What to know when starting a business

We think the things you need to know when starting a business fall into four categories:

Even before your business exists, there are several decisions to think about and research, and a few actions you’ll need to take to create your business.

Very early in your business’ life, you will gain tremendous value from developing a business plan.
A business can survive without a business plan, but it is very unlikely to thrive and grow without one.

You already have many skills, which will help you to create your own, unique, business.
But to be successful, there are a few skills that all business owners should possess.

Having a general knowledge of tax rules can help your business throughout its life, from financing decisions to succession planning.

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The absolute necessities for starting a business

How to register a company name

In Manitoba, go to the Companies Office website and create an account. After logging in, you will be able to submit a name reservation. This process will let you know if the name you wish to register is acceptable and, if approved, the name will be reserved for you.

Note that there are several restrictions for business names. They must contain both a distinctive element and a descriptive element, and must not be too similar to any existing business names. Visit Companies Office Name Reservations for more information.

Once your name is reserved, you will receive a Registration Number. To incorporate or register your name, log in to the Companies Office website again to complete the process. If your business will operate in other provinces, you may have to register the name in each province.

When registering your name, you will be asked if you have a business number (BN). If you answer “No,” then your business will be assigned a business number automatically and the Companies Office will send you your business number by email.

Many new business owners will begin by registering as sole proprietor, until business profits justify the additional cost of incorporation. However, depending on your situation, you may wish to incorporate your business immediately or register it as a partnership. We recommend that you speak to your accountant or lawyer before registering.

Once you have established your business’ legal name, go to social media (such as Facebook, Instagram, YouTube, and LinkedIn) and create a free account on each platform using your business name. While there is no obligation to post any content, your business’ name and social media presence will be secured for any future marketing efforts.

How to get a GST number

There are no obligations for you to register for a Goods and Services Tax (GST) number until your business has gross revenue of $30,000 or more over any four consecutive quarters (or in any single quarter). Until then, getting a GST number is optional.

So why get one? Registering for GST obliges your business to charge GST on most goods and services you provide. However, once you are a GST registrant, you are allowed to claim back all GST paid on qualified business purchases. As such it can sometimes be advantageous to register early if you have large start up costs.

To register for a GST number, you will first need a CRA My Business account. You can then register for a GST number through your CRA My Business account.

For further information, visit General Information for GST/HST Registrants. Note that once you have registered for GST, you will be required to file regular GST returns, which will require accurate and up-to-date bookkeeping. There are several filing frequencies available, and several ways of calculating the amounts. A short conversation with your accountant can provide significant value by helping you to understand the various tradeoffs and requirements.

How to authorize an accountant as a CRA representative

To enable your accountant to communicate with CRA on your behalf, including filing returns and viewing outstanding balances, you will need to authorize your accountant via your CRA My Business account. If you already have a CRA My Business account, you can do this by logging into your account and going to Profile. If you do not yet have an account, you will need to begin by setting up an account. 

For detailed instructions on how to authorize your accountant as a CRA representative, see our helpful CRA My Business Account Setup guide.

How to get an RST/PST number

The rules surrounding Retail Sales Tax (RST) [Manitoba’s Provincial Sales Tax (PST)] vary greatly from business to business. If you want to know if you need an RST/PST number, we recommend you discuss the nature of your business with an RST/PST representative who will help you understand whether you need to register. Contact a representative at Manitoba Finance.

As with GST, if you register for RST/PST, you will be required to file regular returns.

Types of insurance you may need

Insurance is a critical element in protecting your business. Following are a few of the many types of insurance to consider:

• Tools and equipment insurance
• Liability insurance
• Life insurance
• Disability insurance
• Critical illness insurance

There are several factors to consider when deciding which types of insurance you need:

• Legal requirements
• Financing requirements
• Industry risks
• Tax implications

Choosing the right insurance for you and your business will require research. We recommend discussing these decisions with your business advisors, including several trusted insurance brokers and a lawyer.

How to do your bookkeeping

Bookkeeping consists of keeping records and organizing financial transactions in a business. The information can then be presented to owners, shareholders, accountants, etc., to make important decisions and plan for the future of the business.

You will need to decide who will be part of that process, who will compile the information and who will enter the data into the software. It can be you, a friend, a spouse, an employee, or a professional bookkeeper. When evaluating the options, consider factors like cost, time, risk and cost of errors and internal controls.

You will also need to decide what software will be used for your bookkeeping.  You can consider recording these transactions in a manual synoptic prepared in Microsoft Excel or Google Sheets. There are also online and desktop software available, such as QuickBooks, Xero, Sage, etc.

Talbot & Associates has a dedicated bookkeeping team ready to help you through selecting software, setting it up and teaching you or your chosen bookkeeper how to do the bookkeeping for your business. If you are interested in hiring a Talbot & Associates bookkeeper, they can also assess your bookkeeping needs and provide a quote for their services.

How to do your payroll

You become an employer the moment you hire an employee and pay wages. Note subcontractors are not the same as an employee, and it’s very important to distinguish between them.

As an employer, you gain responsibilities and must abide by Employment and Industry Standards. You will need to register for a payroll account through CRA MyBusiness account. If your employees are part of a union, you will need to be familiar with the standards and fee structure of their union and remit dues accordingly.

Once your payroll account with CRA is created you will be expected to remit source deductions at a frequency set by CRA. These source deductions, as the name implies, are amounts calculated and deducted from source income (gross amounts before other deductions are calculated) and remitted to the CRA on behalf of your employee(s). The most common deductions include CPP contributions, EI premiums, employment insurance, and income tax.

It is recommended to have a separate account for these funds as they do not belong to your business, and you will have to remit these contributions to CRA along with your portion of the CPP contributions and EI premiums.

You will need to decide who should be part of this process, keeping in mind the confidential nature of this information. You will also need to decide which software or method to use. There are other decisions to make, such as pay cycle frequency, vacation rate (minimum 4% to start), treatment of general holidays, etc. Talbot & Associates has a dedicated team of payroll specialists ready to help you through this complex setup and process.

The Workers Compensation Board (WCB)

If you have employees, you may need to report your payroll to the WCB and pay the assessed premium. However, the rules related to WCB payments vary considerably between industries, so we recommend that you contact the WCB directly to discuss your business.

How to choose the right bank

There are many options to choose from when selecting the banking solutions for your business. Consider the following questions before meeting with a bank:

• What kind of accounts do I need? Many businesses start with a chequing account and a savings account.
• How many transactions will I have each month? Many accounts have transaction limits. Knowing what you need before you start looking will help you make the right decision.
• Will I have foreign currency transactions? If so, you will need to discuss these needs with your banker.
• Will I be incorporating my business? As a separate legal entity, corporations are legally required to have a separate bank account.

After you have identified your needs, explore your options, meet with several banks or credit unions, and ask a lot of questions to see which option best suits your needs.

How to choose the right lawyer

Selecting the right lawyer for you is, to some degree, a matter of personal preference. However, you will want to select a lawyer who has experience in your business’ industry and is someone you’re comfortable working with.

A lawyer can help you:

• Incorporate your business
• Maintain your corporation’s minute book
• Protect your estate
• Plan for business succession

You can search for a lawyer in Manitoba on The Law Society of Manitoba’s website.

How to avoid computer and security issue

Securing your business’ computer systems is crucial to avoid security issues, data breaches, and other potential problems.
Here are some steps you can take to avoid computer and security issues:

1. Use strong passwords: Encourage all employees to use strong passwords that include a combination of upper and lowercase letters, numbers, and symbols. Passwords should be unique and not easily guessable.
2. Implement Two-Factor Authentication (2FA): 2FA adds an extra layer of security to your business’ systems by requiring users to provide additional information beyond their password to log in.
3. Keep software up to date: Regularly updating your software, including your operating system and applications, ensures that you are protected against known vulnerabilities.
4. Use antivirus software: Antivirus software can help detect and prevent malware from infecting your business’ systems.
5. Limit access to sensitive information: Only grant access to sensitive information on a need-to-know basis, and implement role-based access controls to ensure that employees only have access to the information they need to do their job.
6. Back up data regularly: Regularly backing up your business’ data ensures that you can recover from data loss due to hardware failure or cyber attacks.
7. Educate employees on security best practices: Provide training to all employees on security best practices, such as not clicking on suspicious links or downloading unknown software.

Talbot & Associates offers IT consulting services to help you protect your computer systems.
To learn more, visit our IT Department service page.

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The importance of a business plan

“By failing to prepare, you are preparing to fail.”

Benjamin Franklin

Developing a comprehensive written business plan is crucial for the success of your business. This process will force you to summarize all your thinking, researching, evaluating, and consulting into an understandable and actionable report.

A business plan serves as a roadmap that outlines goals, strategies, and financial projections. It can assist in securing funding from investors or lenders by demonstrating a solid understanding of the market, potential risks, and a feasible path to profitability.

A business plan also encourages disciplined decision-making, facilitates effective resource allocation, and acts as a benchmark for measuring progress and adjusting strategies.

Some of the critical elements of a good business plan include the following:

1. Preparing a projected income statement and balance sheet
2. Preparing projected cash flow statements
3. Developing a marketing plan
4. Determining your target market
5. Refining what products and services you will be offering
6. Determining the price of your products and services
7. Researching the cost of producing goods and services
8. Considering whether financing will be required
9. Determining whether additional help and skills will be required

Investing time and effort into developing a comprehensive written business plan increases the likelihood of success and sustainable growth and will require tremendous input from people with training and experience in running a successful business.

Talbot & Associates can guide you through the process of developing a business plan and can provide you with valuable input and support as you develop your business plan.

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The skills you need to be successful

Over the past three decades, we’ve helped many entrepreneurs start their business. Almost every business model was different: some are in the city and some out of town, some selling products and others providing services.

If there is one thing that all these entrepreneurs have in common, they all agree that it was hard work, with many skills to learn and details to manage.

For a business, the skills you need to be successful fall into three foundational categories:

1. Technical skills
2. Marketing skills
3. Management skills

While you bring your own unique set of skills to your business, you must develop all three of these foundational skills, the three legs, to be successful.

Technical skills

These are the skills necessary to provide the product or service desired by the market. The more refined your technical skills and abilities are, the more superior your product or service will be and the greater the odds of your business thriving.

It is essential that you continually strive to improve these skills and train your employees to perfect their skills too. This will help you create a positive reputation for your business. Most business owners have good technical skills but struggle with marketing and management.

Marketing skills

Marketing is the ability to attract and keep clients and customers. To be successful, you must learn how and where to advertise and be able to connect with your target market.
Many business owners struggle with marketing. Marketing can be especially challenging if you’re shy or often find yourself easily stressed and impatient.
You can improve your business marketing by developing the following skills:

• Understanding your target audience
• Crafting a compelling value proposition
• Prioritizing brand consistency
• Building strong relationships with customers

While marketing comes naturally to very few people, it is a skill that can be learned, developed, and improved with practice, time, and coaching.

Management skills

Management skills include the following areas:

1. Philosophy
2. Pricing
3. Tools
4. People
5. Time Management
6. Hiring
7. Motivating
8. Business Profitability
9. Mentoring
10. Psychology
11. Income Tax

1. Philosophy

To be successful, you need to have the right philosophy. Your success depends on what you know so you need to make learning your number one priority. You should strive to work harder on yourself than on your business.

2. Pricing

Successful businesses price their products and services based on value. Determine the value of the product or service you provide, and what people are willing to pay. Learn to conquer the fear of price discussions with clients or customers and charge what your product or service is worth.

3. Tools

Using the right tools, whether it’s a wrench or a software, will make a remarkable difference to your bottom line. Maximizing your time and your employees’ time depends on having the tools you need to execute your work efficiently.

4. People

One of the biggest flaws of an entrepreneur is wanting to do everything themselves. There are tasks at which you will excel and others at which you will be much less effective. Try to work with people who excel where you’re struggling, so you can focus your time on things only you can do well. At the beginning, you can’t hire a whole team, but as soon as you have enough momentum, think about delegating tasks like cleaning or bookkeeping to free upto your time.

5. Time Management

With a limited number of working hours in a year, you need to make every minute count. Look at your day, dissect your time, delegate where you can, and focus the bulk of your time on the tasks only you can do to improve your business.

6. Hiring

Hire the right team for you. Hire based on the things that really matter – philosophy, heart, and core values. It will save you trouble in the long run (you can train skills, but you can’t train attitude!), and having a team you can laugh and work well with will make coming to work so much more fun. Ensure that what matters to you matters to your employees.

7. Motivating

Develop a culture where people are excited to come to work and are motivated to do what is right for the business and your customers. Train your team to think like owners.

8. Business Profitability

Prepare financial statements on a regular basis (every month or quarter) and prepare projections so that you can analyze where you’re going with your business. These reports are critical to sustaining a profitable and healthy enterprise. Hiring a good bookkeeper and accountant to prepare and explain these reports can help you maintain high profitability.

9. Mentoring

Hire a mentor. A good mentor can help keep you motivated, focused on what is important, and can give you the confidence to execute the hard changes that will improve your business. Be sure to select someone who shares your core values, has experience and knowledge preferably superior to yours, and will be honest enough to tell you what you will not want to hear.

10. Lifestyle

Nurture a balanced lifestyle. We often take care of our clients, customers, and team and forget to take time for ourselves, our families, and our communities. Learn to invest in those around you and you will become a much more successful business owner.

11. Income Tax

With a successful business, you will generate both profits and income tax bills. There are two important strategies for reducing the amount of income tax you will pay, legally and ethically:

• Selecting an accountant who is proactive, well-informed, experienced, and, most importantly, who cares about you.
• Being informed and learning all you can. Attending a business tax seminar could reduce your annual tax bill by thousands of dollars for years to come.

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The value of attending a business tax seminar

Talbot & Associates offers a wide range of courses, retreats, keynote speakers, sessions and presentations. Our business tax seminar will help you reduce the amount of business tax you pay each year.

For small businesses, minimizing tax liability is essential for several reasons:

• Increased profitability: By reducing tax expenses, small businesses can increase their profits, which can help them reinvest in the business, expand their operations, or improve their products or services.
• Cash flow management: Paying less taxes can help small businesses manage their cash flow more effectively. With more cash on hand, they can pay off debts, purchase new equipment, or invest in new ventures.
• Competitive advantage: When small businesses pay less taxes, they can offer their products or services at a lower price compared to their competitors. This can give them a competitive edge in the market and attract more customers.
• Compliance: Knowing how to minimize tax liability can help small businesses comply with tax laws and regulations. It can also prevent them from facing costly penalties and audits.

This seminar will cover what you need to know about taxes if you are looking to start or improve your business.

For more information, visit our:

If you have any questions about starting or improving your business, feel free to contact us and we will be happy to help.