Small businesses, accounting for almost 98% of all Canadian companies, are essential for the country’s economy. The government of Canada understands their importance and offers new entrepreneurs incentives and access to funding. Entrepreneurs in Canada also benefit from a growing demand driven by the country’s growing population and desire for innovative products and services.
Aspiring entrepreneurs need to remember that there is a lot of competition for customers, especially in certain fields, and that success requires careful planning, including market research, financial management, and compliance with regulations. However, with the right strategy, plenty of determination, and a bit of luck, new entrepreneurs can build a successful business for themselves.
What You Should Consider Before Starting a Small Business
All small – and big – businesses start with an idea. However, an idea is not enough to make your business a success. Setting up a business, small as it may be, requires planning and preparation. Here are key factors you should consider before getting started.
Research the Market
Before you launch a business, research the market thoroughly. This will help you identify your target customers and understand what products and services have an actual demand for your target audience. At this stage, you should also analyse your competition, identify gaps in the market, and opportunities for differentiation. Use reliable sources, such as industry reports and Statistics Canada, to gain valuable insights into consumer behaviour and current market conditions.
Financial Planning
Depending on the type of business you want to launch, you may need to secure some funding to get all the necessary equipment for your business. Entrepreneurs in Canada can explore a range of financing options, including government grants, venture capital, crowd funding, and bank loans.
Canadian entrepreneurs can contact the Canada Small Business Financing Program (CSBFP) regarding business loans on favourable terms. You should also set up a dedicated bank account for your business to separate your personal spending and income from that of your business.
Registering Your Business
When you are ready to launch your business, you need to register it. Most new small businesses start as sole proprietorships, but other options include partnerships and corporations. Registering your business correctly ensures that your business complies with regulations. It will also allow access to benefits such as tax deductions.
Registering your business and obtaining the correct permits and licenses also helps you avoid legal complications. For example, if you are starting a food business, you will need a health permit, and a construction business will require a specific contractor license.
Taxes and Incentives
Another important step for aspiring entrepreneurs is to find out about their tax obligations. You can access guidance on tax compliance and deductions on the Canada Revenue Agency website. Many small businesses in Canada can benefit from small business tax credits, which can reduce tax liability and improve profitability. Using an accountant or a financial advisor can help you optimise your tax strategies and avoid tax penalties.
Best Small Business Ideas for Canadians
Online-Based Businesses
There are many ways Canadians can start a small online-based business, and for many of them, you don’t need advanced technological knowledge to make your business a success. Online-based businesses include running an e-commerce store, offering digital marketing services, freelancing, and subscription box businesses. Most online-based companies require minimal funds to get started, and you can start it as a side hustle alongside your day job.
E-commerce
Entrepreneurs can sell a wide range of products through e-commerce stores, from handmade goods and niche products to dropshipping. Platforms such as Amazon, Shopify, and WooCommerce make it easy for anyone to create an online store and reach customers both nationally and internationally.
However, your success in running an e-commerce store depends on not just finding the right products to sell but also on making your website easy to use and using effective marketing strategies to find customers. Entrepreneurs must also know how to manage a supply chain and employ strategies to build a loyal customer base. By identifying the right products and your target audience, e-commerce can be a highly profitable venture in Canada.
- What we like about e-commerce: Your startup costs are low, and there is a lot of potential for scaling up.
- What to consider: Prepare to master your digital marketing skills to reach customers and build your brand.
Digital Marketing
Businesses increasingly use digital platforms to reach customers, which has led to a high demand for digital marketers. If you have experience in social media management, search engine optimisation, pay-per-click advertising, and email marketing, you could offer companies your services as a digital marketer.
Many digital marketers start as sole proprietors, with the possibility of expanding into a full-service agency later on. Digital marketers can increase their credibility and attract high-paying clients by getting certifications from platforms such as Google and HubSpot. Scaling a digital marketing business involves developing strong relationships with clients and hiring skilled professionals.
- What we like about digital marketing: High demand and low startup costs.
- What to consider: Digital trends and algorithms change, so offering your clients the best service requires constant learning.
Freelancing
Professionals skilled in fields such as graphic design, writing, programming, and consulting can offer their services to clients as freelancers. There are several platforms where freelancers can offer their services, including LinkedIn, Upwork, and Fiverr and connect with clients from all corners of the world.
Working as a freelancer allows you to choose your projects, set your own rates, choose the hours you want to work, and work remotely. However, your success will depend on networking, building a strong portfolio, and consistently delivering high-quality work on time. You also need to manage your own marketing, relationships with clients, and financial planning. Furthermore, you will need patience, as building a steady stream of clients will take time, but once you have achieved this, freelancing can be both fulfilling and lucrative.
- What we like about freelancing: Minimal startup costs and plenty of flexibility.
- What to consider: Income can be quite inconsistent, especially in the beginning.
Subscription Box Services
Subscription box services cater to a growing number of people who want the convenience of receiving their favourite products regularly without the hassle of reordering every time. Entrepreneurs can choose from a wide range of products, including books, beauty items, snacks, and coffee, just to name a few.
One of the key benefits of subscription box services is its recurring nature; you will receive regular payments from your customers, for example, weekly or monthly depending on your delivery frequency. However, the number of companies offering subscription services is growing, so choosing your niche and high-quality products are key to success. You will also need to market your service to find customers and consistently deliver on schedule to keep them. While subscription box businesses offer good scalability, you need consistent innovation to keep customers and combat subscription fatigue.
- What we like about subscription box services: Regular payments make it easier to predict your income.
- What to consider: Your success depends on your ability to keep your customers, which requires innovation.
Service-Based Businesses
If working on a computer to run your business does not appeal to you, starting a service-based company may suit you better. These are more “traditional” small businesses but can be equally profitable and scalable as more modern, online-based business ideas. With options ranging from cleaning to pet sitting, most service-based companies can be started with low investment and provide a steady income.
Cleaning
There will always be a demand for both residential and commercial cleaning services, which makes starting a cleaning company a reliable business opportunity. When starting a cleaning company, you may find it easier to attract residential clients first, since getting commercial clients may require you to bid for jobs and more bodies on board, making them out of your reach if you are starting as a solo operator. You may also benefit from offering specialist cleaning services, such as using eco-friendly products only or moving in/out services.
While not investment-free, starting costs are low, requiring only cleaning supplies, marketing, and transportation. You can market your services for free online through social platforms or by asking your local brick-and-mortar stores to advertise your services. Word-of-mouth will also be an important tool in finding customers and building your reputation. As your client base grows, you can hire additional staff to scale your company and compete for larger cleaning contracts.
- What we like about cleaning: Steady demand, especially in urban areas.
- What to consider: Work is physically demanding.
Maintenance Services
If you are skilled in carpentry, plumbing, electrical, or general maintenance work, you can turn it into a profitable business with a steady income. Most entrepreneurs in this field start small, operating on their own and later hiring more staff as demand for their services grows.
Startup costs will vary depending on your line of work with tools and transportation requiring the biggest investment. You can advertise your services online, locally, and once you gain your first happy customers, through word-of-mouth. The key to success will be consistently delivering high-quality work, punctuality, and transparent pricing. Entrepreneurs in this field need to ensure they have the right qualifications and comply with safety standards and licensing regulations to operate legally.
- What we like about maintenance: Always in high demand and good potential for growth.
- What to consider: You need specialised skills and licenses to operate within rules and regulations.
Fitness Coaching
Canadians are increasingly looking for personalised advice on living a healthier life. If you are a health and fitness enthusiast, you can offer in-person training, group classes and even online coaching tailored to fitness goals such as strength training and weight loss. Before starting, consider getting certified as a fitness coach as it will enhance your credibility and help attract more clients.
While starting as a fitness coach will not require big monetary investments, building a client base can be slow and you will face a lot of competition. Therefore, you need to consider how you will stand out in a crowded market to find clients. One option is to offer some free or discounted classes to attract your first clients and build your reputation. Scaling options include sharing your expertise through YouTube, subscription-based programmes, and fitness apps.
- What we like about fitness coaching: Growing demand for both in-person and online fitness services.
- What to consider: Competition for clients can be fierce.
Pet Services
Canadians love their pets, but many people struggle to find the time to take their pets out regularly or someone to care for them while they go on holiday. This opens up opportunities for entrepreneurs to launch pet service companies, such as pet sitting, grooming, walking and training services. The benefits of launching a pet service company include that you can start it as a side hustle, for example, offering pet sitting services on weekends when pet owners are away.
Your startup costs will depend on the type of service you wish to offer. While you can start a sitting, walking, or training service with no costs at all, starting a pet grooming business will require investment in equipment and possibly premises unless you are doing it from home. Word-of-mouth is always an effective tool with services such as these, and you can also use social platforms and local advertising boards to find clients. A typical way to start is as a solo operation and hire more staff when demand grows.
- What we like about pet services: You get to work with animals and there is growing demand.
- What to consider: May be physical work and some pets may be difficult to handle.
Food and Beverage Businesses
The food and beverage sector offers exciting opportunities for Canadians who are passionate about food and/or drinks. There are a range of options available for budding entrepreneurs, ranging from operating a food truck to starting a microbrewery. The startup costs are often higher than with the previous business ventures and competition can be fierce, but there is plenty of scope for growing the business with the right branding and products.
Catering or Food Truck Business
If you are interested in launching a food related company, running a catering company or a food truck can be a great way in since the startup costs are lower than starting a traditional restaurant. With a food truck, you can sell your goods at events and festivals, while a catering company can offer its services, for example, at weddings, christenings, and corporate events. Both options can eventually lead to a permanent restaurant, should that appeal to you.
The key to success in this field where there is plenty of competition lies in creating a strong brand, high-quality food/drinks, and excellent customer service. You need to have the correct licenses to prove that you are meeting food safety regulations. These vary by province and territory, so if you are planning to offer services across provincial/territorial borders, ensure you have the correct licenses for each. With the right products and marketing, food truck and catering businesses can be highly profitable and offer opportunities for expansion.
- What we like about food trucks and catering: Your startup costs are lower than a permanent restaurant.
- What to consider: A lot of competition and income may fluctuate by seasons, particularly for food trucks.
Cafe or Bakery
Starting a bakery or cafe can be a very rewarding business, but the startup costs are often high, especially in popular urban areas. If you have or can get financing to secure a property for your bakery or cafe in the right location, catering to various dietary preferences, such as vegan or organic goods, can help you stand out and build a loyal customer base.
Choosing your location carefully is key, as high foot traffic will help drive consistent sales, as is balancing the cost of ingredients and pricing strategy to ensure profitability. While most of your customers are likely to be local, you can reach a wider audience through a strong online presence for your cafe or bakery. This can open avenues to growth, for example, through subscription services.
- What we like about cafe/bakery: Lots of interaction with customers and real-time feedback on products.
- What to consider: High startup and operational costs.
Meal Preparation and Delivery Service
Canadians lead increasingly busy lives with less time for planning and cooking healthy meals. This has led to a growing demand for meal delivery services. By offering meal plans that are customisable and made with fresh, diet-specific ingredients you can attract a loyal client base and by making it subscription based, you will receive recurring payments.
Companies offering meal delivery services need to provide clients with an easy way to order their meals, usually through a website or an app. Unless you have the required skills yourself, you may need to hire a professional to create your order platform, which will increase your startup costs. You will also need to ensure you have the required licenses and certifications to run a food-based business. Once you have the right structures in place, meal delivery service can be a highly profitable venture with good scalability.
- What we like about meal prep and delivery: Easy to turn into a subscription service, meaning recurring, more predictable income.
- What to consider: You will need to set up and manage a user-friendly order platform for hassle free ordering and payments. ‘
Craft Brewery or Distillery
In recent years, the demand for locally brewed beers and distilled spirits has been growing in Canada. Starting your own craft brewery or distillery allows you to create unique alcoholic drinks that will appeal to beer or spirit connoisseurs. Many Canadian craft breweries and distilleries also operate their own tap rooms or restaurants, making this a highly social and fun business.
One downside to starting a brewery or distillery is the startup costs. While you may have plenty of experience of brewing for your own use, turning a home brew into a profitable business requires upgrading your equipment, premises, and getting all the right licenses. You also need to build a strong brand and distribution strategy, whether you are selling to pubs and restaurants, direct to consumers, or both. Offering brewery tours, tasting events, and limited edition flavours can help find customers together with a strong online presence.
- What we like about brewery/distillery businesses: Growing demand for unique, locally produced craft beers and spirits.
- What to consider: Requires considerable upfront investment and compliance to strict regulations.
Final Thoughts on Starting a Small Business in Canada
Starting your own company in Canada is an exciting opportunity to create your own brand. With a diverse market, a wide range of industries to explore, and government support, entrepreneurs can build a successful business. However, you need to be prepared to adapt your services as customer preferences change to grow and stay profitable.
By choosing the right niche and business strategy, securing funding (if necessary), and staying informed about the latest trends within your industry, you can turn your idea into a thriving small business with the option to scale up in the future.
Sources
- Small Business Financing Program – https://ised-isde.canada.ca/site/canada-small-business-financing-program/en
- Canada Revenue Agency (CRA) – https://www.canada.ca/en/revenue-agency.html
- Government of Canada: Advice on starting a business – https://www.canada.ca/en/services/business/start.html
- Business Development Bank of Canada – https://www.bdc.ca/en/articles-tools/start-buy-business/start-business/how-start-business-canada
- Canadian Federation of Independent Business – https://www.cfib-fcei.ca/en/site/exclusive-tools-resources
- Shopify: Small business ideas – https://www.shopify.com/ca/blog/low-investment-business-ideas
- CRA Checklist for Small Businesses – https://www.canada.ca/en/revenue-agency/services/tax/businesses/small-businesses-self-employed-income/checklist-small-businesses.html
- Scotiabank: Advice on starting a small business – https://www.scotiabank.com/ca/en/personal/advice-plus/features/posts.everything-you-need-to-know-about-starting-a-small-business-as-a-newcomer.html
