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Starting out
What to do, roughly in what order, and which of it can wait. Written for someone starting something in Cobourg, Port Hope, Brighton, Campbellford or anywhere else in the county, and largely applicable across Ontario. There is also a good deal of free help locally that people do not know about.
There is a difference between a business and an activity you enjoy that occasionally produces money. It matters, because a business can deduct its costs against its income, and can often use early losses against your other income, while a hobby cannot.
What separates them is whether you are carrying on the activity in a commercial way with a view to profit. Not whether you have made a profit yet, which few businesses do in year one, but whether the operation is set up and run as one. Pricing, records, marketing, a plan for making money.
The practical version: if you intend this to be a business, run it like one from the beginning. The evidence is easy to create as you go and difficult to reconstruct afterwards.
Sole proprietorship, partnership or corporation. Most businesses start as a proprietorship because it is the default and the administration is light, and incorporate later when there is profit being left in the business. Incorporating on day one is frequently premature. The reasoning is set out on owner-managed businesses.
If you are going into business with somebody else, write down the arrangement now, while everyone is getting along.
If you are trading under anything other than your own legal name, register it through the Ontario Business Registry. It is a name registration rather than permission to operate, and it lapses after five years.
Check the name is not already taken and is not going to cause you trouble before you print anything.
The business number is your identifier with the CRA. Attached to it are program accounts, and you only open the ones you need:
Opening accounts you do not need creates filing obligations you then have to keep meeting. Open them when the need arrives.
Registration becomes mandatory once you pass the small supplier threshold of $30,000 in taxable revenue, measured on a rolling basis rather than by calendar year. Below that it is your choice.
Registering voluntarily can make sense if your customers are businesses, who will not mind being charged, and you have real input tax credits to recover on start up purchases. It rarely makes sense if you sell to the public and have few costs, because you are adding tax to your prices for nothing.
Open a business bank account before the first dollar moves. This is the single highest value piece of administration in the whole list, and the one most often skipped.
Everything downstream, the bookkeeping, the year end, the HST return, an eventual CRA query, becomes straightforward when there is a clean separation and painful when there is not. Reconstructing a mixed personal and business account after the fact costs more in fees than the account ever costs in charges.
Keep the receipts, including for things bought before you opened. Costs incurred once the business has actually begun are generally deductible even though revenue has not started, and start up spending is often the largest expense of year one.
Keep capital purchases separate from running costs, because they are treated differently. And keep the paperwork for anything that will still matter in ten years. See bookkeeping.
Savings, a loan, a line of credit, family money, or a grant. Most start ups use more than one, and how the money goes in has consequences that are easier to set up than to reconstruct.
Interest on money borrowed for business purposes is generally deductible, and interest on money borrowed for personal purposes is not, so the paperwork on what the loan was for matters. Money you put in yourself is not income to the business, and if you are incorporated it becomes a shareholder loan you can draw back out later without tax. That is worth recording properly at the time.
On where to look: Nventure lends to local businesses where conventional lending does not fit, BECN runs programmes for eligible start ups including grant funding, and the bank is one option rather than the only one.
Separate from the name registration. Depending on what you do this can include municipal business licensing, a building or sign permit, health inspection, trade certification, or a licence from a provincial regulator. Your municipality is the place to start.
Get commercial insurance before you begin trading, not after. Personal policies generally do not cover business activity, including a home policy covering business equipment or clients coming to your house.
If you take on staff you will need a payroll account, source deductions, likely WSIB coverage depending on your industry, and possibly the Employer Health Tax. Some sectors, construction in particular, have mandatory coverage reaching people who assume it does not apply to them. See payroll.
Also settle whether the people helping you are employees or contractors, properly, at the start. That question is expensive to get wrong and it is decided by how the relationship works rather than by what the invoice says.
A proprietor reports business income on the personal return, with a June filing deadline for the self-employed, though any tax owing is still due 30 April. A corporation has its own year end, its own filing deadline and its own payment deadline, none of which line up with the personal ones. HST filing frequency depends on your revenue.
Instalments come as a surprise in year two, because year one had none.
The one that catches new proprietors hardest is CPP. Working for yourself, you pay both the employee and the employer halves on your net business income. On a reasonable first year that is a four figure amount nobody budgeted for, and it lands with the tax bill rather than separately. Worth knowing in month two rather than month fourteen.
Which is the argument for setting money aside as you go. A fixed percentage of every deposit moved to a separate account is unsophisticated and it works.
There is a good deal of free and low cost support in the county, and it is under used.
| Organization | What they do |
|---|---|
| Business & Entrepreneurship Centre Northumberland Cobourg |
The county's Small Business Enterprise Centre. Free consultations, business plan help, seminars and programs for new and growing businesses, including grant programs for eligible start ups. The first call for most people starting something |
| Nventure formerly the Community Futures Development Corporation |
Financing and strategy for local businesses, including loans for small and medium sized enterprises where conventional lending does not fit. Worth talking to before assuming the bank is the only option |
| Venture13 Innovation Centre Cobourg |
Innovation and entrepreneurship hub, with workspace, programming and a group of partner organizations under one roof |
| Your local Chamber of Commerce several across the county |
Membership organizations offering advocacy, networking, training and group benefit plans. The county has several, including the Northumberland Central Chamber and chambers serving Trent Hills and other communities. Group insurance and benefits alone can justify the membership for a small employer |
| Canada.ca business start pages | The federal overview, useful for business number registration, permits and the national programs |
All of them are worth a call. BECN is a good first stop if you are still working out what you are building, and they will spend real time with you at no charge.
Not to start one. A sole proprietorship with straightforward income can be handled by an organized owner for a while. It becomes worth having help around the points where a decision has lasting consequences: whether to incorporate, whether to register for HST, taking on a first employee, or the first year that produces real profit.
Usually not. The tax benefit of incorporating is deferral on profit left inside the company, so it does very little for a business whose owner needs all the profit to live on. Non-tax reasons can decide it, such as a customer or lender requiring it. For most new businesses the honest answer is not yet.
Generally yes, once the business has actually begun, even if revenue has not started. Start up spending is often the biggest expense of a first year. Keep the receipts, and keep capital purchases separate from running costs since they are treated differently.
It depends on your income and your other sources, so there is no single percentage. What works in practice is moving a fixed share of every deposit into a separate account from the beginning. Remember that a self-employed person also pays both halves of CPP, which is the part most commonly left out of the estimate.
Once your taxable revenue passes $30,000, measured on a rolling basis rather than by calendar year. Below that it is optional, and voluntary registration can be worth it where your customers are businesses and you have real input tax credits to recover.
Open a separate bank account, and speak to BECN. Both are free, both make everything after them easier, and neither commits you to anything.
What a first conversation is for. Mostly telling you what you do not need yet. Twenty minutes early on saves a surprising amount, and there is no charge for it.
This page is general information as at August 2026 and not advice for your situation. Thresholds and programme details change, and requirements vary by municipality and by industry. Check your own circumstances.
Twenty minutes, no charge, and no obligation. Worth having before you register anything.
Call (905) 207-9639