Can a Youth-Owned Business Be Insured?

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What Steps Does a Youth Need to Take to Start a Business in Canada?

You’ve got a stellar idea and want to launch your own business. But where to start? Here are a few recommended steps to take:

• Determine What Type of Business You Want

Whether you fancy starting your own landscaping and lawn care company, launching a technology startup, or establishing an e-commerce business, research to ensure there’s a need for what you want to sell or provide. Identify who your future customers are and how your business can help them resolve their problems or provide them with the products and services you can offer.

• Test Your Idea

Get your classmates, teachers, friends, and family involved by getting their thoughts on your business idea. If you’re creating a product, get them to try it out and give you feedback. That can help validate your idea or identify problems that you need to address to improve upon what you’ve started.

• Draft a Business Plan

You’ll need a business plan to get your company up and running. A business plan is a straightforward document outlining what your business objectives and financial forecasts are, and the market or customer audience you’re targeting. It’ll help you set goals, measure your progress, and identify what you need to be successful. You’ll also need to choose a business structure, business name, and register your business. The Canadian government provides guidance to help with these necessities.

Your business plan is also necessary to help you get potential funding from financial institutions and investors if you need some seed money to get the business up and running.

• Get Funding for Your Business

Speaking of funding, depending on what you are looking to do, you might need to seek financial support through a loan or business grants to grow your business. Some startups require very little investment. Getting a loan from a bank will require both a business plan and a parent or legal guardian to co-sign it as your guarantor if you’re under 18 years old. You’ll also need your parents’ help establishing a business bank account and ensuring that you pay taxes.

• Have a Parent or Legal Guardian Help Set It Up

In addition to writing a business plan and securing funding for your business, you might also need a parent or legal guardian to help set your business up, especially if launching an e-commerce business or online store. 

• Use Digital Marketing to Promote Your Business

Once you’re ready to go to market, you’ll need to promote your business. There are many inexpensive ways to do so. For example, using door to door sales pitches, social media, creating an email list to send monthly newsletters to your customers and prospects, and building a website.

How Can a Youth-Owned Business Qualify for Liability Insurance in Canada?

In general, it may be more challenging for a small business or startup owned by someone under the age of 18 to obtain liability insurance. That’s because insurance companies typically require policyholders to be of legal age to enter into contracts – an insurance policy is a contract between a policyholder or business owner and the insurer. 

In most jurisdictions, the legal age to enter into contracts is 18, although it can vary by province. Here are five steps you need to take:

1. Talk to Your Parents or Legal Guardian

Since people under 18 may not have the legal capacity to enter into a contract for insurance, they may need a parent or legal guardian to act as the policyholder on their behalf. In general, minors can enter into contracts, as long as they can demonstrate that they understand the implications of the contract.

2. Get Legal Advice

Talking to an attorney experienced in business and insurance law can provide valuable guidance on navigating the process of getting insured and making sure you understand the legal implications involved with

3. Explore Your Insurance Options

Speak to a licensed insurance broker and explore your options for insurance by getting a free quote. Zensurance can help with that. After filling out our online application, we’ll shop our partner network of over 50 Canadian insurance providers to find a low-cost policy that addresses your liability risks.

4. Know the Business Laws and Regulations in Your Province

Find out what laws and regulations govern businesses in your municipality and province. You may need a licence or permit from various levels of government to operate legally. A quick way to determine if your business does is to use BizPal to see what regulations might affect your startup.

5. Research Risk Mitigation Alternatives

If obtaining adequate liability insurance is an issue for a young entrepreneur, talk to a lawyer and a business insurance broker to ask for their recommendations. For example, contractual agreements and customer liability waivers may help mitigate your potential liabilities.

Resources for Canadian Entrepreneurs Under the Age of 18

There are resources available to young, aspiring entrepreneurs to tap into to expand their knowledge and bring their visions to fruition. Here are a few options:

• After high school, everything you need will cost you, so take advantage of the free programs and resources available to you through your high school, such as labs and equipment, computers and software, shop class tools, and guidance from teachers and counsellors.

• Find a mentor who is an experienced business owner who will work with you and teach you the ropes. They can help you resolve problems, keep you motivated, and give practical advice on starting your business.

• The Business Development Bank of Canada (BDC) has many resources available to startups and entrepreneurs, including engaging with a BDC consultant who can act as a business coach.

It’s impressive and inspiring to see a teenage entrepreneur spring forward with a potentially world-changing business idea. You’re on the cusp of achieving your dreams and launching what one day may be one of Canada’s most successful companies.

Zensurance can help you get the necessary liability insurance you need to thrive and be successful. Start your journey now by getting a free quote, and let us help position your business to be the leader that you already are.