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Ai An immigrant’ it t’ ’i s guide to startin dt tt t i g An immigrant’s guide a business in Nova Scotia to starting a business in Nova Scotia This book is also available in PDF format at: www.entreprisescanada.ca/ns This book was produced in collaboration by the Canada Business Network in Nova Scotia, and Immigrant Services Association of Nova Scotia© 2006, Canada Business Network in Nova Scotia and Immigrant Services Association of Nova Scotia (ISANS) Second edition 2008 Third edition 2010 Fourth edition 2014 Canada Business and Isans acknowledge financial assistance provided by the Atlantic Canada Opportunities Agency and the Nova Scotia Office of Immigration. This document is published in electronic (PDF) format by Canada Business in Nova Scotia and Immigrant Services Associaiton of Nova Scotia. It can be accessed online in English and in French at www.canadabusiness.ca/ns and www.isans.ca DISCLAIMER. Information contained in this document is of a general nature only. The authors, Canada Business and ISANS are not engaged in rendering legal, accounting or other professional advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. EXTERNAL LINKS. Some of the hypertext links lead to non-federal government sites that are not subject to the Official Languages Act and where material may be available in one language only. ISBN Iu4-79/2006E 0-662-43067-0An immigrant’s guide to starting d a business in Nova Scotia The book was produced in collaboration by the Canada Business Network in Nova Scotia and by Immigrant Services Association of Nova ScotiaTable of Contents Section 1 : Things Unique to You as an Immigrant Entrepreneur ______________________ 5 Section 2 : Will it Really Work? _________________________________________________ 11 Section 3 : Why Culture Matters ______________________________________________ 21 Section 4 : Nova Scotia’s Business Culture _______________________________________ 25 Section 5 : The Business Start-up Pr ocess in Nova Scotia ___________________________ 35 Section 6 : Taxation __________________________________________________________ 55 Canada Business Network in Nova Scotia ________________________________________ 60 Immigrant Services Association of Nova Scotia (ISANS) ____________________________ 61 Le Conseil de développement économique de la Nouvelle-Écosse ___________________ 62 Resources __________________________________________________________________ 63 Connections: An immigrant’s guide to starting a business in Nova Scotia 3How to Use This Guide Welcome to Connections: An introduction to starting a You do not have to read Connections cover to cover the business in Nova Scotia for immigrants. day you begin reading it. As it is meant to introduce you to the business start up process, we recommend that you give This book will help you understand the Nova Scotia business yourself at least one day to work through each section and culture and walk you through the process of starting a that you try the Activity Zone tasks before you move forward. business here. Each lesson in the book should be learned in order. We This guide is meant to help you get started. It does not suggest that you read all sections, including those that you provide every detail you will have to consider. Be sure to do feel confident with already, so you get a feel for the full your research and make use of all of the resources available business startup pr ocess. to you. The guide also has some special features: Make your The inside Activity zone connection track These boxes tell you how Extra opportunity Information to contact people who can to think about the issues and that is related to Canadian help you with the lesson to ask yourself the right business culture at hand questions Are you having Advice from Tricks of trouble reading? entrepreneurs the trade Directions on Helpful hints and directions Advice from how to deal with any text to useful resources entrepreneurs who that may be difficult to immigrated to Nova Scotia understandSection 1: Things Unique to You Advice from entrepreneurs as an Immigrant Entrepreneur Starting up a business is a complex process. This guide is designed to walk you through that process here in Nova Scotia. However, before you get started, there are a few things unique to you as an immigrant entrepreneur that you need to consider: “ Take the time to find the right business idea. It’s also very important to use the expertise that • Your immigration status you have and also to take courses in Canada. • Your language skills I carry a diploma in Merchandise Retail Trade and gained retail sales experience in Germany, • Credentials recognition, and but in Nova Scotia I took an NSCC Small Business Entrepreneur course as well as ISANS • Establishing a credit history in canada. business workshops. It is also very important to establish your credit history as soon as you can. As a student in Canada, I was able to qualify for a student VISA card and this helped me to begin to build my credit record. By using your experience, studying locally, building your credit and networking with local people, you will be better prepared to open your business It worked for me and my Recreation Vehicles (RV) business in Nova Scotia.” André Trzebiatowski AT Orange RV Inc. Connections: An immigrant’s guide to starting a business in Nova Scotia 5Section 1. Things Unique to You as an Immigrant Entrepreneur Your immigration status Make your If you want to operate a business and you are an immigrant, it is very important connection to understand the immigration process and your immigration status before you begin the business start up process. Immigration, Refugees and Citizenship Canada The laws and regulations surrounding your immigration status can be complex, can be reached at so you should get the information directly from Immigration, Refugees and Citizenship Canada, or Nova Scotia Office of Immigration (NSOI). 1 888 242-2100 www.cic.gc.ca Immigration, Refugees and Citizenship Canada Immigration, Refugees and Citizenship Canada is a federal government Nova Scotia Office of Immigration department that facilitates immigration of people and their integration can be reached at into Canadian society. The department screens and approves admission 1 877 292-9597 for immigrants, foreign students, visitors and temporary workers who help Canada’s social and economic growth. www.novascotiaimmigration.ca/ Nova Scotia Nominee Program The Nova Scotia Nominee Program (NSNP) is the first step in a two-step application process for a permanent resident visa to Canada. It allows the As a permanent resident, you and Government of Nova Scotia to recruit and select immigrants who intend to settle your dependants have the right: in the province, and have the skills, education, and work experience needed to • To receive most social benefits make an immediate contribution to labour market and economic needs. that Canadian citizens receive, including health care coverage. If you have made a decision to permanently move to Canada and start or operate a business here, it is recommended that you obtain permanent • To live, work or study anywhere residency by becoming a permanent resident or a Canadian citizen. in Canada. Having a permanent status in the country will enable you to later obtain a • To apply for Canadian business number (BN), required by Canada Revenue Agency (CRA) in order to citizenship. register for GST/HST taxes, payroll for employees, incorporate your business • To protection under Canadian and more. Some exemptions around your status may apply. You will learn more law and the Canadian Charter of about these registrations throughout the guide. Rights and Freedoms. If you are not sure of the current status of your immigration file, or if you have other immigration-related questions, contact Citizenship Canada or NSOI directly. Are you having trouble reading? • Try looking things up in a dictionary. • Ask people you know who speak English for help. • Type the word or phrase into an Internet search engine and find other • Try out a language course. To find one, examples of how it is used. look up schools - language in the phone book yellow pages or online. • Use an online translator. Section 1. Things Unique to You as an Immigrant Entrepreneur 6Your language skills It is very important that you develop a good understanding of at least one of Make your Canada’s official languages. If English or French is not your first language, it is connection recommended that you take “second language” training to hone your skills. Proficiency in an official language will enable you to communicate with your For more information about customers, employees and suppliers, as well as to negotiate business deals or language assessment, contact contracts. Language Asssessment Services of Nova Scotia at There are several different assessments that can be administered to evaluate your language skills such as the Canadian Language Benchmark (CLB) that 902-431-8675 assesses English and the Niveaux de compétence linguistique canadiens (NCLC) that assesses French. www.lasns.info The tests describe what a person can do (a task), and how well he or she can do it, at each level and for each skill (listening, speaking, reading and writing). If you are not sure which language you want to improve first, consider which For more information on official language you are most comfortable with right now and consult the language training, look up chart below. It provides information on the “mother tongue” of people in Nova schools - language in the yellow Scotia (mother tongue refers to the language a person first learned in childhood pages of your local phone book, or search the internet. and still understands) and Canada as a whole. Things you need to know before your assessment • When you go to your assessment, bring your permanent resident card, Minister’s Permit, or “letter of intent” from Immigration, Refurees and Citizenship Canada. • Allow at least two hours for the assessment. An advanced assessment may take four hours. Assessment times include an intake interview and orientation to programs available. • Interpretation services can be provided to you during the assessment if you ask for them ahead of time. • After completion of the assessment, the assessor will introduce you to English programs such as schools specializing in teaching English as an additional language, classes and levels, sector- specific English programs and conversation groups available in the area. • Private English as an additional language lessons may also be available. If you are interested in private lessons (which are usually more costly than classroom sessions), ask at your assessment about how to contact a private instructor. Language(s) first learned Nova Scotia Canada in childhood and still understood English only 836,855 92.35% 18,850,405 57.38% Source : Statistics Canada, French only 30,155 3.33% 6,967,455 21.21% 2011 National Household Survey Both English and French 1,315 0.15% 57,820 0.18% Other languages 37,715 3.83% 6,551,515 19.94% Total 906,170 100.00% 32,852,320 100.00% Connections: An immigrant’s guide to starting a business in Nova Scotia 7Credentials recognition Depending on the type of business you wish to operate, you may be required Make your to go through the foreign credentials recognition process. This is usually the connection case for professional services such as accounting, engineering, medicine, teaching and law, which are provincially licensed to meet minimum professional For more information about standards. various assessment services, try visiting the following If you plan to offer a service that requires a license, it will be necessary to websites: contact the professional association or regulatory body responsible for that profession. Depending on your occupation, you may need to meet particular The Canadian Information requirements before going into that business. Centre for International Credentials: Be sure to start the accreditation process as soon as possible Depending on your profession, it could take quite some time for this to be www.cicic.ca completed. Job Bank: You may want to contact the professional association that acts as a licensing www.jobbank.gc.ca/content_pieces- eng.do?cid=223 body. A list of some of the most common professional associations can be found on the ISANS website: www.ISANSns.ca/employment/for- immigrants/professionals/ For more information about credentials, contact If you do not have a license yourself, you can still run a business if you employ other licensed individuals to do the work. In this case, your function must be Service Canada: limited to management. 1 888 854-1805 You may also wish to obtain a Canadian equivalency statement through an international credentials assessment service. They need translated documents TTY 1 800 926-9105 and, for a fee (usually about 200), they will determine the Canadian www.servicecanada.gc.ca/eng/ equivalency. lifeevents/credentials.shtml For translations, you can contact the Association of Translators and Interpreters and visit of Nova Scotia (ATINS): www.atins.org. Documents can also be translated through ISANS’s Translation and Interpretation Services, which provides Immigration, Refugees and translations solely of identification documents needed for settlement purposes Citizenship Canada: in Canada. This is a parapr ofessional level service that includes translating the www.cic.gc.ca/english/newcomers/ following documents: credentials/ • Identification cards, driver’s licenses, passports • Certificates of birth, marriage, death, and divorce • General educational university diplomas or degrees • High school diplomas and academic transcripts • Certificates of professional or vocational training Establish a credit history in Canada Building a solid Canadian credit history is very important in financial matters in Canada. You may have some cash saved to use during your first few months in Canada, but at some point, you will need to purchase inventory from your suppliers, rent a car, install a phone, lease space for your business or have a Canadian credit card to be able to make purchases over the Internet. In all of these cases your credit history will be checked. Section 1. Things Unique to You as an Immigrant Entrepreneur 8Even if you had a sound credit history in your home country, you need to establish a Canadian credit history to enable financial institutions and other lenders to assess your eligibility for credit. Credit history from your home country will not be taken into consideration in Canada. Your credit history is the record of how you have borrowed and repaid debts. Banks and other lenders pay credit bureaus to collect and report this data. They use it to evaluate your credit history by producing a ‘credit score’. What goes into your credit score Many factors are considered and put into a mathematical formula. These may include: • Whether or not you pay your bills and loans on time. • How much money you owe. • How long your accounts have been open. • What types of credit you use. • How often and how recently you have applied for credit. • Collection notices issued and judgments delivered for non payment. How you can start building a good credit history • Begin to build your credit history as soon as you arrive in Canada. • Start small and build carefully. • Apply to a bank or credit union for a credit card. • Use the credit card to buy things that will build your credit history. It is best to pay the full monthly amount by the due date to avoid paying high interest fees and maintain a good credit history. • After getting the credit card, you can apply for other in store credit cards from retailers where you often shop. This will diversify your credit history sources, which is beneficial, but remember to limit your credit card holdings to three or four at the most. What lenders look for • A record of responsible borrowing which can be seen on a credit score. • Stability: the longer you stay at the same address and/or job, the better. How a secured credit card works • You deposit cash in an account and request a credit card with a limit to match that amount (for example, 500 or 1,000). • Such cards look and work just like regular credit cards. • After six months, you can apply for another credit card. Use it to broaden your history. • After one year of using the secured card you can ask your financial institution to release the money you gave as security and you can continue using the card. This is only an introduction to credit history. Your financial institution can provide you with more information. You can pick up your copy of a credit history brochure at ISANS. Connections: An immigrant’s guide to starting a business in Nova Scotia 9Section 1 Activity Zone Activity 1 Have a language assessment. Activity 2 a) Make a list of the credentials that you would like recognized in Canada. b) Find out how to get them assessed for use in Nova Scotia. c) Find out what other credentials you will need that you do not currently have to operate your business. Activity 3 Go to a local bank and apply for a credit card or secured credit card. Section 1. Things Unique to You as an Immigrant Entrepreneur 10Section 2: Will it Really Work? Advice from entrepreneurs Owning your own business is a big commitment: your time, money and security will all be tied up in your work. Before you make that commitment, make sure that going into business is what you really want. Will you have family support and understanding? Will you be trading in a secure income for the risks of being an “ Owning your own business you must be ready entrepreneur? Are you sure you know to give a great deal of your time and energy. what all the risks are? This will often mean time you do not have to spend with your family. You have to also ask yourself if with all the energy going into your business will you always be willing to provide service with sincerity and respect. Customer service is so important. Of course, bring the strengths of your culture, such as hospitality and humour, to help establish honest, respectful relationships with your customers and employees. Before starting your own business, be prepared that you will risk a lot and not necessarily become rich but you will provide service to the community and contribute to the prosperity of the country. ” Shahrooz Sobhani Super Natural Health Products Sovereignty Enterprises Limited Connections: An immigrant’s guide to starting a business in Nova Scotia 11Section 2. Will it Really Work? Getting to know yourself Make your Owning your own business is a big commitment: your time, money and security connection will all be tied up in your work. Before you make that commitment, make sure that going into business is what you really want. Self-assessment tools can be found in a variety of places. Will you have family support and understanding? Will you be trading in a secure income for the risks of being an entrepreneur? Are you sure you know what all Call the the risks are? Canada Business Network In order to evaluate whether you are ready for entrepreneurship, you also 1 888 576-4444 need to know whether you have the skills and experience necessary to open a business or how to get those skills. One way to objectively evaluate your Or visit their online tools: readiness is to do a self -assessment. www.canadabusiness.ca/eng/ page/2858/sgc-12/ A self-assessment is an inventory of your pr evious education, training, experience, skills, knowledge and interests. It will help you discover what you are good at, what you need to improve on, and what kind of business you Contact should or shouldn’t open. Complete the self-assessment in this section’s Activity ISANS Business Services Zone to get a better idea of what you are capable of. After that, try doing a few more to be sure you have been thorough. 902 423-3607 1 866 431-6472 businessisans.ca Successful entrepreneurs recognize Check out their business The inside their own abilities and their workshops and events at: track weaknesses. They will set up a business www.isans.ca/business that will allow them to make When thinking about opening a the best use of their skills while business, it is important to know: allowing them to improve in weaker • What you like You can also visit the areas. In some cases, entrepreneurs will only use their strengths and will hire • What you don’t like Business Development Bank of people who are strong in their weak Canada website at: areas. If you choose this way of doing • What you are good at things, be sure your business can afford www.bdc.ca/en/advice_centre/tools/ to pay another person regularly. • What areas you need to work on Pages/default.aspx Are you having trouble reading? • Try looking things up in a dictionary. • Ask people you know who speak English for help. • Type the word or phrase into an Internet search engine and find other • Try out a language course. To find one, examples of how it is used. look up schools - language in the phone book yellow pages or online. • Use an online translator. Section 2. Will it Really Work? 12Business ideas There are many factors that determine the success of a business, including the Make your entrepreneur, financing and external forces but the business idea is crucial. It connection plays a major role in the overall success of a business venture. However, it is part of the early stage of business development that often goes unnoticed by those Find out about national trends, who are interested in getting into business. statistics and financial information for the industry that interests you Going with an idea “whose time has come” means that the market already by visiting: exists or can be developed for the product or service that you have to offer. If you would prefer to work with a business that is already established rather than Canadian Industry Statistics start one from scratch, you can purchase a business that already exists or you www.ic.gc.ca/eic/site/cis-sic.nsf/eng/ can purchase a franchise. home The fit between you and your idea The idea is only part of the mix that will lead to success. It must be a good “fit” for you if you are going to make it work. To test whether or not the idea can become a good opportunity, it must be assessed. An idea can only become an opportunity if the activity is possible and there is a good fit between the entrepreneur, the business and the market. To be successful in business, you have to have a combination of desire, ability and a good market in which to sell your product or service. If you have desire and ability, but find your market is too small to turn a profit, it might be better to make your business idea a hobby, rather than a primary source of income. If you have desire and a great market, but lack business skills, you have a gap that will require you to be trained or to hire people who have those skills. Lastly, if you have the ability and a market but no special desire or you are not motivated to run your business, your business might fail. Small Business Model Source : ISANS and the Centre for Woman in Business Connections: An immigrant’s guide to starting a business in Nova Scotia 13When generating ideas, it is important to understand the market but not to limit your ideas. An idea that might seem impossible may be the idea that links you to a good opportunity. So while you are generating ideas, keep your mind The inside open to all possibilities. track People often start businesses in a field that they know well. Be willing to explore If you have a business idea ideas that are outside your present field of vision. The new area may be the one that requires a high level of that is the right opportunity for you. Once you have decided on a few ideas, technological engagement and evaluate them by using market research techniques. innovation, there are special programs and services available S.W.O.T. analysis to you, including business incubation (which means another One of the commonly used market research tools is S.W.O.T. analysis which organization provides some of stands for Strengths, Weaknesses, Opportunities and Threats related the facilities you will need) and to your business. Strengths and weaknesses are internal factors that you can special financing programs. control; for example, the strength of your business might be excellent customer service or low prices; weaknesses might be high rent, or a poor location. For further information contact the Atlantic Canada External factors are the ones which are beyond our control, such as trends that Opportunities Agency at can positively affect the business and create opportunities or strong competition and high import duties that can be threats. Analyzing these four components 1 800 565-1228 might help you better understand your potential idea and give you ideas to improve it. www.acoa-apeca.gc.ca For more information about S.W.O.T. analysis, visit the website: www.businessballs.com/swotanalysisfreetemplate.htm Innovation for small business While innovation can mean using technology to make your business stronger, it can also mean finding a way to do things more efficiently. Innovation does not need to include technology, although it often does. Sometimes being an entrepreneur means you need to think “outside the box”. Outside the box is a figure of speech in Canada that means to do something differently from the way you normally would. In the case of thinking outside the box, you are looking for creative ways to overcome the obstacles that every entrepreneur eventually encounters. For example, if you are going to sell imported cookies, the first thing you might think of is opening your own store, but what about asking schools and charities whether they would like to sell them for fundraisers? Have you considered selling them on the Internet? Some questions to ask yourself before you start your business • What does everybody do when they do this? • Could this be done a different way? • Is this the most efficient way I could be generating profits? • How is this usually done in my country of origin? • Is this done differently here? • Is there a way I can take advantage of a cultural difference? • What do I need to do to make my idea a reality? Section 2. Will it Really Work? 14Buying a small business Make your Purchasing a franchise connection When you purchase a franchise, you are buying the right to use a business For more information contact name and business practices that have already been successful in another the Canadian Franchise location. There will be a franchise fee and you may be required to pay a fee in Association at the form of a percentage of your sales to the company that owns the name you are using. Franchises involve a lot of laws and regulations, so be sure to do your 1 800 665-4232 research first if you are thinking about this option. www.cfa.ca To locate a franchise opportunity The CFA represents over 500 franchise businesses that follow • Read franchise trade journals, which can be located with the help of your the organization’s code of ethics local public library. • Apply to work at the franchise outlet of a business that interests you. • Attend franchise trade shows. To ask about buying a • Do an internet search of the franchise you are interested in. business, contact • Do a search of the word franchise on the internet. Community Business Development Corporations Before moving ahead, you should also consider whether the franchise you have 1 888 303-2232 in mind is a good fit for you. Ask yourself: and visit their • What is the local market like? Business Atlantic website at • How do I know the franchise will be successful? www.businessatlantic.ca • Is the franchise I am interested in available in my area? • Do I have previous experience that will help me? Contact • Do I have enough money to purchase the franchise? • Will there be cultural or language barriers with the organization I will be ISANS Business Services purchasing the franchise from? If so, how will I deal with them? 902 423-3607 Research the franchisor. Look into things like the financial state of the parent 1 866 431-6472 company as well as the success enjoyed by other franchisees. You can also contact organizations like the Canadian Franchise Association for more businessisans.ca information. Consult a lawyer before you sign any contract. Visit the Businesses for Sale Purchasing an existing business lisitngs on the ISANS website at: Some business owners in Nova Scotia will be old enough to retire soon and www.isans.ca/business some of them will be putting their businesses up for sale. Buying a business that is already established has some advantages. For example, you can see whether or not the location of the business is good considering what it’s selling, whether sales are growing or declining, plus you may be able to keep employees who are already trained and contributing to the success of the business. Connections: An immigrant’s guide to starting a business in Nova Scotia 15A few suggestions to get you started • Tell people that you are interested in buying a business but haven’t located Make your one yet. It’s amazing how far word of mouth will take you. connection • Visit the Businesses for Sale listings on the ISANS website. • Contact your local Community Business Development Corporation (CBDC) to To obtain free market research get information on business opportunities, workshops or events that might information, contact help you find what you are looking for. Canada Business Network • Become a member of the local Chamber of Commerce and start to network. 1 888 576-4444 You may meet an entrepreneur who wants to sell. www.canadabusiness.ca • Network as much as you can. You never know when someone will hear you talking and present you with an opportunity. (For help developing your research strategy and for • Try contacting a business broker. For example, www.bizbrokerdirectory.com access to statistics) • Read the “business opportunities” section of the classified ads in the local newspaper. • Check business for sale listings on the Multiple Listings Service (MLS) website. ISANS Business Services www.mls.ca 902 423-3607 1 866 431-6472 A few things to keep in mind businessisans.ca • Do your own research before you buy to confirm the business is a good investment. You want good value for your money. www.isans.ca/business • Take your time and make sure everything you are given is correct and true before you commit to buying the business. Innovation, Science and • Examine at least three years of tax filings and financial statements. Ask an Economic Development accountant to help you if you are not an expert in this area. Canada • Do not “fall in love” with the business before you do your homework. Find www.ic.gc.ca out why the business is being sold: there may be more than one reason. (For statistics and business • Do not pay too much for things like patents. information) • Buy a business you understand: stick with what you know. • Base your decision on potential profits, not the price of the business. Nova Scotia Department • Do not spend all your money on the purchase of the business. There may be of Finance additional costs in the future. 902-424-5554 • Ask the current owner to share his or her secrets of success with you. www.novascotia.ca/finance It is also extremely important to get professionals, like a lawyer and (For provincial statistics) an accountant, to help you make an informed decision. They are more familiar with the local landscape and can help you avoid some of the difficulties that may otherwise arise. If you can establish that the business is a good investment and a good fit for you, keep researching For example, how steady are the profits? Some businesses have a sales cycle, while others move along at a steady pace. Sometimes these cycles are over years, sometimes over weeks or months. It’s also a good idea to consider whether there will continue to be a market for the business’s products or services. Use your network to find out whether there are other things you need to consider before buying the type of business you are interested in. Section 2. Will it Really Work? 16Finally, get to know the current state of the business. Some businesses carry debts, or offer warranties that you will have to honour later. You also need to find out whether there are good employees on staff who will stay if you take Tricks of over as their manager as well as whether you will be able to continue to use the the trade same suppliers and service providers the former owner used (at the same price). Your local public library is a great place to access free information on how Conducting Market Research to successfully run your business Get to know your customers and competitors. It is important to find out as in Nova Scotia. At the library, much as you can about the people you want to sell to, the competition you you will find business articles, books and business directories might face, industry trends, and your potential market share. Remember to that are industry related as well keep your market research for later; you will need it for your business plan as many other helpful resources. if you decide to go ahead. In fact, some entrepreneurs choose to start their business plan at this point (see Section 5 for details on how to write a business While you are there, ask plan in Canada). a reference librarian to help you find what you are looking for or Researching the customer book an appointment if you want them to focus specifically The first thing you need to do is to consider whether the market will want your on your questions. product or service. Once you’ve done that, you might want to see whether other people, like a group of potential customers or a business counsellor, agree Librarians are able to help you with you. with finding sources and with using complex statistical data • Who will buy your product or service? presented in some of the • Where do they live? publications. • What are they like (age, gender, do they have children, etc.)? To locate the public library • Why would they buy your product or service? nearest you, look in the Yellow Pages or visit this website: • How often would they buy it? • Where would they buy it from? A store? A tradeshow? On the Internet? www.library.ns.ca/content/nova- • Do your buyers have preferences regarding your product or service? scotia-public-libraries • Will you be able to build customer loyalty for your brand? • What sort of image do you want your product or service to have? Researching the competition You will also need to do research on your competition. To get information on the types of businesses that are operating in your area, try searching on the Internet and contact organizations that have access to databases that list companies by location and services (the Canada Business Network has several that are available free of charge). Databases can help you collect information, but remember that you will have to interpret that information yourself. • Who are your competitors? • What are their strengths and weaknesses? • How do you compare to them? • How do you think they will react when you open your business? • Will people be willing to purchase your product or service from a new source or are they already loyal to another business? • Is there existing good will for your business? Connections: An immigrant’s guide to starting a business in Nova Scotia 17Can you make a profit? Finally, you will have to decide how much money you will charge for your product or service. At this point, you need to make sure that you can cover all your business costs and still make a profit. Again, keep your work so you can add this information to your business plan later on. While deciding on pricing, think about the cost of your materials, labour costs and overhead, such as workspace, business supplies, transportation (like a car and gas), delivery fees, telecommunications, taxes and insurance. Suppliers should be happy to help. To get accurate information, contact potential suppliers for estimates on supplies and check the average wages for employees in your industry if you will be hiring staff (the same organizations that help you with your market research can help you with your search for this information). If you will be hiring employees, you will also be responsible for additional employee benefits like holiday pay, Employment Insurance and the Canada Pension Plan. The economy can and does change and the cost of delivering your product or service might increase over time, so be sure to consider that it might be more expensive to run your business next year than today. You might have to raise prices. Once you know how much you have to charge to cover your own costs, you have to decide how much extra you will charge to make a profit. This is called “mark up,” and it can be a very tough decision. While you are doing this to make money, the price you set can be too high or too low to hold the interest of your customers. Questions to consider when determining mark-up • Will price be important to your consumers? • What are your direct competitors charging for similar products or services? • Will you be offering price rebates, such as introductory offers or year-end clearance sales? • Are you going to match your competitors or try a lower price? • If you are charging more than your competitors, why will people pay more for your product or service? • Will you accept returns and offer refunds if people are not happy with what you are selling? If so, how much might this cost? • Will you use coupons as part of your advertising? • Will you offer extras like gift wrapping or free installation? • Will you offer discounts when large quantities are purchased? • Will you offer warranties on your product or service? • Will you accept credit cards, which will cost your company a certain percentage of your selling price? At this point, it may be difficult to estimate all your costs, so add in a little extra to cover the unexpected. Section 2. Will it Really Work? 18