How to start an online business in Canada!

Dec 05 2019


Digital Marketing


Last Updated: August 18, 2021

Author Neeraj

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Why even start an Online Business?

Since, you are here interested in this article, the chances are that you already know the answer to this question. But let’s just recall the primary benefits as we get into the main topic.

Internet based businesses are lucrative as they come with numerous advantages. Global access, 24/7 availability, flexibility in operations, reduced input costs, automated processes, ability to manage the business from anywhere and rapid scalability, are just some of these benefits.

The rapid advancements in technology has made it a lot easier to operate online. The scope of growth and opportunities are tremendous. You need not necessarily need to be a developer or know coding. You can even just take your offline business online to expand its scope and reach. It is happening big time while the global pandemic continues to exist. The possibilities are numerous, it’s all about exploring and diving into the action.

Why start an Online business in Canada?

#1 Forrester expects online retail in Canada to grow at a CAGR of 10.6% from 2018 to 2023 whilst as per Statista in 2018, 26.8 million people in Canada bought goods and services online . This figure is expected to increase to 28.3 million people in 2022 which is a positive signal for someone looking to start an online business in Canada.

#2 One in 10 dollars spent in Canada retail will flow through digital channels.
#3 Most Canadians prefer to buy from Canadian companies when shopping online.
#4 Canadians are spending more time online.
#5 The average internet speed in Canada is 42.4 MBPS.

How do you start an online business in Canada?

Alright, let’s get into it.

Step 1.

The first step is to choose a niche and a business name. Along with this you will also need to know your business and the target audience.

Based on this you can classify your business into either of these 3 possible categories.

a. Business to Consumer (B2C) – It refers to the online sale of goods, services, information directly sold to the consumers. It can be a primary business or supplementing an existing business.

b. Business to Business (B2B) – It refers to the online exchange of services, products or information between businesses. This is also a rapidly growing segment and transactional figures will often be, higher.

c. Business to Government (B2G) – It refers to exchange of services, products or information digitally between businesses and governments.

A good way to get started is to look at Canadian corporate names (except Quebec) and trademarks database (Nuans). Check out name availability from here. Alternatively, you can also use tools like ownr to register your business online or take a look at our list of tools to register your business online.

Step 2.

Identify the problem you are going to solve in Canada, the basics of entrepreneurship. It could be anything from social, technological, political or socio-economical problem. Note that a successful business fills the gap which aren’t being filled. You solve a problem and grow a business along with it.

“A simple thumb rule is that the bigger a problem you solve, the more money you make, especially when we are talking online businesses”

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Step 3.

Market Research. Yes, just like any other businesses out there, online businesses also need market research. Research helps you dive deeper into your niche, understand your consumers, and thus helps set you apart from the rest.

Few questions you may want to address beforehand:

Who are your customers?

Where do they buy?

What will make them buy from you?

The simplest way to get started with this is to look at your customer database, survey or satisfaction surveys you did in past.

If you are a new business or just getting started online, consider developing Digital buyer personas and start developing content for each of your target buyer persona from there. This will ensure that you start attracting relevant audience for your business.

If you are starting a new industry or a novel product for which there is no demand yet, research or existing companies, competitors and players in a market segment may not apply.

Step 4.

Set up a business bank account. Consider using a free e business account like BMO ebusiness for getting started and move on to an enhanced business banking plan later when you grow. US dollar vs Canadian dollars in day to day business transactions is another choice you will have to bank and of course, the bank account could vary accordingly.

Step 5.

Funds. An online business doesn’t really need a lot to get started. So funding isn’t absolutely necessary, but having some money or capital is always helpful in the long run. It gives you wings to get soaring quicker. Google Ventures is a great place for unique and out of the box start-ups to get funding from.

For Canada, there are a number of financing options available. You can check:

You can also explore crowdfunding options if you have a really innovative product. Check out this updated directory of Canadian platforms available for crowdfunding. Do note that equity investments in Canada are governed by the securities laws, which differ from province to province. So, make sure to research about it more if you are going ahead with that option.

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Step 6.

Map out your Revenue streams. This again takes us back to the steps 1, 2 & 3. That is where you figure out your sources of income. But if you haven’t done it yet, do it now.

Will you be selling products, providing services, promote other’s products, drop shipping, doing affiliate marketing? Chalk out the steps of the process of everything you will do to start generating income. Trello is a great and free tool to keep your thoughts and documents organized.

Step 7.

Accounting. Next, we will be talking about costs. With funds, revenue, costs coming together. It’s essential to maintain accounts from the very beginning. Many miss out on this initially, seems the least important thing. But a habit of accounting keeps the figures streamlined and save a lot of trouble later. Consider using Bookkeeping software such as QuickBooks to start recording your transactions from day one.

Step 8.

Setting up a Website. It is the first major foray into being an actual online business and we can help you launch, grow and scale with our website and inbound marketing plans. Let’s break down these steps for you:

a. Domain Name– Choose a good domain name . The domain name should portray your personality as well as make the website easy to remember. It’s not always the best idea to use your registered business name as your domain. A Domain name should be short and catchy and most importantly, available! You can check the list of available domain names on websites like namecheap or bluehost.

Using the special .ca extension denotes that you are a Canada focussed business.

b. Hosting – So you chose a domain from a domain registrar now you need to figure out where to host it. In most of the cases the domain registrar also provides hosting services. We do provide that for free in our StepToPro and StepToGrowth plans.

A point to note is that Canadian constitution protects you if your hosting server is in Canada, either physically or on the ‘cloud’. It helps with data compliance.

c. CMS – A content management system is required to create, manage, edit or delete your content online. You should plan a robust CMS platform for your business requirements. You have the option to choose between open source CMS such as WordPress, Drupal and proprietary CMS such as Shopify, HubSpot, Wix, SiteCore or Sitefinity. Both has pros and cons; we recommend getting started with a simple CMS like WordPress that will save you platform cost and scale later as desired. Check out our list of CMS tools here.

d. The Shopping Cart & Payment Gateway – If you are planning to be an online retailer or just planning to sell a few informational products, choose a suitable shopping cart provider as per your need. You have options of using e-commerce platforms like Woo Commerce and Shopify.

The Payment Gateway is also a critical step. It’s easy and safe to accept payments online and even cryptocurrency these days. Check out the list of online payment tools:

e. Design and Develop your website. Get a brand-new logo design UI/UX and layouts, You can either do it yourself using simple drag and drop option like Elegant themes or outsourcing is going to be your best bet as your focus should be getting income in business when you are just getting started.

Step 9.

Market the website. Now that your website is up and running, let’s get into some traffic which will eventually give you sales. Here are a few things you can look into:

a. Advertise– Organic traffic takes some time to grow. To get the initial revenue flow, starting with digital advertising is a good way to start. There are a number of ways that you can advertise even on a low budget. Listing your business, using free initial ad credits or even just simple paid online advertising will help.

Learn More about: Use Google my business in Canada for free.

b. Organic Traffic– Post regular content on the website, it helps with the search rankings and keeps the site updated. Make sure you have a provision to allow email subscribers right from the start. It’s a good way to have a connected consumer base whom you can build trust with and tap in anytime you need them. Consider using email marketing tools such as AWeber from day one to collect email subscribers.

Set-up social media accounts and post regularly. This will help make the most of paid ads as well to have a strong base of engaged consumers. You can also create campaigns, support causes, hype the new products on there. There are numerous possibilities.

If your budget permits, consider using simple social media management and publication tools like Social Pilot.

Remember, organic traffic is the most cost effective and best way to grow your online business. It takes a lot of time, quality and quantity of content, persistence and frequent communication and it’s all worth it.”

c. Data Analysis – Have Google analytics set up on your website. This will give you very useful data on the online behaviour of your website visitors. It will also help you understand your growth, performance indicators, to know what’s working and what’s not.

d. Keep Optimizing – Take into account the feedback, the data, the experience and keep on optimizing your marketing strategy. It’s a constant process of learning and adapting. Learn SEO, email marketing, running campaigns and even explore Chatbots if you find them useful for your business type.

Social media listening is a great and organic way to hear your customers online. Google alerts is simplest form of online monitoring and mentions of your brand and company names.

Step 10.

Branding. This process can be done right in the beginning itself but if you haven’t yet, now is the time to do it. Now that you have a growing business, you would want to have the copyrights, trademarks and legalities out of the way.

Plus, branding done right, is a really good way to grow your business. Only when people start identifying with you and trusting you, they will become your loyal and regular consumers, therefore:

a. Register your business – You can now use Business Registration Online (BRO) and get a BR (Business Registration) number and then register into the five main CRA (Canada Revenue Agency) programs. These include corporate income tax, GST/HST, import export, payroll deductions and registered charity.

Having registered into any of these five programs with a BR number now you can let BRO transfers you any of the three provinces provincial programs with online business registry.

For details about the process check this official government page.

b. Get trademarks, copyrights and legalities done. For copyrights information in Canada, refer this link and for trademarks refer this one.

Setup your Privacy policy – Try utilizing simple websites and tools like TermsFeed , Privacy Policies or FreePrivacyPolicies. Make sure the data you are collecting is safely protected. GDPR in general and CASL compliance in Canada is the need of the hour.

c. Incorporate branding into your marketing strategies as well.

And that’s it. We sincerely hope this article helps you get started with an online business soon.

Beware of these factors to avoid failure.

The Canada Start-ups research shows that most start-ups fail within one year and it is often due to the same few reasons. These are:

a. No Business or Action Plan
b. Bad Idea (Result of inadequate market research)
c. Inexperience of the Business owner
d. No Capital/ Funding.

Thus Step 11 is to ensure steady sustainable growth.

  • Define your revenue streams.
  • Make sure you have done adequate market research before you start and highlight your USP’s.
  • Ensure your niche is something you are experienced in.
  • Setup goals and keep a timely track of your achievements.
  • Keep consistency in monitoring the performance of the business.

And as a new business owner, it’s easy to feel overwhelmed with all the varied tasks you are supposed to carry out. It’s okay to outsource and hire outside. We can certainly help you launch and grow organically. You can also get Virtual assistants (VA), writers, marketers, graphics designer, developer, accountant, legal experts online.

Most importantly, ensure that you have timely funding available and here’s our checklist that comes handy before you decide to launch.

Apart from this be in the know-how of marketing regulations. This official resource will help to stay updated. Good luck!


  1. Hi there,
    You have some very valuable content.
    For some reason nobody seems to talk about ecommerce business insurance.
    Do you have any insight on this and where in Canada is best to get it?
    Thank you,

    1. Hi Cora,
      Thanks for the great feedback.
      e-commerce is new to Canada at least in terms of insurance, banking, regulations and taxes.
      Its like you will have to know federal vs provincial vs county/city where you desire/operate from to check what will matter to your business in specific. It will also greatly depend upon the type of goods or services being sold.
      I haven’t really purchased one but I guess going with a big bank/reliable insurance provider should be your best bet should you really need to buy one.
      In my experience, while buying multiple insurance types – phone with an agent is always the best way than looking for quotes online (at least in Canada) You will get good customer experience with better prices if not anything else!
      Here are some great articles and providers.
      Hope this helps. Good luck

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