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Starting a Business
Important Considerations for Success
Nathan Mean, Director, Business Resources
March 13, 2023

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97,000 MEMBERS
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Entrepreneurship and
democracy are inextricably
linked; you cannot have one
without the other. Starting
a business is a vote of hope,
in one’s family, one’s
community, one’s country.

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Starting A Business
Practical advice
From thousands of Canadian business owners for over 50 years
Shared with CFIB Business Advisors as important to success

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Starting A Business
First an Important Note
• Few businesses succeed without a good lawyer and good accountant (CPA)
• Business principles discussed are not complicated, but details can be
• Don’t waste your time trying to figure out the law
• Don’t do your own taxes
• Your expertise is in the practicalities of business

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Today we will look at three
foundational themes and why
they are so important to the
success of the entrepreneur.

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Starting A Business
Three Themes Discussed Today
1. Buying an existing business
2. Starting a completely new business
3. Inheriting or hiring new employees

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As a new entrepreneur, never buy a business without first
considering:
• Evaluation
• Liability and Taxes
• Partners
• Assumed Contracts
• Current Employees
• Unions
BUYING A
BUSINESS

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Buying a Business - Evaluation
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Never buy an existing business without having a competent
evaluator complete an appraisal of all assets, debts,
liabilities, cash flow and physical structure
See your lawyer or accountant for referrals
Liabilities include intangibles like complaints to Human Rights
Tribunals, Worker’s Compensation (claims/rate changes),
Labour Boards/Tribunals

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Buying a Business – Liability and Taxes
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Be aware of any past taxes still owing,
and taxes owing in the future

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Buying a Business – Partners
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Will you have one or more partners?
Insist on a corporate shareholder agreement that determines
• Dispute resolution
• Future sale of shares in the business
• Succession in case of death or resignation – even if your partners are
family members

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Buying a Business – Assumed Contracts
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Will you assume service contracts as part of the business purchase?
• Franchise agreements
• Membership contracts
• Merchant services
• Garbage and snow removal
• Telephone, etc.
Not comfortable? Negotiate before you sign

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Buying a Business – Current Employees
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Does the business have current employees?
They may have ‘continuity of employment’

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Buying a Business – Unions
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Is the business unionized or in the process of joining a union?
• Likely inherit the union with the business
• Consult a labour lawyer specializing in management rights before signing
any business purchase agreement
• Unionized businesses are subject to different laws than businesses without
unions

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Choose Business Structure that suits you (common types)
• Sole Proprietorship – easiest to set up
• Incorporation – more paperwork, but may have tax and
liability advantages
• Partnership – used mostly by professionals like lawyers and
accountants
STARTING A NEW
BUSINESS

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Starting a New Business – Banking & Financing
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Required
• Written business plan
• Dedicated bank account
• Credit card/debit card/smart phone payment acceptance
• Beware: Some companies more honorable than others
• Personal guarantees

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Starting a New Business – Insurance
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Types of Insurance:
• Building/vehicle
• Liability
• Errors and omissions
• Business continuity
• Other

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Starting a New Business – Professional Services
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Legal advice
• Business Structure
• Regulatory filing/demand
• Contracts
• Demand letter/lawsuit/court or tribunal preparation
Accounting advice
• Tax Structure
• Tax Filing
• Payroll

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Starting a New Business – Licensing/Permits
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Permissions required to operate your business
• Building permit
• Health
• Liquor
• Music
• Certification
• Provincial/Federal regulatory requirements

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Starting a New Business – Electronics/Security
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You may need to sign contracts
• Telephone
• Computers/Software
• Website
• Security (both physical and cyber)

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Starting a New Business – Time Management
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To increase your chances of success
Communications plan
• Calendaring system to meet deadlines and avoid penalties
• Tax/Regulatory/Banking/Contractual/Legal
• Messaging/voice mail/mail response plan for quick follow-up

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As a new entrepreneur - whether inheriting employees
along with the company you are buying, or needing to hire
new employees in the business you are starting - once you
are responsible for other people under a contract of
employment, your life will never be the same – for better or
for worse
EMPLOYEES

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Employees
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Buying a business with current employees?
• Discuss current employment contracts with your lawyer before
signing a Business Purchase Agreement
Hiring new employees?
 Consider the following before you do

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Employees – Prior to Hiring
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Job Description
• Should be in writing, ready before the interview
Interview
• Know the questions you may NOT ask
Employment Contract
• Should be in writing
Payroll system
• Needs to be in place
Workplace policies
• Know what must be in writing and implemented in your business

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Employees – After Hiring
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Understanding the basics
• Employment Insurance and Canada Pension Plan
• Employment Standards Act/Canadian Labour Code
• Human Rights
• Workplace Safety and Insurance Board
• Occupational Health and Safety
• Training (Mandatory)

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Employees – Ending Employment
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Resignation
• Get it in writing
Termination
• Give it in writing
• Termination for cause/willful misconduct vs. not for cause
• Notice and pay in lieu of notice
• Employment Standards Act requirements
• Common law requirements
• Record of Employment and Service Canada
• Legal advice when appropriate
Retirement
• Succession planning
• Severance
• Canada Pension Plan requirements
• Record of Employment and Service Canada
• Accounting advice when appropriate

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Buying a business
Do your due diligence before signing
Talk to your lawyer & accountant
before signing purchase agreement
Prepare to negotiate what doesn’t
make financial sense; accept nothing
until you know the value and costs
involved
Insist on partnership agreement
vetted by your lawyer if you have
partners in on the deal
Best get it right from the beginning
Saves you money!
Starting from Scratch
Have a written business plan that
outlines how you will make money
Have financing in place before you start
your business
Insist on partnership agreement vetted
by your lawyer if you will have partners
in the business
Talk with your lawyer and accountant
before you start to ensure proper
business and tax structure
Don’t waste time trying to figure out
the law and don’t do your own taxes
Much time and money can be lost trying
to clean up a mess that need
not have been
Employees
Employees can either help you grow or
lead to loss
Always have a written employment
contract vetted by your lawyer
Never fire for cause without input from
your lawyer
Only hire employees committed to
helping you grow your bottom line
The best employees are people who
will do just that

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Contact Business Resources
1-833-568-2342
to sign up and access a copy of the
Practical List for New
Entrepreneurs:
Steps to Take When Opening a
Business
Interested in an Introductory
CFIB Membership?

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