How to Start a Business in 12 Steps

Take these steps to get your business up and running.

How to Plan and Launch Your Business

Congratulations on making the decision to take your side hustle, passion or big idea to the next level! Whether your business is still just an idea or you’re already taking steps to make it happen, keep reading to learn how to get your business off the ground.

Content in this Article

Plan:

Launch:

7. Register or Incorporate Your Business
8. Open a Business Account
9. Set Up Your Payments and Other Systems
10. Protect Your Business
11. Hire Your First Employee(s)
12. Promote Your Business

1. Validate Your Business Idea

No matter what type of business you want to start—maybe you want to sell gourmet popsicles or open a consulting firm—making sure your business idea will work is an important step to take before you leave your job and invest your savings. Asking yourself these seven questions can help you decide if you’re ready to take the plunge:

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Is your idea feasible?	The business is legal You can perform the duties required You have the necessary skills and qualifications
Is there a market?	Conduct market research Identify your target customer
Can you take on the competition?	Identify your main competitors Develop your competitive advantage
Can you afford to start?	Understand your start-up costs and working capital needs Know your funding or financing options
Can your business comply?	Consult with your local municipal office on regulations and licensing requirements Check that your business won’t violate zoning or land use bylaws
Are you confident you’ll get sales straight away?	Try to secure guaranteed work before you start Have a marketing plan and sales channels ready so you can get customers immediately
Do you have what it takes?	If you have everything above covered, you’re on the right path

Tip: Still not sure if your business idea will fly? Here’s a checklist that can help you get to the start line.

2. Create a Business Plan

Your business plan is an opportunity to clearly define your business, think through some of the nitty-gritty parts of business ownership and define a path forward to help your business succeed.

Your business plan should include things like marketing and pricing strategies, how your business will operate, cash flow needs and how you’ll protect yourself against potential risks.

Having a business plan that takes all that (and more) into account can help you in a few different ways. First, it can serve as a roadmap for your business so you can be prepared for any issues you encounter and have an idea of what’s next.

It can also reveal any gaps you need to address. Ever start cooking a meal and realize you’re missing an important ingredient? Without a business plan, you may miss crucial things that could make a big difference in the success of your business.

Finally, it shows potential investors that you’re serious about your business, which can increase your chances of securing funding.

Learn more about creating a business plan or try the Business Plan Builder now to start working on your plan today. It’s a comprehensive tool that guides you through a series of questions, offering resources and providing a framework for success.

3. Determine Start-up Costs and Working Capital

Understanding the ins and outs of your business’s finances, including your start-up costs and working capital, is helpful in more ways than one. However, before we dive into the benefits, here’s a quick overview of a few important financial terms:

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Start-up costs	One-time costs you’ll need to cover when starting your business. Keep in mind that different businesses will have different start-up costs. Examples: Rent deposit, licences and permits, employment recruitment and training
Working capital	Money you need on hand to keep your business running and manage fluctuations in cash flow before you start making a profit. Examples: Rent, employee wages, utilities, supplies, ongoing marketing To calculate working capital, simply estimate your monthly costs—our Start-up Costs Calculator can help you add these up—transfer those totals to a cash flow template and add your sales estimates.
Cash flow	Cash that comes in and goes out of your business each day.
Profit	How much you make off your product or service after all costs are covered. This amount is what your business will have to pay taxes on at the end of the year.

Calculating your start-up costs and working capital can help you know when you’ll break even and turn a profit. It could also help you secure loans and attract investors. Another benefit of knowing your numbers? You can use that information to potentially lower your tax bill and create a cash surplus for peace of mind. Learn more about estimating your start-up costs and working capital.

4. Decide on a Pricing Strategy

The ideal price for your product(s) or service(s) will help ensure you make sales, cover your overhead costs (the costs you’ll need to cover to start and run your business) and turn a profit (defined in the section above). Here are six popular strategies to consider:

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Cost-plus pricing	Add up your production costs, add a margin (a percentage of profit you want to earn) and multiply that number by how much you can produce.
Retail margin	Most commonly used by retailers or wholesalers, this method is used by adding a margin to any inventory you’ve purchased.
Hourly rate	Have a service-based business? Consider charging clients by the hour.
Value-based pricing	Price products or services based on how much your ideal customer is willing to pay.
Price-skimming	Charge a higher initial price and then lower it over time.
Penetration and discount pricing	Sell your product or service at a lower price for a limited time to attract customers.

Your strategy should also take into account what your customers want to pay, the current market and what’s best for your company. Plus, you’ll want to consider ways to get the best margin, regardless of which strategy (or strategies) you use.

Learn more about pricing strategies for your business.

5. Choose a Business Structure

When you’re ready to make your business official, it's important to choose the right business structure. That’s because your business structure will affect how you’re taxed, how much personal liability you’ll have for business debt and more. Because it’s such a big decision, we recommend talking to a lawyer, accountant or professional advisor first.

Take a look at the four main types of business structures in Canada:

A sole proprietorship gives you 100% control of your business, plus the ability to operate under your name, business name or both. It’s also the easiest structure to set up.
A partnership lets you share responsibility (and liability) for your business with one or more partners.
As a corporation, your business will operate as its own separate legal entity.
A co-operative (also known as a co-op) structure is controlled by an association of members with the primary goal of meeting members’ common needs. As such, this structure is most commonly used by non-profits.

Check out choosing a business structure to learn more.

6. Explore Business Financing

There are multiple ways to get the funds you need to fuel your business’s growth. Similar to pricing strategies, you don’t have to choose just one option. Before raising money, however, figure out how much you need so that you have a clear goal in mind. Check out these ideas for financing your business.

SPECIAL OFFER

GrantMatch makes sourcing government funding easy by providing a curated list of government incentives based on your company profile. RBC business clients can access preferred pricing from GrantMatch¹.

Learn More

7. Register or Incorporate Your Business

When most of your planning is done, it’s time to move into the launch stage for your business. Registering or incorporating your business is a big step towards opening your doors.

Registration is a legal process that establishes your business—either a sole proprietorship or partnership—in every province or territory where you plan to operate. It allows you to file taxes as a business, which could help to lower your tax bill and provide other benefits.
Incorporation is a legal process that lets you establish your business as a separate legal entity with the federal government. Only corporations are required to incorporate, although other business structures may choose to do so as well.

The process of registering or incorporating can be a bit confusing. Luckily, there are ways to make the process easier. For example, Ownr can help with some of the tricky parts, like doing a name search, filing articles of incorporation and more.

SPECIAL OFFER

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Learn more about registering or incorporating your business.

8. Open a Business Account

Every business owner can benefit from having at least one dedicated business account. With a business account, you can have more control over your business expenses, simplify your taxes, establish your business to potential customers and more easily send and receive payments.

Opening a business account is quick and easy—in fact, you could have a business account number in 15 minutes.

Learn more about the benefits of opening a business account or explore our accounts now to see what’s right for you.

9. Set Up Your Payments and Other Systems

Once you have a business account set up, it’s time to think through how you’ll send and receive payments. After all, getting paid is crucial to staying in business!

First, consider how customers will pay you. If you make it easy for them, they’ll have a more positive experience with your company and you’ll get paid quicker—a win-win for everyone. If you plan to accept credit and debit cards, a service such as Payment Solutions by Moneris will allow your customers to pay by credit and debit card online, in-store, or on the go.

Next, consider how you’ll pay vendors, suppliers, employees and the government. Believe it or not, you can accomplish a lot of this right within online banking.

Whether you plan to do business online or at a physical location, having the right payment and cash management solutions can save you time and money and streamline daily tasks that help you get paid faster.

Depending on your business, you may need other software as well. For example, if you plan to sell products online, you will need an ecommerce platform. You might also benefit from payroll, time-tracking and HR services through a provider such as ADP.

Check out some of the money-saving offers and services from our partners—available to RBC business clients.

10. Protect Your Business

Your business represents your livelihood and a significant investment of time and money, so it makes sense to protect it. Before you start operating, be sure to identify and protect against the key risks your business could face. Here are four things you can do:

Protect your intellectual property (IP) with trademarks, copyrights and patents. IP includes things like your brand, logo, stories, content and ideas. Plus, make sure you’re not infringing on someone else’s IP.
Get business insurance to protect you, your business and employees.
Reduce the likelihood of fraud and theft by staying vigilant with hiring and training, recognizing e-commerce red flags, taking special precautions when dealing with chargebacks and monitoring all your payment methods—including traditional ones.
Create a cyber security plan to help prevent and manage a cyber security crisis.

Check out how to protect your business for more information on IP, business insurance, fraud and theft, and cyber security.

11. Hire Your First Employee(s)

Hiring your first employee can be exciting—and scary. After all, it can be hard to relinquish control over even a small part of your business!

Before you add someone to your team, there are a few things to consider. First, can you afford an employee? If so, what do you need help with—and how will you manage this person? Determining which skills you need in someone can help narrow your search. Plus, think about when you’ll need your employee to work—a traditional workday, mornings, weekends or seasonally?

Then think about how you’ll train your employees and what agreements you’ll need them to sign. Plus, be prepared for any questions your candidates may want to know—for example, will you be providing any benefits?

When searching for an employee, it can be frustrating to find qualified candidates. Putting a sign in your window or an ad online aren’t the only ways to find employees. There are services, like Magnet, that can help you recruit people with the skills and talents you’re looking for. Plus, don’t overlook the power of networking and word-of-mouth to help you find your first employee.

12. Promote Your Business

If you build it, will they come? While it would be wonderful to get customers by simply launching your online store or hanging a “Come In, We’re Open” sign on the door, chances are you’ll need to do some legwork to bring people in.

From social media marketing to speaking engagements, there are a number of advertising techniques you can use to promote your small business. Our Business Plan Builder can also help you sketch out your marketing plan and think through questions like:

How will you use your social media presence?
How will you use digital marketing to promote your business?
What results are you hoping to achieve from each channel?

Before investing heavily into any type of marketing or advertising tactics, first determine your marketing budget so that you can figure out how much you’re willing to spend and what your goals are.

If you’re an RBC business client, you also have access to special offers and services that can help you promote your business:

Reach potential customers in your neighbourhood with Nextdoor, a hyper-local network that connects local businesses with their neighbours. View Nextdoor Offer
Tell helloDarwin about your needs to get matched with creative and marketing company experts, free of charge.
View demographic data, growth patterns and customer buying trends to help you find an ideal location for your business with RBC InsightEdge™ for Small Business.

Looking for even more tips? Download our FREE Starting a Business Guide {pdf}. It’s full of helpful tips and resoures to set you and your new business up for success.

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For sole proprietorship registration "$100 back" offer is inclusive of any applicable taxes, and for incorporation, "$300 back" offer is inclusive of any applicable taxes ("Offer"). Offer available when you register or incorporate with Ownr and apply and get approved for a new RBC business deposit account associated with the business registered or incorporated with Ownr ("BDA") within 60 days ("Application Criteria"). Royal Bank of Canada (not Ownr or RBC Ventures Inc.) will in its discretion make approval decisions for all BDA applications. Once you complete the Application Criteria, you must log back into your Ownr account and click 'Refund Me'. You will receive the Offer as a credit in your BDA within 7-10 business days of clicking 'Refund Me'. To qualify for this Offer your BDA must remain open for a period of 1 year from the date it is opened but there is no minimum balance that must be maintained in your BDA. If you received this Offer then change or close your BDA within 1 year of the date it was opened, we reserve the right to debit from your BDA an amount equal to the value of this Offer (inclusive of applicable taxes), even if this places the BDA into overdraft. Offer may be revised or withdrawn at any time without notice.

Legal Disclaimer¹

This offer is only available to Royal Bank of Canada (RBC) business clients and Group Advantage sponsors and is non-transferable. RBC business clients will receive complimentary access to the GrantMatch Funding Assessment and Strategy Tool (FAST). RBC business clients who wish to access the FAST more than once must contact GrantMatch directly. Upon completing a FAST assessment, RBC business clients can get access to preferred pricing (which is a 20% discount from GrantMatch’s standard pricing) for: (1) GrantMatch grant writing services (where GrantMatch personnel will assist with the completion and submission of a grant application at an hourly rate of $175), or (2) GrantMatch Premium (where a GrantMatch Funding Specialist will assist in developing a long-term grant strategy, offer guidance on the grant application process, and, if a grant is awarded, will assist with reporting and compliance requirements), and/or (3) the GrantMatch Hub platform (at an annual subscription rate of $240 per year) (“Offer”). Preferred pricing for GrantMatch Premium consists of a retainer fee plus percentage-fee model, which is based on a percentage of approved funding: Up to $250,000 = 20% fee (of the first $250,000 of approved funding); Between $250,000 - $499,999 = 16% (of approved funding); Between $500,000 - $999,999 = 12% (of approved funding); More than $1M = 8% (of approved funding). The retainer fee is determined based on the annual revenue of the organization, either above or below $100M. Clients will be required to pay a retainer of $2,000 ($8,000 above $100M in annual revenue), consisting of $1,000 ($4,000 above $100M in annual revenue) for onboarding to the GrantMatch Platform, and $1,000 ($4,000 above $100M in annual revenue) for the license to the GrantMatch Platform (due annually), payable upon execution of a service agreement. Preferred pricing does not include HST. This Offer is valid from October 1, 2024, to October 31, 2025. GrantMatch Corp., not Royal Bank of Canada, is responsible for all terms and conditions applicable to your GrantMatch services, which are available at: https://ca.grantmatch.com/gm-terms-of-use-ca. Offers described above may not be combined or used in conjunction with any other offer(s). GrantMatch and RBC each reserve the right to discontinue or modify this Offer at any time.