Starting a small business in Canada isn’t all that difficult, but it can get tricky!
The economy isn’t the best, everything is super expensive, yet thousands of new small businesses are registered in Canada each year!
How do you do it? Can you do it? Is it for you?
If you want to get into business, to be your own boss, to create something that people will buy from you, be it a product or service, chances are you may have the entrepreneurial spirit to do so.
All you need is effort, time, and money!
Now, starting a small business in Canada with no money, well, that’s another thing on its own, but don’t get me wrong, quite doable if done right!
We’ve put this how-to guide on starting a small business with no money for you, to give you a tip or two on how to get started.
Let’s get into it!
Key Steps To Starting a Small Business
When starting any business, you have to do the preliminary steps before you actually get into it.
Assuming you’ve already decided to start, the goal here is to follow a checklist on starting a new business, so you don’t leave a thing untouched.
There are quite a few steps to consider, from the initial startup process, the financial planning, legal requirements, the market research and since you want to start a business with no money, your funding strategy becomes key!
Before you get any further, one of the key steps and recommendations is to develop a business plan.
A business plan is a good first step as it will help you really think about your business idea as you put it down on paper. This is where a lot of those idea flaws can be corrected. It doesn’t have to be something too formal, but take the time and do it right.
As you create a business plan, you can try out our 20 minute business plan canvas!
In summary, if you’re following a startup checklist, it will give you guidance on the right steps to take, but always, always, start with getting your business idea on paper.
Now, since you don’t have money to start up, or want to avoid investing any money into the business, funding is what we have to consider. Your funding strategy becomes one of the most important factors to getting your small business somewhere.
The Funding Strategy
No money to start a small business, no problem - but you have to plan it out!
Most people decide to get into a small business, generally spend their life savings and take out money from the bank, or credit card to make it happen. Some succeed, most don’t - but that borrowed money ends up as debt.
So what’s the plan on getting started with no money you ask?
Well, government funding!
The Canadian government invests billions of dollars into the Canadian economy to boost entrepreneurship - so you’re in luck!
The government hands out government grants (free money), government loans, creates tax breaks, offers tax credits and incentives..etc
The challenge, you have to pre-plan for the funding and find it!
Types of government funding
When it comes to Canadian government funding, there are 3 key categories of funding to consider:
- Government grants
- Government loans
- and tax breaks/credits
In your situation, you want to start a business with no money, so the tax breaks and tax credits won’t be something you have to consider at this stage, but do keep it in mind, as it can give you a boost of free money around tax time - especially on expenses you’ve already taken care of!
Now, government grants are the key here.
Government Grants
Government grants can come in many forms, but most of the time, they are free money options that your busienss can take on, without having to repay back.
This free money can be the solution to your problems when starting with no money!
Many small business owners take on a startup grant, a wage grant, or use the free money towards the initial expenses. This sets you up without having to spend your own money.
The challenge, grants are super competitive, and they are often harder to find.
Funding Databases, like the one provided by Canada Startups, can assist you with the search for grants, as it provides you access to over 1,500 active grants and funding options for startups!
A key tip, when looking for government grants, be sure to look at programs that are a fit for your industry, in your province/region and cover the costs you want to have covered - as grants are not for everything!
Government Loans
If you want a bit of an easier approach, but don’t want to borrow money from a bank loan, or via your credit card, government loans are often the way to go.
Many entrepreneurs take on government loans as a primary source of small business funding and supplement it with additional grants.
Government loans, or those that are government-backed are often easier to obtain in comparison to a traditional bank loan - mainly because they have better terms and conditions.
Most government agencies care about is your success, as your success helps create a full funding cycle.
Can it really be done?
The real challenge of starting a small business with no money is not whether it can be done, or if there are ways - the challenge is that it’s harder.
When something is hard, most people give up.
When starting a small business in Canada, everything has a cost.
You have to register the business, you likely will have a website, you have to register your domain name, buy some business cards, have an internet connection, tools/inventory, and supplies..etc
You can absolutely cover it with government funding, especially via government grants, but your funding strategy has to be done along with your business plan, way before you get the idea off the ground.
At Canada Startups, we work with small business owners every day, many of whom are challenged with the startup costs, and it all comes down to obtaining funding as the first step.
Ready to give it a try?
If you’re up for the challenge, you can always follow our 30 step process to starting a small business , getting funded, and launching in just 30 days.
If you’re not sure of the business idea just yet, consider some of these 13 profitable home-based business ideas for Canadians - many that you can do with no money, to very little money - or by using government funding.