Did you know that the average business owner in Canada earns just over $75,000 a year? While that sounds like a great source of income, is that enough to sustain someone and offset the costs of starting a business? After all, how much do you need to start a business in Canada?
While becoming a business owner can be an exciting venture, it’s important to know what costs you can expect. In this article, we’ll break down the average costs associated with starting a business in Canada.
How to Calculate How Much You Need to Start a Business
Creating a business plan is a helpful way to calculate the costs of starting your business. This document outlines your business goals, strategies, and milestones. It also includes a budget that covers the costs of launching your business.
The budget should include start-up costs, such as market research, registration fees, and legal fees. It should also cover operating costs, such as rent, advertising, and salaries.
Ultimately, by creating a business plan, you can get a clear picture of all of the business costs you can expect to have to pay for to successfully launch your new brand. This will help you ensure that you have the financial resources in place to launch your business successfully.
Startup Costs to Consider When Starting a Business
Not sure what to include in your business plan that will count as startup costs? That’s okay. We’re here to help.
Whether you’ve created a business plan before or if it’s your first time outlining your business goals and objectives, it’s important to include these startup fees and costs so that you can get a good idea of how much you need to start a business.
Business Setup & Registration Fees
The cost of registering a business in Canada can vary depending on the province or territory in which the business is located. For example, in Ontario, the cost is $300 if you’re incorporating a business, while in Alberta it is $275.
Ultimately, the total cost of registering your business in your province depends on, well, which province you live in and how you plan to register your business.
This is why it’s important to do your research and ensure that you are aware of all the costs associated with starting a business in Canada before you begin the registration process.
Equipment
Equipment costs can also add up quickly, so it’s important to have a clear understanding of what you need and how much you can expect to spend.
One of the first things you’ll need to do is figure out what type of equipment your business will need. This will vary depending on the industry, but some common examples include computers, printers, phones, furniture, and vehicles.
Once you have a list of the essential items you’ll need, you can start researching prices. It’s always a good idea to shop around and compare costs before making any major purchases.
Furniture & Office Supplies
The average cost of furniture and office supplies can vary widely depending on the type of business you have and the quality of the products you purchase.
In general, it is a good idea to set aside a few thousand dollars for furniture and office supplies when starting a new business.
This will give you enough money to purchase the essentials, such as desks, chairs, and computers, and will also leave room in your budget for any unexpected costs.
Merchandise
How much merchandise you’ll need to spend will depend on the type of product you’re selling, as well as how many SKUs (stock-keeping units) you plan to carry.
For example, if you’re selling clothes, you’ll need to factor in the cost of fabric, clothing racks, hangers, etc. If you’re selling electronics, you’ll need to factor in the cost of displays, cords, cables, etc.
In general, it’s a good idea to budget for at least $5,000 worth of merchandise when starting your business.
Marketing
You can’t launch a business without any clients. Well, you can, but it won’t be very profitable. So, keep in mind that you’ll need to budget for the cost of marketing your new business.
As a general rule of thumb, marketing costs should account for around 3-5% of your total budget. This means that if you have a budget of $100,000 for your new business, you should allocate $3,000-$5,000 for marketing expenses.
Of course, you may need to adjust this amount based on your specific circumstances. But this guideline can give you a good starting point for developing your marketing budget.
How Much Do You Need to Start a Business?
Based on the factors mentioned above, how much do you need to start a business in Canada?
While it will vary depending on the type of business you’re starting and what industry it’s in, you can expect to spend anywhere from about $5,000 to $10,000 just to get your business registered and up and running.
Are Fast Loans a Good Idea for Business Owners?
With the cost of starting a business in mind, you might be wondering if a loan is a good idea or not. After all, financing a business is no easy feat on savings alone. So, yes, in some cases, fast loans are a great way to access business funding.
Fast loans are a specialized type of financing that allows business owners to access funding quickly. These loans are typically dedicated to specific purposes, such as purchasing inventory or equipment and have shorter terms than traditional business loans.
They’re also a great option for those building a business who might not have great credit and find themselves locked out of the traditional lending market.
How to Access Quick Cash for Business Funding
So, how much do you need to start a business? If you have that number in mind and find that you need access to quick cash for business funding to help ensure you can reach your goals then we’re here for you.
At Kingcash, we offer microloans between $500 to $750 to Canadians looking for access to funding. Ready to claim your cash? Click here to apply for your loan.
