Retail Business Guide

Table of Contents

Introduction
Getting Started
Regulations
Taxation
Financing
Managing Your Operation
Associations
Next Steps

Introduction

A retail business sells products directly to consumers from a location such as a storefront, a mobile kiosk or an online shop.

This guide will give you general information and regulations for operating an independent retail business. For information on buying a franchise, visit the Canadian Franchise Association website or call them at 1-800-665-4232.

Read online:
Franchising

Getting Started

When you start a business there are several things to consider before you can sell your product or service. Most businesses in Ontario need to complete a minimum of three basic steps:

• Find out what licences and regulations apply to your type of business
• Choose a business structure and register or incorporate
• Determine if you will need to collect and remit HST

Our business start-up guide will give you more information on these steps and other basic requirements for starting a business in Ontario.

Read online:
Business Start-Up Guide

Choosing a Location

For most businesses, choosing an appropriate location is critical. Your ideal location will depend on your business needs, zoning restrictions and where your customers and competitors are. Taxes, noise and the local business environment are also important factors to consider when reviewing your options.

Read online:
Choosing and Setting Up a Location

Contact your local municipality to determine what zoning requirements will apply to your location before you start selling. Visit the Association of Municipalities of Ontario (AMO) website for a listing of municipalities.

Read online:
Association of Municipalities of Ontario

Selecting Your Inventory

Your inventory is made up of the products you have in stock. Managing your inventory accurately will show you which products are in demand and which ones are not selling. Keeping track of what you sell can make it easier to determine which products to stock.

Read online:
Inventory Management

Selecting Your Supplier

A supplier provides the products you need to run your business. Finding the right suppliers and managing your relationship with them is an important part of running a retail business.

Read online:
Finding and Managing Suppliers

You can also get information about potential suppliers through our Secondary Market Research Service. Contact us through the Business Info Line or read more online:

Business Info Line
1-888-745-8888
Secondary Market Research Service

Regulations

Your business may need licences and permits from the federal, provincial and municipal levels of government.

In addition to the information you will find in this guide, you can use BizPaL—an online search tool—to find licences and regulations that may affect your business. You can also contact the Business Info Line to speak to someone about starting your business.

Use online:
Permits and Licences Wizard

Contact the Business Info Line:
1-888-745-8888

Your retail business may need to follow several different regulations depending on your products and activities, including: 

General Product Labelling

The label you put on your product is an important way of communicating the value of that product to potential customers. You can use your labels to sell the benefits of your product to your clients, but you must follow labelling rules and standards.

The rules can be more restrictive for some types of products than for others. You should research the regulations and standards for your product before selling them.

Read Online:
Product Labelling

Consumer Product Labelling (Non-Food)

There are labelling standards for everyday consumer products (like t-shirts, office supplies and pet food) that you need to know about before you begin selling products.

The Competition Bureau regulates labelling for most “non-food” consumer products. To learn more about the rules for packaging, labelling and advertising your products, contact the Competition Bureau directly or refer to the following link:

Contact the Competition Bureau:
1-800-348-5358
Labelling Corner

The Competition Bureau also publishes individual guides on labelling requirements for certain business activities and consumer products. Refer to the following guides if you need more information on a specific aspect of labelling:

Labelling - Packaging Consumer Products (Non-Food)

Learn about your responsibilities when packaging and labelling consumer products (including pet food).

Read Online:
Guide to the Consumer Packaging and Labelling Act and Regulations
Consumer Packaging and Labelling

Made in Canada

Learn about the rules and regulations for using claims like "Designed in Canada" or "Made in Canada" to promote your products.
Read Online:
"Product of Canada" and "Made in Canada" Claims

Labelling Textiles

If you are selling textile products such as clothes, carpets or upholstery within Canada, the product should be appropriately labelled.

The label on your products must show the fibre content information in both English and French. The Canadian manufacturer, processor or finisher must be identified either through a CA Number (for Canadian dealers only) or by listing their complete business name and postal address.

For specific textile labelling requirements, visit the Competition Bureau website.

Read online:  
Guide to the Textile Labelling and Advertising Regulations

Labelling of Upholstered and Stuffed Articles

Upholstered or stuffed products sold in Ontario must list the material used for filling and meet specific labelling requirements. Your product labels must be securely attached and made of a white durable fabric or synthetic material. Visit the Technical Standards and Safety Authority (TSSA) website for more details.

Read online:
TSSA - Upholstered & Stuffed Articles

Food Safety and Labelling

Your local health unit is the main contact for information on food safety. Local health authorities are responsible for carrying out food service inspections.

You should contact your local health authority and arrange an inspection of the premises/equipment/and processes to make sure your business is complying with provincial and federal legislation.

The following link provides a list of contact information for local health authorities that perform inspections on restaurants and food businesses in Ontario.

Read online:
Local Public Health Contacts

In addition to contacting your local health unit, if you are involved in the production, service or processing of food products, you will need to comply with safety standards and labelling regulations from the Canadian Food Inspection Agency (CFIA) and the Ontario Ministry of Agriculture and Rural Affairs (OMAFRA).

Contact CFIA:
1-800-442-2342
Regulated products and sectors

Contact OMAFRA:
1-877-424-1300
Regulations for the food industry

Music Licence

When your business uses recorded music, you are responsible for obtaining the right licence(s) for that use. The Copyright Board of Canada works with individual copyright collective societies who provide music licensing. Contact the following two organizations for more information.

Tobacco Retail Dealer's Permit

In order to sell tobacco products, you are required to have a Tobacco Retail Dealer's Permit. If you plan on importing tobacco products, you will also need an importer's registration certificate.

Stocking or selling cigarettes that do not have an Ontario tax mark (yellow tear strip) is prohibited. Unauthorized possession of unmarked cigarettes may result in penalties, fines, imprisonment and forfeiture of the product.

Contact the Ministry of Revenue:
1-866-ONT-TAXS (1-866-668-8297)
Tobacco Retail Dealer's Permit
If You Sell Tobacco - What Retailers Need To Know About Ontario's Tobacco Tax Rules

Smoke-Free Ontario

Find out what your responsibilities are for marketing, packaging or displaying tobacco products. You must also follow the regulations that apply to smoking in public places like offices, shops, or bars and restaurants.

Contact your local Public Health Unit: 
Public Health Unit Locations 
Smoke-Free Ontario – How the Act Affects You

Tobacco Sales

The manufacture, sale, labelling and promotion of tobacco products is regulated in Canada. Find out what regulations will affect your business if you sell tobacco products.

Read Online:
Tobacco: Federal Regulations

If you sell tobacco products, you should also contact the municipality where the business will be operating for any local licences or permits that you may need.

Contact AMO:
1-877-426-6527
Association of Municipalities of Ontario

Lottery Tickets

To sell lottery or gaming products, you must be an authorized retailer.

Selling Ontario Lottery and Gaming Corporation (OLG) Products

If you plan on selling lottery products on behalf of the Ontario Lottery and Gaming Corporation (OLG), you must be registered with the AGCO.

Contact AGCO:
1-800-522-2876
Lottery Retailer

Selling Break Open tickets

A licence is required from the Alcohol and Gaming Commission of Ontario (AGCO) in order to sell Break Open tickets.

Contact AGCO:
1-800-522-2876
AGCO - Break Open Ticket

Legal Questions

If you have legal questions, contact a lawyer who deals with business regulations. The Law Society of Upper Canada's Lawyer Referral Service may be able to assist you in finding a lawyer, based on your needs.

Contact the Law Society of Upper Canada:
1-800-268-8326
Law Society of Upper Canada's Lawyer Referral Service

Taxation

Depending on your location and the type of products or services being offered, federal, provincial and/or municipal business taxes may apply.

Read online:
Taxation Guide

If you sell goods and services in Ontario, you may need a business number to collect and remit the Harmonized Sales Tax (HST). Most businesses that make less than $30,000 in any 12 month period are not required to charge HST; however, you can register voluntarily and claim input tax credits. Speak with the Canada Revenue Agency (CRA) for more information.

Contact CRA:
1-800-959-5525
Canada Revenue Agency – Business

Financing

Canada Business can help you find government financing options for your business. There are programs that apply to businesses across Canada, and others that apply only to businesses in Ontario. Use the Canada Business financing search tool or browse by type of financing.

You can also access Canada Business information through the ONe-Source online financing wizard. The wizard guides you through 3 easy steps to create a personalized list of results for Ontario business financing programs.

Search online:
Canada Business: Government Grants and Financing
ONe-Source Ontario Business Financing Guide

Contact the Business Info Line:
1-888-745-8888

Managing Your Operation

The success of any business starts by setting goals and managing the ups and downs of daily operations. Here are some key factors to consider when starting your business.

Marketing and Advertising

Marketing can help you determine the value of your product or service and communicate that information to customers. Depending on your market and its size, you can consider using flyers, business cards, brochures, newspapers, radio, TV, the phone book or the Internet. Keep in mind, a satisfied customer or a positive referral is often the best form of advertising.

Read online:  
Developing a Marketing Plan 
Marketing and Sales

When preparing your marketing and/or advertising material, there are regulations to follow. When you promote a product or service, your customers need to have enough information to make informed choices. You can get more information on advertising requirements from the Competition Bureau.

Contact the Competition Bureau:
1-800-348-5358
Misleading Advertising and Labelling

Setting the Right Price

Setting the right price is important in ensuring the success of your business. Here are a few questions you may want to consider:

• What is the current price for your range of services in the industry?
• What is your competition charging?
• What is the total cost of running your business?
• What is the minimum acceptable profit you need to generate from your business?

When determining your fees, make sure you include the cost of your labour, the overhead and the expenses that will be incurred.

In the end, the right price for the service is the price that the consumer is willing to pay. Correct pricing decisions are often key to successful business management.

Read online:
Pricing

Insurance

Having the correct business insurance can provide peace of mind. Contact an insurance agent to discuss your business insurance options, or to develop a plan that is right for your business.

You may also wish to contact your local chamber of commerce or industry association, as some organizations offer members lower rates on their business insurance.

The following list is included to remind you not to overlook the complex areas of business insurance. It is best, however, to discuss your specific requirements with your insurance agent.

Basic insurance:

• Fire insurance (extended coverage on buildings and contents)
• Liability insurance
• Burglary protection (theft coverage)
• Dishonesty insurance (covers thefts by employees)

Read online:
Insurance for Your Small Business

Counterfeit Currency Detection

If your business accepts cash, you and your staff should be trained to recognize counterfeit currency. From checking bank notes to preventing and reporting counterfeit bills, get free materials and information from the Bank of Canada.   

Read online:
Counterfeit Prevention

Associations

There are many associations that may be of interest to you. It is not necessary to join an association, but some of the advantages include:

• Promoting and exchanging marketing and promotional ideas among members
• Establishing and encouraging high standards of quality and professionalism

Examples of associations include, but are not limited to:

• Retail Council of Canada
• Canadian Federation of Independent Business
• Canadian Federation of Independent Grocers
• Ontario Convenience Stores Association
• Retail Merchants Association of Canada Inc.

Next Steps

For other information that relates to starting your business, you can read the following guides:

• Business Planning
• Market Research and Statistics
• Starting Your Business
• Grants and Financing
• Taxation Guide
• Employment Regulations Guide: Hiring

Additional resources that may be of interest to you include:

Trade Data and Statistics

You can find information on sales, inventories and operations costs for different retail categories on the Statistics Canada website.

Read online:
Retail trade, operating statistics, by province and territory

Privacy Protection

Learn how to protect the personal information you collect and to prepare your staff to respond to enquiries and complaints from the public.

Read online:
The Office of the Privacy Commissioner of Canada
Build a Privacy Plan

Business Information by Sector

Access information about a specific industry’s performance, compare your business with the industry averages, and connect to buyers, distributors and partners through Industry Canada’s “Industries and Business” website.

Read online:
Industries and Business

Scanner Price Accuracy Voluntary Code

If you use a UPC or barcode system to scan your products at checkout, you may be interested in learning more about the Scanner Price Accuracy Voluntary Code. Retailers that participate in the program show a commitment to scanner price accuracy and have access to a national framework for dealing with scanner price accuracy issues.

Read online:
Scanner Price Accuracy Voluntary Code

You can also find books, magazines and other relevant print material at business service organizations in your community. To locate a Canada Business Ontario (CBO) community partner, contact us through the Business Info Line at 1-888-745-8888.

Need more information?

Click: Canada Business
Call: The Business Info Line, a collaboration between ServiceOntario and Industry Canada, at 1-888-745-8888
Visit: Find a Community Partner Location near you

Disclaimers

Information contained in this document is of a general nature only and is not intended to constitute advice for any specific situation. Users concerned about the reliability of the information should consult directly with the source, or seek legal counsel.

Some of the organizations listed above are not subject to the federal Official Languages Act or the French Language Services Act of Ontario. Their services may not be available in both official languages.