It has never been easier to start and run an online business in Canada. The amount of money you make online correlates with the amount of work you are willing to do, but virtually anyone can learn how to do it. Whether you want to start a home business or become the next ecommerce behemoth, the internet levels the playing field and offers endless legit business opportunities.
When I started working online over 20 years ago, the logistics involved with online sales were much more difficult and expensive than they are today. These days, everything is designed to be user-friendly for the average person. You don’t have to be a techie or even hire a website designer to start making money online.
However, one complication has remained: finding Canadian-specific information for starting a business online (or bringing an existing offline business into the Internet age). That’s the inspiration behind Online Business Canada, in fact. While the website covers individual challenges, this checklist is designed to guide you step-by-step through the entire digital startup process. You’ll need to learn more about some tasks on the list, which you can do as you go along without losing your place in the overall process.
Much of the process is the same as it would be for starting any business in Canada. However, you’ll find some steps are necessary for one type of eBusiness, but not for a different type. For example, you may need a robust ecommerce platform for online retail, or only a simple shopping cart to sell a few information products, or just a basic way to receive payments if you’re providing a service. Following our guide makes it easier to narrow down what you need, so you can skip or customize the process until it’s perfect for you.
Checklist: How to Start an Online Business in Canada
_____ Choose your niche and business name. If you’re still looking for a niche, read:
How to Choose the Best Products to Sell Online in Canada
5 Quick & Easy Online Businesses to Start in Canada
10 Hot Product Niches to Sell Online in Canada
10 Low-Cost Side Businesses you can Start Online from Home
When you’ve decided on a business name, register it.
_____ Figure out exactly what your business is offering and why it’s exceptional (also known as your Unique Selling Proposition). Dig into who your buyer is, and how you can best reach and serve them online. This information is critical to your strategic planning, from pricing to marketing.
_____ Open a business bank account and PayPal account. Even if you’re only operating under your name, having a business account will make it much easier to track income and expenses. It also makes it easy to save for your income taxes and GST/HST payments. Additionally, you can get a designated credit card to help track expenditures.
_____ Funding doesn’t have to be in place in the beginning, but it sure helps. Check out Government financing, Government grants for Canadian businesses, or private sector financing. Keep an ear to the ground for tech or innovation programs and grants that you may qualify for, just because you do business online. Consider crowdfunding if you have a particularly innovative idea.
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_____ Manage your finances from day one. It’s critical in order to become and remain profitable. Plus, it will save you money and spare you from headaches at tax time. User-friendly accounting software is worth its weight in gold, such as the popular TurboTax Canada. From there, you’ll need to outline your budget and determine exactly how much you need to earn in order to be profitable and pay the bills.
_____ Define your revenue stream. How will you make money? Are you promoting services, affiliate marketing, selling digital or physical products? Research wholesale suppliers & get your inventory in place. Study your options and implement them immediately. You can change your mind or add to your income strategy later, but you have to start somewhere.
_____ Domain registration and selecting a website host is one of the most important steps you’ll take when starting an online business in Canada. We have unique requirements and legal concerns in this country that many newcomers are unaware of, which results in mistakes that waste both time and money. It’s so important that we have a separate checklist for choosing a website host to guide you through this step alone. We use GreenGeeks’ Canadian servers to host our sites.  Tip: If you don’t want to start from scratch, check out over 1 million premium domains at Buy Domains.
._____ Choose an information management platform (such as WordPress). Most hosts now come with popular free platforms and feature easy installation.
_____ Choose a shopping cart or ecommerce platform that’s suitable for the Canadian market and beyond. If you intend to grow, make sure the platform can grow and expand with you.
_____ Accepting payments online is easiest (and most secure) if it’s included in the shopping cart or ecommerce platform you choose. Whether you process payments through a payment gateway or have an in-house solution, you’ll need to familiarize yourself with PCI security standards for account data protection.
_____ Hire a website designer or set about learning how to design the site yourself. Many website hosts, ecommerce platforms and information platforms (like WordPress) have a wonderful selection of templates and are made specifically for people who have little technical knowledge of design. Some of the better ecommerce platforms can also provide design services, such as Canada’s Shopify.
_____ Content is crucial to attract customers to your website and for organic search engine optimization. It will also establish your level of expertise and reflect the quality of your product or service. You’ll need to write or acquire high-quality content from day one. Freelancer is a popular site for finding freelance writers/bloggers.
_____ Online marketing is a natural fit for any online business. You’ll need to set up social media accounts, newsletter software, and so on. Whatever digital marketing method you use, try to call attention to the fact that you’re a Canadian business. A VL Omni survey recently found 62% of Canadians who shop internationally online, would rather shop domestically. Several other studies have come to the same conclusion. This step also includes keyword research, which is much easier with keyword research and competitive intelligence tools. Additionally, starting an affiliate program can accelerate your launch and bring in sales and conversions indefinitely.
_____ Start your traffic plan from day one. Incorporate Search Engine Optimization (SEO) for organic traffic, build legitimate backlinks to increase your search engine rank, use shareable images/infographics/memes to encourage social media sharing, etc. Your job doesn’t stop with publishing a website and generating traffic, however, you’ll need to track, analyze and adjust your strategy based on the data generated. The sooner you start tracking and testing, the sooner and faster your sales and traffic will grow. Use the Customer Relationship Management (CRM) tools that come with your information management or ecommerce platform, and set up Google Analytics.
_____ Exceptional customer service can give you a serious competitive advantage and provide invaluable insights. Web-integrated call management and tracking systems like SuiteCRM (free) facilitate multi-channel tracking and management of customer communications.
_____ Hiring a Virtual Assistant (VA) with a broad skill set and experience in online business, can be the best decision you make. If you don’t have to take the time in the beginning to learn and implement everything, you’ll launch and be profitable that much sooner. Try to find a VA that can help you with everything from managing your website to marketing, content and graphics design. A good VA doesn’t cost you money, she makes you money.
Frequently Asked Questions
- Do I need a business license for an online business?
Once you know the name and address, the first step for many is business registration, which may include registering in multiple provinces if you intend to do business nationally. Contact your local branch of the Canada Business Network for information specific to your province. To find out how to apply for a business license or permit, search for information specific to your province on the BizPal search tool. The results will include the government resources you need. - How do taxes work for online businesses in Canada?
Tax information and reporting requirements for doing business online are available on the Government of Canada CRA website. - What about Canadian ecommerce sales taxes?
Tax information changes frequently so we won’t go into it in detail here. If you have a Canadian-friendly ecommerce platform, the taxes will be automatically calculated at the point of sale. - Are there specific laws that apply to online businesses?
The Canadian Office of Consumer Affairs offers an Internet Sales Contract Harmonization Template in Electronic Commerce, which covers contract formation, cancellation rights, credit card charge-backs and information provision. - Do I need insurance to operate an online business in Canada?
Business insurance for an online business is similar to offline business insurance, but the focus and amount of coverage may differ. For example, an ecommerce business will need to focus more on shipping-related insurance coverage, even if you only sell on Amazon. You’ll also need to consider insurance related to cyber security. Liability insurance is recommended for a home-based business in Canada. However, it can depend on what type of business you have and if you produce the product/technology yourself. “Besides vicarious liability, emerging tech companies may also need cover for business interruption arising from a cyber event, contingent business interruption, regulatory breaches and the fines associated with them, and user-generated content,” suggests Canadian Underwriter. - Can I just buy an existing online business?
If you’re looking for an online business for sale, check out reputable website-flipping marketplaces and use their escrow service for a safe transaction. Please read How to Find, Evaluate and Buy an Existing Online Business for further guidance.
Learning the Ropes
Many people who have been successful in online business, including myself, started with zero knowledge of how to do it. When I became interested in internet business opportunities and bought my first home computer, I didn’t even know how to use a mouse. It was also much harder to find legitimate information, and very little was specific to Canadians. You’re already way ahead of where I was back then.
There are many courses available online and they often come with suspicious promises of millions in profits or a fail-proof “system”. I suggest learning the basics from reputable sources, so you are better equipped to make wise decisions regarding which “advanced” courses provide true value.
Start with online business, ecommerce and digital marketing courses on Udemy. Udemy courses are low-priced or free, including many from recognized experts. Your local library is a great resource too, especially if you’re on a tight budget. Quite often the information in books is outdated to one degree or another, but they will provide a good understanding of the basics as you learn how to make money online in Canada.
The next step is up to you!
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Melody McKinnon is an internet entrepreneur with 25 years of experience in a wide range of online business models, backed by a formal business education and enhanced by training and mentorship. She has owned or managed both educational and ecommerce websites. Her book, 7 Recession Proof Online Businesses to Start From Home, is available from all major ebook retailers.
Melody has worked with many businesses & brands in a multitude of capacities. She can often be found on CanadianDigitalMedia.com, CanadiansInternet.com, CanadianFamily.net, and AllNaturalPetCare.com, as well as other quality digital publications. Her content has earned reference links from highly-respected websites, magazines and university textbooks.
It’s getting harder to start an online business in my opinion but it’s easier than starting most brick & mortar businesses which also need a website anyway.
What would I do without you? Thanks for the link to this tutorial for starting an online business it was just what I was looking for but couldn’t find for Canada.
Hello, wonderful article here!
How does creating an (online) business name work if I live in Quebec? Do the same french rules apply – does the name still have to be in french? – if the business is online?
Thanks!
These resources may be helpful:
Language Laws and Doing Business in Quebec
Québec’s Bill 96 Explained and What It Means for Your Company Website
I want to start a home business SO BAD but it’s a frightening step outside of my comfort zone……which is probably why I’ve been procrastinating for almost 3 years 😮 Who or what can give me the kick in the pants I need to get going?
Hi… can a online Canadian Busniess get an exemption from import duties into CANADA? thanks.
What about those that are strict affiliate marketers? Promoting others stuff for a commission? Same rules?
You can find information specific to affiliate marketing in Canada HERE
Nice article, really very useful information.
Anyone know how many Canadians started online business since covid started? Working on a story. Thank you!
Hats off to you! I still have things to learn but it’s nice to have a (CANADIAN!!!) guide.
Hello,
I want to open tutoring service online/Homework help . I currently live in Ontario. What is the process? any funds available for this type of business?
The Government of Ontario has a great page to help you start a small business in Ontario.
How would this work for online sale of services and not goods? Thinking about virtual martial arts lessons as I have a 4rd dan in Shotokan Karate. Currently would not have a physical location that people would be welcome to come into but rather do everything online… Where should I reach out for something like this?
The process is the same for services as it is for products.
How old do I need to be to start a small online business in Canada?
You have to be old enough to enter into a legally-binding agreement, or have a parent/guardian do it for you.
I’m planning to sell online. I have knowledge creating websites and want to create eCommerce. Do I still need to apply for business license? I live here in Alberta.Planning to buy and sell goods from other country.
There are a lot of moving parts in business license requirements, from buying wholesale to provincial retail laws. It’s best to consult with a lawyer & accountant to ensure all of your bases are covered.
Wholesale distributor only deals with having business number but I only have website. Can I get biz # with CRA BRO without formally opting for sole vs inc ?
I make few sales but if I get volume then only plan to register later.
You can operate as an individual and claim your income. Wholesalers want a business registration number or may accept a GST number, but otherwise won’t sell to individuals without something official.
I am planning on starting a coaching business (coaching people online) and creating informational products to sell from my website. Surely I do not need to have a business licence for every province, territory and state that I sell to? I am wondering if you could help clarify that a little.
It depends on the province in question, but they all have their own regulations that you’ll have to comply with. Licensing in those provinces indicates you are aware of the specific obligations as they apply to you, and have agreed to comply. You can contact provincial governments directly for more information. Since the rules are constantly changing, we can’t go into it further.
Thank you for your response. I’m very grateful for all of the information you have compiled here. Cheers!
I am analyzing my business opportunities in Canada. Thanks for the helpful article.
Thank you for all this information, it is very helpful. Quick question, if I open a federal corporation and an Extra Provincial registration in Ontario, am I able to sell my products across the country or would I need to open a provincial corporation in all Provinces? Thank you again!
You’ll need extra provincial registration for most provinces, but each province has different requirements and regulations. You should be able to find information on the individual provincial government websites, but it’s best to have a lawyer help you navigate it all.
That saves me a ton of research so thanks for that. I tried to start an online business about 12 years ago but it confused me. It looks much easier now. I kind of wish I didn’t have to put our store online but it’s the only way to grow these days. On the other hand it’s kind of exciting. Nerveracking either way.
This tells me I still have lots of learning to do but a roadmap sure helps. You’re right trying to learn it in bits and pieces just makes it harder. thanks 4 the helps.
Read great info…CHECK! Thanks for the tips, I can’t wait to get started on an online business. If I ever settle on a niche.
Good Canadian tips. Should you make one for other countries?
Thank you for the guiding information! I have plenty of insight, but failed at mapping out my own steps. This article is now bookmarked !:)
That’s going to make it easier. I hope to start a food blog business and try affiliate marketing before the year is gone but I said that last year LOL! I have tons of food pictures taken just in case. I’m retired so the learning is slow.
Thank you so much for this article. Very informative. I’m currently living in Canada and planning on creating a website that would mainly provide services overseas. I was wondering if there is specific regulation for this kind of scenario. Do I need a special license to sell abroad? How about my taxes and business registration?
Laws and regulations are constantly changing, so it’s best to seek the advice of a lawyer and/or accountant. Local small business organizations may be able to point you in the right direction as well. All the best with your new business!
Very well done article about starting an online businesss in Canada! At this point its more of a learning plan for me and then I’ll be able to implement it to start my biz. I know what I want to do but I was totally intimidated by getting it done. Thanks so very much for your help!!
I have so many questions but having a map to follow really helps. I have a niche and a good idea of what I want to do and I knew I’d need a domain name and hosting. That’s where I fetch up every time because there’s just sooooooo much to consider and new things to learn about online business in general. I don’t even know what I need to learn in order to get my business going and keep it going! It makes it hard to find the right info. Thanks for organizing my thoughts and restoring my confidence. XOXOX
Great post, lots of information and great resources here.
What a godsend! Information overload is REAL! I gave up more than once because not only is there so much info but lots of it is old or questionable or is only about the USA. I can’t thank you enough for coverng online business for CANADIANS! I finally feel like selling online is possible for someone like me (so NOT a techy)!
Many newbie businesses neglect to Advertise or they do not advertise enough. Advertising is the only known way to keep your business going without it you’re doomed to fail.
Starting a profitable online business in Canada requires careful planning, market research, and a solid understanding of legal and financial considerations.