This post was drafted for Golden Thread Consulting‘s small business tool kit. Visit www.goldenthreadconsulting.com to sign up for the full kit which includes small business tips for IT, Finance and more.
At Sharp Six our legal eagle and strategist Rachel Forbes is ready to assist you with your legal needs. To get started, here are five tips for your small business whether you are starting up or established.
1. License and registration, please? Registering your business and your business name are among the first official things you need to do to launch your business. Seek financial and/or legal advice on the pros and cons of becoming a sole proprietor, partnership, corporation or other legal entity (such as cooperative, non profit, community contribution corporation) as all have types of tax, financial and legal obligations. Think of your registration like your car; you still need a licence to operate it. Once you’ve nailed down a business location and you know it’s appropriately zoned for your type of business, contact your local government to obtain an annual business licence.
2. Manage risk. There will always be some risk involved in what you’re doing. No risk, no reward – right? A lot of risks can be anticipated and mitigated with a little advance planning. Make sure you are properly licensed for whatever activity you’re undertaking (liquor license, Health Canada, etc.) and that you’re registered to collect all applicable taxes (GST, PST, liquor, accommodation) so that you don’t end up in a risky situation with the government! Also make sure you’ve got relevant types of insurance to cover you in relation to products, premises, and services.
3. Social license. Social license is not applied for, it’s earned, and in many circumstances it can be critical to your business’s success and longevity. It refers to the ‘approval’ or cooperation of a community (geographically or a community of interest) in relation to your business offerings or proposals. What’s required to develop or gain social license will vary widely depending on what you’re doing but generally it requires sustained investment in relationships and trust building and in responsible business behaviour. This could include dialogue with local community groups, First Nations or interest groups, examining and improving your supply chain, ensuring your brand is not infringing on others intellectual or cultural property and many other considerations. It’s something that can be gained or lost easily and thus it should never be taken for granted.
4. Agree to agree… in writing. It can be tempting when starting up or operating a lean business to exchange favours with friends and do deals via handshakes. We advise creating written contracts for all your relationships – employees, partners, suppliers, suppliers, clients. These don’t need to be overly complicated, just a simple written agreement so that you have something to refer to if one party has a different interpretation than another. There are some good precedents and templates you can find online but to be sure they fit your situation and are appropriate for your jurisdiction (i.e. different laws that you have to comply with), have a lawyer do a quick check of them before putting them to use.
5. Plan ahead. There are things you know you’ll need to do during any year of business. These could include year end reports, employment remittances, tax filings, GST remittance, updating information with the registry (partners, addresses, office of record), dividend calculation, AGM, stakeholder consultation, inventory, proposal or grant deadlines, seasonal hiring, staff evaluation, and many more activities! List out what you know will need to get done and schedule it in your calendar in advance. Plan with your partners or colleagues to get on these items in advance so that they don’t take you surprise at the last minute.
For any questions and to learn more, send a note to Rachel at firstname.lastname@example.org.