Starting a new business is a major undertaking requiring many steps and careful planning. It’s not just a matter of choosing a name and opening a business account at your bank. There are many steps and several issues to consider before making anything official. The best advice would be to sit down with an experienced business lawyer to determine your best path forward depending on your needs, as priorities can change depending on the type of business, the number of people involved and more. In this series, we will provide an overview of some of the key essentials any new startup should consider as they are planning and taking steps to open a new business in Ontario.
Create a Business Plan
A business plan is a document setting out key elements of the business, including the goals and objectives of the company, the names, titles and responsibilities of the individuals involved, the target market and the estimated financial projections. A business plan will be required if you plan on seeking financial investors or loans for the company, but even if are not looking to raise or borrow capital, a well-constructed business plan will help to focus your efforts, set goals and start off wiht the best chance for success.
A well-constructed business plan should address the following:
- A mission statement – this is the company’s overall driving force and reason for being. What is the purpose of the business? What market need will it help to meet, and how?
- Milestone timeframes – what are your realistic projections for 6 months down the road? A year? Five years?
- Financial forecasts
- Sales and marketing strategies
- Identification of key competitors
Once the plan exists, you can use it to mark achievements, measure success or areas that need attention. It should also be treated as a living document that can be updated and amended in response to market changes, shifts in focus and other significant changes that are natural as a business grows.
Select and Register a Business Name
Registering a business name is key for any new business, in order to protect the new brand and to ensure the name is not already in use before investing significant funds into marketing. The provincial government also requires a business name registration for any of the following circumstances:
- the name of the business is different than the registrant’s own full name if the registrant is an individual
- your business is a corporation operating under a name other than its corporate name
- your business is a partnership carrying on business under a firm name other than the full names of all the partners
- your existing general partnership or limited partnership has a name that is different from the registered firm name
- your business is a limited liability partnership, extra-provincial limited liability partnership, or extra-provincial limited liability company
- your business name has expired and can no longer be renewed
Before registration, it is important to conduct a thorough search of the name(s) you’re considering to ensure they are not taken, or so similar to another business that they might cause confusion. Once the name is registered, you’ll be provided with a Master Business License which can be used as proof of registration when opening business accounts with a financial institution.
You can search a name within the province and obtain a results report using the Enhanced Business Name Search for a nominal fee. Once you’ve found a name that you can use, you’ll need to register it with the province. You can complete the registration online, in person or by mail, and the registration will be in effect for five years. If you wish to extend beyond that period, you will need to renew before the original registration expires.
In our next installment, we will discuss choosing a business model, and obtaining necessary licenses.
The skilled business lawyers at GLG LLP in Toronto regularly assist corporate clients with a variety of issues, including the configuration and structure of a new or evolving venture in a way that is most beneficial to those involved. Further, we advise and represent corporate clients on related matters including commercial real estate ventures and litigation if necessary. Call 416-272-7557 or complete the online form to arrange a consultation with one of our lawyers today.