Welcome to Small Business 101

Starting a small business is an exciting journey! In Canada, 95,000 new businesses are created annually, and small businesses contribute 41% of the nation’s GDP. However, only 45% survive beyond 10 years. With effective business planning and management, we can help your business achieve long-term success!

What & Why

What is a Small Business?

A small business typically:

  • Has fewer than 100 employees (or fewer than 5 for micro-businesses).

  • Offers products or services as a sole proprietorship, partnership, or corporation.

Small businesses also benefit from the Small Business Deduction, which helps owners reinvest and grow through lower tax rates.

Key Statistics About Small Businesses in Canada (Source: Key Small Business Statistics 2023):

  • 1.21 million businesses exist in Canada, and 97.8% are classified as small businesses.

  • 55% of these businesses are micro-enterprises (1–4 employees).

  • The small business sector contributes 35% of Canada’s GDP.

  • 100,000 new businesses are created each year on average.

  • 85% of businesses survive their first two years, but only 39% survive beyond 10 years.

While these statistics highlight both the opportunities and challenges of small business ownership, having a solid business plan is a critical step toward success.

Why Start a Small Business?

Key benefits include:

  • Pursuing your passion and maximizing your skills.

  • Achieving work-life balance and financial rewards.

  • Innovating and making your entrepreneurial dreams a reality.

While starting a business involves risks, it’s also a great opportunity for independence and growth.

The Importance of a Business Plan

A business plan is a roadmap for your business, helping you:

  • Analyze the market and identify opportunities.

  • Understand your resources and allocate them effectively.

  • Explore and evaluate your options.

  • Set clear goals and outline actionable steps to achieve them.

A strong business plan reduces the risk of failure and ensures you’re heading in the right direction. Many banks offer free business plan templates to help you get started. Researching and crafting a thoughtful plan is an investment in your success. Remember, your business plan isn’t static—it should be regularly reviewed and updated as your business evolves.

Decision, decision…

Choosing the Right Business Structure

When starting a business, selecting the right structure is crucial. The three main options—sole proprietorship, partnership, and corporation—each come with unique advantages and considerations. Here’s a quick guide to help you decide:

1. Sole Proprietorship
The simplest and most common structure, a sole proprietorship is owned by one person.

  • Pros: The owner keeps all profits and has full control.

  • Cons: The owner is personally responsible for all losses and liabilities.

2. Partnership
A partnership brings together multiple individuals to run a business.

  • Pros: Partners can focus on their areas of expertise and share responsibilities.

  • Cons: Clear agreements on roles, responsibilities, and profit sharing are essential to avoid conflicts.

3. Corporation
A corporation is a separate legal entity with its own rights and obligations.

  • Pros: Canadian private corporations may benefit from the Small Business Deduction reducing taxes and allowing for reinvestment.

  • Cons: Higher registration and accounting costs. Shareholder meetings and proper record-keeping are required.

Need Help Deciding?
Consulting an accountant or lawyer can provide tailored advice based on your goals. For incorporation, visit Corporations Canada (federal) or Service Ontario for online registration and requirements.

What’s Next After Starting Your Business?

Congratulations on launching your own business! Here is a breakdown of what you should do next:

1. Register Your Business Number (BN) and GST/HST Account
A Business Number (BN) and GST/HST account are essential for tax purposes. Registering early ensures your business stays compliant with government regulations.

2. Build Your Business
From creating a website to designing business cards and finding office space, there are countless details to address.

  • Take your time: Focus on doing it right, not just doing it fast.

  • Use your business plan: If you already have one, it’s an invaluable guide. If not, now’s the perfect time to create one!

3. Manage Your Money
Even at the start, having a solid handle on your finances is crucial.

  • Bookkeeping: Regularly update your business records to stay organized.

  • Consult an Accountant: Even if you’re not ready to hire one full-time, consulting a professional early can save you money now and in the future.

4. Stay on Top of Accounting
Accounting is the backbone of any successful business—it tracks income, expenses, and overall financial health.

  • Small Business Tip: When the time is right, hiring an accounting firm can free you from worrying about CRA regulations, financial statements, and tax returns, so you can focus on growing your business.

5. Protect Your Interests with Legal Contracts
Verbal agreements leave room for misunderstandings. A written contract prepared or reviewed by a lawyer can safeguard your business and clarify responsibilities.

  • Don’t forget employment contracts—these can include important clauses to protect your business.

Growing

Growing Your Business

1. Review and Improve Regularly
Don’t wait for year-end to evaluate your business performance. Regular reviews—monthly, quarterly, or semi-annually—can help you:

  • Compare your plans with actual results.

  • Celebrate achievements.

  • Document unexpected challenges and how you handled them.

  • Update your plans as new opportunities arise.

Involve your stakeholders in these reviews. Their insights can be invaluable in steering your business toward greater success.

2. Plan for Expansion
Growing your business could mean:

  • Adding new products or services.

  • Opening a new location.

  • Acquiring another business.

Expansion should align with your business goals and be carefully planned to minimize risks and costs while maximizing potential.

3. Include Personal Goals in Your Plans
Your business success should support your personal goals. To ensure you’re on the right track, consider:

  • Setting clear personal financial goals.

  • Consulting with a financial advisor to maximize your wealth.

  • Bridging the gap between your accountant and financial advisor to ensure they’re working toward the same objectives.

Winnie Yau Chartered Professional Accountant Professional Corporation

Welcome! We’re so glad you’re here.

Starting or upgrading your business is an exciting and rewarding step. Small businesses are the backbone of our economy, and we’re here to guide you through every stage—understanding, planning, and achieving success.

At Winnie Yau Chartered Professional Accountant Professional Corporation, we aim to be your trusted business partner. Our core values are rooted in integrity, fairness, and respect. We are committed to building long-term relationships based on mutual trust and understanding. By taking the time to learn about your unique needs, priorities, and goals, we strive to provide exceptional service tailored to you.

Our Services
We specialize in serving self-employed individuals and small business owners with a wide range of services, including:

  • Tax Services: Preparation and filing of corporate and individual tax returns

  • GST/HST Filing: Accurate and timely submission of GST/HST returns

  • Financial Statements: Preparation and analysis for informed decision-making

  • Payroll Services: Streamlined payroll management, including T4 (employment income) and T5 (dividend income) slips

  • Business Advisory: Strategic guidance to help grow and optimize your business

  • Bookkeeping: Collaborative and customized bookkeeping solutions to fit your preferences and needs

Contact Us
Let us help you turn your business goals into reality.

  • Hours: Monday to Friday, 9:00 AM – 5:00 PM (Closed on public holidays, Easter Monday, and Remembrance Day)

  • Mail: 18 King Street East, Suite 1400, Toronto, Ontario M5C 1C4, Canada

  • Phone: 647-667-8760

  • Email: info@winniecpa.ca

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