Do you want to start a business in Manitoba? This beautiful Canadian province is full of potential, and the local and federal governments have various resources in place to encourage and support Manitoba businesses.
Keep reading to learn the main steps to starting a business in Manitoba, from choosing a name to registering for provincial and federal sales tax.
Note: These steps do not necessarily have to be completed in the order presented. Please read through the list and adjust the process to your unique business, financial, local and personal needs.
1. Research your business idea
Every successful business begins with an excellent idea that is backed by thorough market research. By taking time to find out whether there is a demand for your product or service, you will save both effort and money in the long run. Check whether your business idea really is as unique as you thought by exploring existing Manitoba businesses. Then find out whether your idea is realistic. Will it actually earn money? Starting with a strong idea is the best way to build a successful business with the least amount of effort.
Here are a few tips to get you going in the right direction before you commit to starting a business in Manitoba:
- Confirm that there is a market for your product or service. Sites like WTC Winnipeg offer free secondary market research, so you can get an idea of how well your business idea could fit in the Manitoba market.
- Take a look at the initiatives being put forward by the Manitoba government to advance the provincial economy. These announcements can give you a good idea of the types of businesses the province currently values and will be ready to support. For example, business startups can currently receive extra support from Futurpreneur thanks to a four-year commitment by the provincial government to provide funding to young entrepreneurs.
- Research your competitors so that you will be able to explain why you think your idea will succeed when it comes time to request funding. The Business Development Bank of Canada (BDC) offers a guide to help businesses define their unique selling point (USP).
2. Choose a business structure
Before you register or incorporate your business in Manitoba, learn about the implications of each legal business structure. There are three main types of business structures to choose from when starting a business in Manitoba.
Sole proprietorship
A sole proprietorship is a business that is owned by a single individual. It represents the most straightforward way to initiate a business.
In this kind of business, you retain all the profits, but you're also obliged to deduct any losses and expenses from your personal income, and creditors can legally seize both your personal assets and business assets if your business doesn't succeed. You will also have to pay taxes at a personal tax rate, which is only practical for smaller ventures. Manitoba corporate income taxes are collected by the Canada Revenue Agency on behalf of the province.
Partnership
In a partnership, two or more individuals jointly own a business. Collaborating in this way can simplify certain aspects of launching a business, such as dividing the initial expenses and risk.
It's important to note that all partners share responsibility for the business's debts and losses. Additionally, managing a joint venture can become more intricate when it comes to making decisions. Partnerships must be registered with the Manitoba Companies Office.
Corporation
If you incorporate a business in Manitoba, you can keep your business activities completely separate from your personal finances.
There are many benefits to incorporating, including the ability to transfer ownership, the security of limited liability, and easier access to loans and grants. However, incorporating your business in Manitoba can be expensive, and filing your taxes will be more complicated. You may need to hire a business accountant.
It's usually a good idea to talk to a lawyer or other advisor (such as a business accountant) before deciding to incorporate your business.
3. Choose a business location and business name
Choosing a location for your business is important, as you will need to put a permanent business address on your tax returns and other paperwork, such as applications for loans. Remember to verify zoning laws and legal regulations before signing a lease or committing to a location.
You will also need to choose a business name. This may take more effort than you would expect: your business name must be unique and hasn’t been used either by another Manitoba business or another brand online. You’ll need to check websites and social media accounts, as well as official Manitoba business registries while doing your research.
To register a business name in Manitoba, it is often necessary to reserve that name first. The Government of Manitoba enables online reservation and registration of business names with varying fees, according to your business structure.
If you intend to operate federally, or to be certain that your chosen name is not already protected even if it is not in use, visit the NUANS database of incorporated businesses.
4. Create a business plan
When starting a business in Manitoba, you’ll need to create a business plan. The BDC provides a business plan template and complete list of what your business plan should include.
A good business plan describes your business goals and potential customers, and includes all relevant information you have accumulated up to this point in the start-up process. It should outline your financial goals and explain how you intend to position yourself relative to the competition.
As you make your plan, remember that some types of businesses require specific licenses and permits. Use BizPal to see which permits or licenses you will need for your Manitoba business, according to your exact location within the province and the type of business you will be running. Businesses in Winnipeg can consult the City of Winnipeg business licenses page for more information.
Specific rules and regulations may also apply. Be sure you are aware of the laws and regulations related to employment in Manitoba so that your business plan is realistic and legal.
Remember, while it is important to make a business plan to acquire funding and potentially to attract investment or partners, be prepared to make changes as you move forward. The most successful entrepreneurs are always adjusting and reevaluating to keep their business relevant.
If you find business planning difficult, or you hit a roadblock at any point during the process, remember you can always contact a lawyer or accountant for help.
5. Register your business
If you want to run your business under your own name, you do not need to register your business. If you want to use a separate business name, you need to register with the Manitoba Companies Office.
If you are running a corporation or partnership, you will also need to register. After having your business name request approved, register using that name. Once your business is registered, the Companies Office will issue you a 9-digit Business Number (BN). The Manitoba government provides a complete list of relevant forms and fees for registering a business.
6. Obtain Financing
While you do need to use your own money to start a business in Manitoba, there are also many ways to obtain additional funding and financial support once you have a viable plan and have begun to offer a product or service. The Government of Manitoba offers various programs and incentives to businesses within the province according to their field of activity, structure and size.
To make the most of the tax credits and deductions your business is eligible for, you can always ask a small business tax accountant for help with your annual tax returns.
7. Open a business bank account
To receive funding and to stay organized, having a business bank account is essential. Visit your local financial institution and bring your business number (BN), a copy of your business registration documentation, and any other relevant information (partnership agreement, etc.).
And remember, a business accountant can help you run your business efficiently with helpful suggestions related to day-to-day bookkeeping and accounting decisions, such as whether to rely on activity based costing or absorption costing.
8. Establish an online presence
An online presence is an important part of running a successful business today. To get your business online, begin by registering a domain name (URL) and getting a custom email address. A web marketing professional can help you create an efficient and cost-effective online presence that will help you boost sales and get found by your target customers.
When it comes to going digital, you can get help in many ways, via resources such as the Digital Manitoba Initiative which was developed by the Manitoba Chambers of Commerce to help Manitoba business stay competitive by incorporating digital solutions to running a business.
9. Get informed and register to pay taxes
Businesses in Manitoba have to pay taxes according to 8 Tax Acts administered by the province.
To find out whether you are considered a vendor and are therefore liable to collect and remit the RST (Retail Sales Tax) in Manitoba, refer to this Government of Manitoba taxation bulletin. The RST is taxed at a rate of 7%. Other types of Manitoba provincial sales tax may also apply to your business, depending on your sector of activity.
Manitobans must also pay the federal GST at a rate of 5%. Some exceptions apply when it comes to businesses paying RST and GST.
Manitoba businesses can file, pay and view their business tax accounts on TAXaccess. The GST is administered by the Canada Revenue Agency.
Get help from T2inc when starting a business in Manitoba!
Starting a business in Manitoba involves many steps. One of the best ways to keep things simple is by committing to accurate bookkeeping, and efficient, timely financial reporting. Corporate taxation professionals can help you achieve your business goals by preparing top-quality business tax returns for you.
Contact the business tax professionals at T2inc.ca today to learn more!
Frédéric Roy-Gobeil
CPA, M. TAX
As President of T2inc.ca and an entrepreneur at heart, I have founded many start-ups such as delve Labs and T2inc.ca. A former tax specialist at Ernst & Young, I am also a member of the Ordre des comptables professionnels agréés CPA and have a master's degree in taxation from the Université de Sherbrooke. With a passion for the world of entrepreneurship and the growth mindset, I have authored numerous articles and videos on the industry and the business world, as well as on accounting, taxation, financial statements and financial independence.
