns, and a list of potential competitors, to name a few. Also, our walk-in library in Halifax holds many titles that could assist you in preparing your marketing plan.

Other documents on market research and developing your marketing plan are available from CBNS:

Guide to Market Research and Analysis
Market Analysis
Marketing Plan Outline
Ways to Promote Your Product or Service

Choose Your Business Structure

One basic question facing all new business owners is "What business structure is best for me?" The four main types recognized in Canadian law are:

Each business structure allows and requires different things. People new to business may think it doesn't matter how a business is organized or structured, but it can make a big difference:

To help you better understand the four business structures, the following document is available from us: Forms of Business Organization. Speak with an accountant or lawyer if you require advice on which structure is right for you.

Choose Your Location

The location you choose for your business will influence its success. A bad choice may result in failure, while a good choice could help ensure success. Many entrepreneurs believe a thorough consideration of population demographics, competition, and traffic volume are sufficient in their location decisions. But there are other factors to consider, including compatibility with other local businesses, the presence of an effective merchants' association, the responsiveness of the landlord, as well as zoning regulations and planning, to name a few.

For more information on locating your business, the following document is available from CBNS:

Store Location - "Little Things" Mean a Lot

Table of Contents

Top of page

Getting Started

Business Name

You must register your business name with the Registry of Joint Stock Companies unless your business name is your first and last name only (for example: Jane Doe, no requirement to register. Jane Doe Enterprises, legally required to register). When you register your business name, you ensure no one else will carry on business under that name.

The Registry of Joint Stock Companies must perform a Name Search before you can register your chosen business name to ensure the name is not currently in use (contact the Registry of Joint Stock Companies for applicable fees). If the name you have chosen is not in use, the Registry reserves the name for you for 90 days, by which time you must register and pay the applicable annual fee. Once you have registered, you will be issued a  Business Number - BN .

Business registration forms are available in print at your nearest Access Nova Scotia centre or online through the Registry of Joint Stock Companies' Web site, the Nova Scotia Business Registry: http://gov.ns.ca/snsmr/nsbr/entry.asp. From there you can:

For more information, please contact:

 Registry of Joint Stock Companies
Service Nova Scotia and Municipal Relations
9th Floor, Maritime Centre
1505 Barrington Street
P. O. Box 1529
Halifax, Nova Scotia  B3J 3K5
Telephone: (902) 424-7770
Fax: (902) 424-4633
Toll-free (information): 1-800-670-4357
E-mail: joint-stocks@gov.ns.ca
Web site: http://www.gov.ns.ca/snsmr/rjsc/

Business Number

You will need a Business Number (BN) from the Canada Revenue Agency (CRA) for the following reasons:

The Business Number is a common identifier for many organizations and is now used by Service Nova Scotia and Municipal Relations, as well as the Workers' Compensation Board of Nova Scotia. 

If you have a Business Number and the structure of your business changes, you must register for a new BN. If, for example, you decide to incorporate your sole proprietorship, a new BN is needed.

For additional information on the Business Number, the following document is available:
Business Number - BN.

For more information, please contact:

 Canada Revenue Agency
Ralston Building
1557 Hollis Street
P.O. Box 638
Halifax, Nova Scotia  B3J 2T5
Fax: 902-426-7170
Toll-free (information): 1-800-959-5525
Toll-free (publications): 1-800-959-2221 (Forms and publications)
Web site: http://www.cra.gc.ca/menu-e.html

For further information on tax considerations, see the Business Taxes section.

Permits and Licenses

Many types of businesses require licensing from the federal, provincial and/or municipal government in order to operate. These requirements could include necessary permits, special permission to operate in your chosen location, or specific qualifications for you and/or your employees.

Each municipal government has the authority to issue its own business licences within its jurisdiction. Since no uniformity exists throughout the province regarding municipal licences for businesses, you should consult with the appropriate local officials to determine whether your business will be affected by local regulations and licensing requirements. Businesses (including home-based businesses) must also meet the zoning by-laws that control property uses in their municipality.

BizPaL is an online service that walks Canadian businesspeople through the process of finding comprehensive information about permits and licensing requirements from all levels of government. BizPaL helps you generate a personalized list of the business documents you need for the levels of government - local, provincial/territorial, and federal - you may have to deal with in order to grow or start up your business. BizPal is currently available in Nova Scotia for the Halifax Regional Municipality, Municipality of Pictou County, Municipality of the District of Shelburne, New Glasgow, Stellarton and Westville. For more information, the following document is available:

BizPaL - Business Permits & Licences

The Province of Nova Scotia also maintains the Nova Scotia Permits Directory which includes information on many permit requirements, as well as links to the municipalities of Nova Scotia.

For more information, visit the Nova Scotia Permits Directory Web site :

http://www.gov.ns.ca/snsmr/paal

Table of Contents

Top of page

Business Taxes

Income Tax

You must report your business income on an annual basis. Business income includes money you earn from a profession, a trade, a manufacture or undertaking of any kind, and an adventure or concern in the nature of trade or any other activity you carry on for profit or with a reasonable expectation of profit.

If you are self-employed, your business structure will determine how you remit taxes and report your income. If you are a sole proprietor or a member of a partnership, you can obtain income tax information from Canada Revenue Agency’s publications Business and Professional Income and Guide to Canadian Small Businesses. These publications will also give you an overview of the types of business expenses you can claim. Different rules apply to incorporated companies. Canada Revenue Agency’s T2 Corporation Income Tax Guide has more details on the filing requirements for corporations.

Self-Employed Income Considerations

Harmonized Sales Tax

You must register for and charge the Harmonized Sales Tax (HST) if you provide taxable goods and services in Canada and your total taxable revenues were more than $30,000:

If you are a public service body (charity, non-profit organization, municipality, public college, university, school authority, or hospital authority), this limit is $50,000.

There may be advantages to registering early, such as the right to claim the HST you pay on your business’s start-up expenses from the time you register. To register for the HST, you will need your Business Number.

For more information on the GST/HST, the following documents are available:

General Information for GST/HST Registrants http://www.cra.gc.ca/E/pub/gp/rc4022/
Guide for Canadian Small Businesses http://www.cra-arc.gc.ca/E/pub/tg/rc4070/

Tax Credits

A number of tax credit programs are available to assist businesses: Equity Tax Credits; New Small Business Tax Reduction (for incorporated businesses); Labour-Sponsored Venture-Capital Tax Credits; Research and Development Tax Credits; and Manufacturing and Processing Tax Credits. See the document Taxation Info-Guide or call Canada Business Nova Scotia for a copy.

For further information on the above, please contact the Canada Revenue Agency at:

Canada Revenue Agency
Ralston Building
1557 Hollis Street
P.O. Box 638
Halifax, Nova Scotia  B3J 2T5
Fax: 902-426-7170
Toll-free (information): 1-800-959-5525
Toll-free (publications): 1-800-959-2221 (Forms and publications)
Web site: http://www.cra.gc.ca/menu-e.html

Municipal Taxation

Nova Scotia has 55 municipal units, each with its own individual tax rate. Businesses in each municipality pay a Business Occupancy Tax based on an assessment made by the Property Valuation Services Corporation. If you are a tenant or property owner who occupies or uses commercial space, or operates a home-based business, you will be assessed for Business Occupancy Tax. The Business Occupancy Tax is a percentage of a business’ commercial tax assessment. There are three different categories and level of taxation that your business may fall into. Bill 191 amended the Municipal Governance Act  to allow the phase out of the Business Occupancy Tax over several years. The category your business is in determines when you will stop receiving business occupancy assessments and stop paying business occupancy tax. See the document: Business Occupancy Assessments.

For more information, please contact:
 Property Valuation Services Corporation
Suite 200
Park Place ll
238A Brownlow Avenue
Dartmouth, Nova Scotia  B3B 2B4
Telephone: 902-720-7872
Fax: 902-720-7873
Toll-free (information): 1-800-667-5727
Web site: http://www.pvsc.ca/

Payroll Deductions

Under the Income Tax Act, an employer is required to withhold any amounts relating to income tax from an employee’s pay. As an employer, you are holding these deductions in trust for your employees; therefore, you are expected to keep these funds separate from the operating funds of your business.

The Canada Revenue Agency offers payroll deduction tables that contain information to help you calculate income tax deductions. These are available on paper or diskette from your tax services office or tax centre. You may also download them directly from the CRA Web site:  http://www.cra-arc.gc.ca/tx/bsnss/tpcs/pyrll/menu-eng.html .

Table of Contents

Top of page

Protecting your Business

Incorporating your business

Incorporating your business establishes it as a distinct legal entity, which provides the ability to raise capital by selling shares, limited liability, and possible tax advantages. A business can be incorporated either provincially or federally. If a business is to operate primarily in one province, provincial incorporation may be sufficient. However, if a business will operate in multiple provinces, then federal incorporation may be advantageous. Additionally, a federally incorporated business will need to register in each provinCe in which it does business.

For more information on incorporating, the following documents are available:

Federal and Provincial Incorporation
Information Services - Corporations Canada
Online Federal Incorporation
Federal Business Incorporation - Canada Business Corporations Act (CBCA)

For more information on provincial incorporation, please contact:

Registry of Joint Stock Companies
Service Nova Scotia and Municipal Relations
9th Floor, Maritime Centre
1505 Barrington Street
P. O. Box 1529
Halifax, Nova Scotia  B3J 3K5
Telephone: (902) 424-7770
Fax: (902) 424-4633
Toll-free (information): 1-800-670-4357
E-mail: joint-stocks@gov.ns.ca
Web site: http://www.gov.ns.ca/snsmr/rjsc/

For more information on federal incorporation, please contact:

Corporations Canada
Industry Canada
9th Floor
Jean Edmonds Tower South
365 Laurier Avenue West
Ottawa, Ontario  K1A 0C8
Telephone: 613-941-9042
Fax: 613-941-0601
Toll-free (information): 1-866-333-5556
E-mail: corporationscanada@ic.gc.ca
Web site: http://corporationscanada.ic.gc.ca/

Intellectual Property

In Canada, the right to use or sell business names and certain products can belong to someone. This is known as intellectual property. The Canadian Intellectual Property Office (CIPO) is a government organization that protects rights associated with inventions, names of products and services, and copyrighted works. CIPO can explain how to protect any brand or special name, product, or invention you might have. They can also inform you if you are accidentally copying someone elses' intellectual property, which could otherwise result in potential infringement lawsuits.

For more information on intellectual property, please contact:

Canadian Intellectual Property Office
1575 Brunswick Street
Halifax, Nova Scotia  B3J 2G1
Telephone: 902-426-8604
Fax: 902-426-6530
Toll-free (information): 1-888-576-4444
TTY Toll-free (hearing impaired): 1-866-442-2476
E-mail: klein.cecile@cbsc.ic.gc.ca
Web site: http://www.cipo.ic.gc.ca/eic/site/cipointernet-internetopic.nsf/eng/Home

Privacy

Canada’s Personal Information Protection and Electronic Documents Act sets out ground rules for how private sector organizations can collect, use, or disclose personal information in the course of commercial activities. It balances an individual’s right to privacy with the need of organizations to collect, use, or disclose personal information for legitimate business purposes.

For information on your responsibilities under the Act, the following document is available:

Protection of Personal Information - Your Responsibilities

For more information, please contact:

Privacy Commissioner of Canada
3rd Floor, Tower B
Place de Ville
112 Kent Street
Ottawa, Ontario  K1A 1H3
Telephone: 613- 995-8210
Fax: 613-947-6850
Toll-free (information): 1-800-282-1376
TTY (hearing impaired): 613-992-9190
Web site: http://www.privcom.gc.ca/index_e.asp

Insurance and Bonding

Bonding and other types of business insurance can protect your enterprise from unpredictable damage and problems. Most businesses that have assets should have insurance protection. Think seriously about the type and amount of insurance your business requires, and to deal with a knowledgeable insurance company or broker.

For more information on insurance and bonding, the following documents are available from CBNS:

Business Insurance
Bonding

Table of Contents

Top of page

Hiring Employees

Things to Consider

The Human Resources Info-Guide has information on several topics related to employment and hiring, including:

Assistance Programs

The Wage Subsidies and Training Programs guide contains information on assistance available to employers for hiring employees or for training programs.

Workers' Compensation

The Workers' Compensation Board (WCB) of Nova Scotia provides financial and health care benefits to injured workers, and cost-saving programs and legal protection for employers registered with the WCB.

The Workers' Compensation Act requires that most firms which employ three or more workers at the same time register for coverage. This includes full-time, part-time, and casual workers, as well as sub-contractors. Some businesses do not require coverage.

For more information, please contact:

Halifax
Workers' Compensation Board of Nova Scotia
5668 South Street
P.O. Box 1150
Halifax, Nova Scotia  B3J 2Y2
Telephone: 902-491-8999 (general) or 902-491-8324 (employer services)
Fax: 902-491-8002
Toll-free (information): 1-800-870-3331
E-mail: info@wcb.gov.ns.ca
Web site: http://www.wcb.ns.ca

Sydney
Workers' Compensation Board of Nova Scotia
Suite 117
336 Kings Road
Sydney, Nova Scotia  B1S 1A9
Telephone: 902-563-2444
Fax: 902-563-0512
Toll-free (information): in Cape Breton 1-800-880-0003
Web site: http://www.wcb.ns.ca

Table of Contents

Top of page

Operating your Business

Bookkeeping

Bookkeeping is a method for recording financial transactions in a manner that is consistent, easy to understand, and accurate. Bookkeeping can be performed in several ways, though many are too complex for the average business owner and are typically left for professional accountants. It is a legal requirement that financial records provide a complete profile of the daily income and expenses of a business; there is no specified format.

Record keeping is essential to enable the business owner to make sound financial decisions and to satisfy the demands of many government agencies. Also, like having a concrete business plan, well-kept records will make matters easier when dealing with a bank or other financial institution.

For further information, as well as a detailed example of how to prepare a single-entry bookkeeping system, the following document is available:

Basic Bookkeeping

Banking

Business bank accounts

Although it is not necessary for a business to open its own bank account, doing so maintains a level of professionalism and reduces any ambiguity that may concern governments or creditors about where the money is really going. It is acceptable for someone in charge of a sole proprietorship to use his or her own personal account, but for the reasons listed above, money should be payable to an account in the business’s name.

Line of credit

Businesses that rely primarily on credit sales from customers typically rely on a line of credit from a bank or financial institution in order to have enough cash to deal with net working capital needs, such as rent and employee wages. A line of credit is an amount of capital that may be borrowed from the bank at any time, subject to interest rates and repayment conditions specified by the financial institution. The maximum amount that can be borrowed is determined by both the bank and the business operator, and usually depends on the past revenues of the business, as well as the projected cash flow.

Financing

Starting a business will probably require more resources than the operator has at his or her disposal, hence the need for capital: the term for money that finances business. Financing comes from a combination of debt and equity, with debt being comprised of short and long term loans, and equity being made up of the personal money of the business operators and their friends and family, as well as money from stockholders who own shares. However, for a small business just starting out, it is unlikely there will be any shareholders to provide a source of capital. For more information on financing options, please see the following document:

Financing Info-Guide

Equity

Having a high level of equity generally results in increased leverage for the company. Leverage is represented by the ratio of debt to equity, and demonstrates a higher capacity to obtain debt financing. A business proposal with equity of $1,000 and requiring financing of $3,000 would have a debt to equity ratio of 3:1. This is fine for an established company, which is likely to be able to pay off its debts, but most banks would prefer a business in its early stages have a ratio of 2:1 or 1:1.

Short and long term debts

A short term debt refers to a loan which will be paid off in a period of less than a year. Consequently, long term debts refer to a repayment period greater than a year. Long term loans are more difficult for a business to secure, and almost always require a business plan and cash flow statement to be presented to the lender.

Table of Contents

Top of page

Finding Information in Your Area

We have created a resource guide for each county in Nova Scotia, highlighting local and other resources you may contact for additional information or assistanCe with regards to your business. The following is a list of the available guides:

  Annapolis County Resources   Inverness County Resources
  Antigonish County Resources   Kings County Resources
  Cape Breton County Resources   Lunenburg County Resources
  Colchester County Resources   Pictou County Resources
  Cumberland County Resources   Queens County Resources
  Digby County Resources   Richmond County Resources
  Guysborough County Resources   Shelburne County Resources
  Halifax County Resources   Victoria County Resources
  Hants County Resources   Yarmouth County Resources

Top of page

Related Reading

Top of page