10 Steps to Starting a Business in Toronto
Toronto might be too modest to brag about its status as an entrepreneurial haven, but it's ripe for start-ups. Here's how to get your company started in Canada's largest metropolis.
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The economic recession that put America on its knees hardly touched Toronto. Steadied by strong, highly regulated banks and buoyed by an educated workforce, Canada's largest city is open for business.
"TSX is the third-largest stock exchange on the continent. It's rock solid," says Katherine Roos, manager of Enterprise Toronto, a public-private alliance run by the city to support entrepreneurs and small businesses. "The Canadian banks didn't go under, they didn't need to be bailed out."
In addition, the multicultural city is clean, safe, and full of parkland. The main disadvantage might actually be that the city doesn't tend to shout about its strengths, particularly as an incubator for a wide range of businesses.
For entrepreneurs contemplating a move to the great north, Torontonians offer these insights:
Step 1: Identify the Basic Incentives
"The strength of Toronto is that we have such a diversified economy," says Eva Pyatt, director of business services for the city's economic development and culture division. That strong economy is a natural draw for entrepreneurs.
Ontario has a low net debt-to-GDP ratio, which helps keep taxes down. Early in 2010, the international professional auditing firm KPMG, based in the Netherlands, assessed 41 large cities worldwide on their general tax competitiveness, including corporate income taxes and statutory labor costs. It ranked Toronto fifth, above New York, Los Angeles, and London.
There are many local business incentives available, Roos says. They include resource conservation and energy efficiency incentives offered through the city's Better Buildings Partnership and funding for early stage businesses from the province. An Ontario Centre of Excellence in Toronto also provides funding for rapid-growth entrepreneurs.
Roos cites Susan Ho as an example of an entrepreneur who received substantial startup support. With help from an Ontario self-employment training program and the city-funded food business incubator, she started a company in Toronto that makes tea-infused cookies. Now, more than 200 retailers are selling her Tea Aura Inc. cookies.
Step 2: Register Your Business
Toronto is one of the easiest places in the world to start a business. In Canada, it's a one-step procedure versus six in both the United Kingdom and the United States, according to the World Bank. New businesses can simply register through Enterprise Toronto.
Roos says she frequently gets calls from extremely well educated entrepreneurs who live overseas about setting up a business in the city. "They couldn't believe that they could just walk into our offices and walk out at the end of the day with paperwork showing they'd registered their business," she says.
Step 3: Check on License Requirements
Licensing for business is separate from registration, but is only required for businesses that fall into certain categories. The city's Municipal Licensing and Standards Division handles the application process, which is straightforward. Photo identification and proof of work status are required, and so is a copy of the registration along with notarized controlling interest forms, if they apply.
Roos says licensing applies to businesses, particularly those with health implications that the city regulates. The list includes hairdressers, pet shops, grocery stores, holistic centers, secondhand shops, nightclubs and restaurants among others. Applications have to be completed in person.
Step 4: Find The Best Business Supporters
Start-up strength in Toronto doesn't just stay back home. Toronto might not have its own Silicon Valley, but it has the C100, a group of Canadians working in Silicon Valley who are using their expertise to support entrepreneurs back home. The nonprofit organization's membership includes CEOs at startups as well as Oracle, eBay, Microsoft, and Google execs.
"Toronto is a pretty unique city in the sense that it's one of the most socially connected in the world," says Sarah Prevette, one of Inc.'s 30 Under 30 and the founder of the entrepreneur social networking service Sprouter. "Certainly there is a lot of support for business owners at a grassroots level."
Support includes local stewards who volunteer their time to help as well as formal assistance from accelerators and business incubators. The Toronto Fashion Incubator, Toronto Food Business Incubator, Toronto Business Development Centre, and the Centre for Social Innovation are some of the top incubators, Roos says.
Dig Deeper: Inc.'s 30 Under 30: Sarah Prevette, Founder of Sprouter
Step 5: Scope out Hiring
Finding qualified workers for a new venture isn't a problem, Roos says. Torontonians are highly educated — 64 percent of people aged 25 to 64 have a post-secondary degree. The city's population is also intensely diverse. Half of the 5.1 million people in the greater metropolitan area were born elsewhere.
