Guide

2
Be Creative:
Business Ideas and Models
Starting a business in New Brunswick:
3 Guides for Immigrant Entrepreneurs
Guide
1
Guide
2
Guide
3
 DISCLAIMER: While the Department of Post-Secondary Education, Training and
Labour makes every effort to present accurate and reliable information, we hereby
disclaim any liability for any errors, omissions or inconsistencies in this guide. Due to
changes to policies or programs after the guide is printed, information included in
this guide may not be current as of your reading. Please check before using
information contained in this guide. Use of this guide and its contents is
voluntary. The Department of Post-Secondary Education, Training and Labour is in
no way responsible for your use of the information contained in this guide or the
results of that use.

All information provided in this guide is for informational purposes only,

and as such should not be construed as advice. You should seek independent
professional advice from a person who is licensed and/or knowledgeable in
the appropriate area before acting upon any information contained in this guide.

The recommendations contained in the tips were gathered from interviews with
immigrant entrepreneurs and reflect their personal experience. They should not be
construed as professional advice.

This guide features information from many sources, and should not be confused
with official statements of policy and programming.

DATE OF PRODUCTION: March 2011

 Be Creative: Business Ideas and Models

Introduction
Welcome to New Brunswick! This book Be Creative: Business Ideas and Models is the second of 3 guides for
immigrant entrepreneurs who will own a business in this province. Are you interested in buying a business or
opening a franchise? Would you like to enter a partnership or start your own new business? You may know the
type of business you want to own or you may still be searching for a business idea. Guide 2 is full of information
to help you choose the right business for you.

After reading Guide 1, you know about business regulations in New Brunswick and have the contact
information to apply for permits and other business documents. As well, you know about the business sectors,
regions and infrastructure. Now Guide 2 will help you to create good business ideas and to understand your
business choices. Finally Guide 3 will show you the steps to plan your business.
Good luck as you choose the business you will own in New Brunswick!
Each guidebook is useful alone. But the best idea is to read all 3 guides in order so you learn how to become a
successful business owner in New Brunswick. The basic contents of the 3 guides are:

• Guide 1
Be Prepared: Business Environment
and Expectations informs you about
the New Brunswick:
1. Government
2. Economy
3. Infrastructure
4. Business Culture
5. Business Relationships

• Guide 2
Be Creative: Business Ideas
and Models informs you about:
1. Creating Good
Business Ideas
2. Forms of Business
3. Business Models
• Guide 3
Be Successful: Planning Your
Business informs you about:
1. Preparing for Success
2. Evaluating Your
Business Idea
3. Staying in Business
4. Learning from Others
 Be Creative: Business Ideas and Models

Table of Contents
Part 1: Business Ideas
Chapter 1 - Creating Good Business Ideas 1
Identifying Personal Strengths 2
Finding Business Opportunities 3

Part 2: Business Models

Chapter 2 - Understanding Forms of Business 13
Legal Forms of Business 13
Partnerships 14

Chapter 3 - The Business Models 17

Model 1: Buying an Existing Business 17
Model 2: Buying a Franchise 21
Model 3: Starting a New Business 27

Conclusion 33
Acknowledgements 34
 Be Creative: Business Ideas and Models

PART 1:
BUSINESS IDEAS
In Guide 1 you learned about the business
environment and the types of businesses
in New Brunswick. As an entrepreneur, you Chapter 1 - Creating
probably recognized some interesting business Good Business Ideas
opportunities in the province. Possibly an
opportunity here matches a business idea you The next section helps you think creatively about
had prior to coming to New Brunswick. Now it is types of businesses that you might own. Most
time to develop this business idea into a plan. businesses begin with creative ideas for products
or services that can be sold to make a profit.
The following information will help you to Maybe you already know about a business sector
examine your personal business skills and the in New Brunswick that is connected to your work
areas best-suited to your abilities. This guide also experience in your home country. Or maybe you
helps you identify the business environment and discovered a type of business that you would
market factors that can help your business to like to own as you toured and learned about the
succeed. Your business plan will develop as you province. Now is the time to list all the possible
learn more about the markets for your product businesses you could own. To begin you will
or service and the people who will be your want to think creatively, so you have a choice of
customers. This section contains practical ideas good business ideas.
that you need to consider before starting your
business. One way to think creatively about business ideas
is to examine the people and the place where
As you read Part 1 of this guide, be prepared you now live. Reading about New Brunswick
with a pen and paper. As you read, write every consumer groups and buying trends is a great
business-related idea that the information way to find ideas for products and services
suggests to you. The ideas that you write will that people will want to buy. A second way to
show your personal business preferences on generate ideas is to think about the province’s
each topic.

Some of the ideas that you write will be

general information about starting a business
in New Brunswick. Other ideas will be specific
information about what strategies will be most
effective for you as you start a business in a new
place. The important point at this stage is to
write down all your thoughts on each topic to
review later when you make an operating plan
for the business you will own. You will think
more about your ideas and choices in Part 2 of
this guide when you decide on a model for your
business.

1
 Be Creative: Business Ideas and Models

geographic regions, the places where people live Skill areas can suggest business ideas. Start
and work. You can begin by making a list of New by asking yourself the following 5 questions
Brunswick resources or products that you could and writing your answers to review later.
export from the regions. Or you could consider
importing goods to fill a community need in a 1) What skills do I have?
particular region. 2) Do I need a licence or a certificate to
use my skills in New Brunswick? To help
As you read Part 1 of this guide, you will discover you identify whether you need special
many methods to think creatively about your licences or certificates you can consult
new business. First, it is important to identify the Department of Post-Secondary
your personal and business strengths. Good Education, Training and Labour online at
business ideas often develop when you examine [Link]/0381.
your own experiences and abilities, so the 3) Are there products or services in New
following section helps you to ask yourself Brunswick that relate to my skills?
questions that will suggest good business ideas. 4) Is there a domestic, import or export
market for these products or services?
IDENTIFYING PERSONAL STRENGTHS 5) Am I interested in this type of business?
New immigrants bring a large variety of personal
strengths to a community. Your background Training
knowledge and abilities from your home country Training is a larger area than skills and refers
and past work are extremely important as you to the courses or apprenticeships where you
choose a new business. Some entrepreneurs gained your knowledge or learned skills.
decide to start a business that uses their own Hands-on, practical training often takes
specialized skills or training in a particular sector, place at technical colleges or polytechnics
but first they need to recognize these personal where people learn a trade, occupation or
assets. The following section will help you to profession. Think about any programs you
examine ways to use your personal strengths in studied or skilled people with which you
developing your business idea. To begin you will worked. Then ask yourself the following 5
analyse your: questions and write the answers.
• Skills
• Training
• Education
• Experience
Tip
If you have special skills you
Skills can save money when you open
Your skills are the things you can do with a business. You do not need to
quality and efficiency. Skills may be natural hire people with those skills.
talents that you have or they can be learned This tip is given by immigrant
through education. You may have general entrepreneurs in New Brunswick.
skills, such as being good at sports, and
specific skills, such as repairing cars. 1) What training have I completed in New
Brunswick or in other places?
Think about your specific skills in the 2) Is my training recognized in New
following 3 areas: Brunswick? To help you identify
1) academic skills - example: accounting or whether your training is recognized
computer programming in New Brunswick you should consult
2) physical skills - example: baseball or the Department of Post-Secondary
sewing Education, Training and Labour online at
3) trade skills - example: plumbing or [Link]/0381.
carpentry 3) Am I interested in a business related to
my past training?

2
 Be Creative: Business Ideas and Models

4) Is there a market for goods or services experience. But experience goes beyond
related to my training? these areas to include family, culture and
5) Would further training in New Brunswick every other part of your life.
help me to start or buy a business? A person with much knowledge or
experience in a specific field may gain a
Education reputation as an expert without having
Education is an even larger area and refers to formal training or education. For example
activities that improve your natural abilities, knowledge can be gained from travelling
skills and training. Learning institutions such to many places or having experience with
as universities provide formal education. But business in a foreign country. Following are 5
questions that may help you use your life or
career experience to develop a business idea.
1) What experience have I gained from
my work, my life or my travels to other
countries?
2) What experiences have I had since
arriving in New Brunswick?
3) Could I use my experience to develop
ideas for goods or services to sell?
4) Would my experience help me to sell
goods or provide services to others?
5) Am I interested in starting a business
based on my past experiences?
education can also be informal, such as the
learning that occurs through culture, the FINDING BUSINESS OPPORTUNITIES
Internet or travel. Following are 6 questions Another way to find good ideas is to think
that can help you turn your education into a about the people who will buy your products
business idea. or services - the potential customers. This is not
1) What formal education have I easy for a newcomer to the province. First, you
completed? Degrees? Diplomas? need to know about the province’s residents,
2) Is my formal education recognized in who they are, what they like to buy and where
New Brunswick? To help you identify they live. The following information on consumer
whether your education is recognized in groups and market trends gives you useful
New Brunswick you should contact the information about who lives in New Brunswick
Population Growth Division, Settlement and how to discover what they buy. Second, you
and Multiculturalism Branch, by need to understand the places where people
telephone at 506-453-2491 or online at live. The following section suggests ways you can
[Link]/population. learn more about the markets and resources in
3) Can my formal education be recognized the province’s different regions. Remember to
by taking certain steps? add the business ideas that you develop in this
4) What informal education do I have? section to your list for later review.
5) Are there goods or services related to
my education that would make a good Consumer Groups
business in New Brunswick? Many businesses start by serving the needs
6) Am I interested in starting a business of a particular group of people, known as a
related to my formal or informal demographic. Demographics are a way to
education? study people by one common characteristic.
One example is age. You may decide to
Experience start a taxi business because you know that
Experience is the largest personal area to university students who do not own cars are
examine for business ideas. All of your skills, 40% of the population in your area.
training and education are part of your life
3
 Be Creative: Business Ideas and Models

The most common demographic divisions Members of the first 3 cohorts were influenced
used by marketers are age, gender, income and by the largest wars to involve Canada in the
education. Statistics on various demographics 20th century, the First World War or World War
are available on the Business New Brunswick I from 1914 to 1918 and the Second World
website at [Link]/0398 and on War or World War II from 1939 to 1945. The
the Statistics Canada website at following information suggests common
[Link]. characteristics and consumer requirements
for each cohort. Remember to add any
Entrepreneurs often like to sell goods and business ideas you have to your list of business
services to a demographic group that interests opportunities as you read about these cohorts
them. This may be a good idea for you because: as potential markets.
• you belong to and understand the group
• you like the group 1) Depression cohort (1912 to 1921)
• the group is easy to contact Canada experienced a major economic
• the group is large depression between the World Wars. As a
• that group usually buys the goods or result, this cohort:
services you want to sell • worries about financial security
• does not like risks
The following information divides New • likes products that have a long life
Brunswick consumers into commonly • likes comfort
recognized age demographics. Each of these This cohort requires:
groups - also called cohorts - experienced • health care products
economic and social situations that are • personal care at home
different from the other groups. As a result, • household services
each cohort has different values and consumer
practices. Because people of similar ages 2) Pre-World War II cohort (1922 to 1927)
usually buy similar things, businesses often This cohort:
target or sell to one particular cohort. You will • works for the common good
find many possible business opportunities and • is patriotic
ideas from the following cohort descriptions. • works well in teams
Be sure to write these ideas on your list.
This cohort requires:
The 7 consumer cohorts you will find in New • health care products
Brunswick are commonly known as the: • personal care at home
1) Depression cohort - born from 1912 to • household services
1921 • travel
2) Pre-World War II cohort - born from 1922 to • restaurants
1927 • household goods
3) World War II cohort - born from 1928 to • automobiles
1945
4) 1st Baby Boomer cohort - born from 1946 3) World War II cohort (1928 to 1945)
to 1954 This cohort:
5) 2nd Baby Boomer cohort also called • conforms to social expectations
‘Generation Jones’ - born from 1955 to • has conservative tastes
1964 • has traditional family values
6) Generation X cohort - born from 1965 to This cohort requires:
1980 • services to maintain health
7) Generation Y cohort also called ‘Millennials’ • leisure activities
- born from 1981 to 2001 • cultural entertainment
• house maintenance

4
 Be Creative: Business Ideas and Models

This cohort requires:

• active health care
• vacations
• entertainment
• modern electronics
• travel
• restaurants
• furniture and household goods
• automobiles

6) Generation X (1965 to 1980)

This cohort:
• is informal
• is independent
• travel • is entrepreneurial
• restaurants • values emotional security
• furniture and household goods • is environmentally concerned
• automobiles This cohort requires:
• regular restaurant meals
4) 1st Baby Boomers (1946 to 1954) • up-to-date electronics
This cohort: • entertainment
• is optimistic • sports
• tries new products and services • outdoor adventures
• values individual freedom • environmentally friendly products
• supports social causes • alternative medicines
• has higher education • international travel
• has money to spend • household goods
• is ready to retire from work • automobiles
This cohort requires:
• entertainment 7) Generation Y or Millennial Generation
• sports and leisure (1981 to 2001)
• travel This cohort:
• home maintenance • likes physical activity
• furniture and household goods • accepts change
• electronics • knows technology
• automobiles • fears environmental changes
• vacation services • uses credit
• retirement homes This cohort requires:
• financial services • electronic communications
• internet services
5) 2nd Baby Boomers or Generation • entertainment
Jones (1955 to 1964) • ecological products
This cohort: • world travel
• questions accepted values • exotic restaurants
• is practical • general consumer goods
• analyses motives • bicycles and cars
• is environmentally aware • sports
• alternative therapies and medicines

5
 Be Creative: Business Ideas and Models

Consumer Trends
What is a trend?
Entrepreneurs often start businesses based on
new consumer trends. Trends show changes
in consumer thinking and purchasing habits.
A trend is a general change in buying choices
that reflects a new way for consumers to
fulfill their needs. Consumer trends may be
caused by changing technology, social values
or economic conditions. A desire for only
one item, not a group of related products or
services, is called a fad, not a trend.

Why are trends useful in business? c) Consumers want to feel safe; surveillance
Trends generate sales. Understanding what cameras, fences, alarm systems and
your customers want is necessary so you can gated communities.
sell it to them. Knowing about consumer d) Consumers want everything in their car:
trends is a good way to identify profitable sound systems, filing systems, coolers,
goods, services or experiences, and helps movie players, GPS systems.
you to keep your customers happy. e) Consumers want to work at home using
the Internet and cell phones.
What are some current trends?
Following are 10 trends that may help you 2) The desire to be part of a group
to identify business opportunities in New a) Consumers are interested in heritage,
Brunswick. The trends are: tradition, families.
1. The desire to stay at home for b) Consumers want online groups,
entertainment travel, clothing, books, music and
2. The desire to be part of a group musical recordings, research, adventures
3. The desire for the best products and training in traditional crafts, cooking
4. The desire for many experiences in a and trades.
short time
5. The desire to stay young and healthy 3) The desire for the best products
6. The desire to use technology for a) Consumers want premium goods,
everything services or experiences.
7. The desire for small, fast products b) Consumers pay for expensive foods, cars,
8. The desire to be environmentally aware furniture, clothing, make-up.
9. The desire for spirituality c) Consumers like custom adventures,
10. The desire to make and customize tours, accommodations, experiences.

1) The desire to stay at home for 4) The desire for many experiences in
entertainment a short time
a) Consumers want home delivery of a) Consumers have more jobs and longer
goods and services, fast food, groceries, careers.
clothing, home goods and personal b) Consumers pay for home maintenance,
training. child care services, deliveries, home gym
b) Consumers want everything in their equipment.
home; gyms, movie theatres, spas, c) Consumers buy products and services
internet, large screen TVs, specialized that save time.
food preparation equipment and hotel-
like accommodations.

6
 Be Creative: Business Ideas and Models

5) The desire to stay young and healthy b) Consumers want to make their own
a) Consumers use natural and non- music, videos, photo albums, books.
traditional medicines to feel younger. c) Consumers customize jeans, T-shirts and
b) Consumers act younger with rock home goods.
concerts, career training, challenging
adventures and eco-tours. How can trends help you find business
c) Consumers buy trendy clothing and ideas?
make-up to look younger. Trends are opportunities for new businesses.
d) Consumers buy therapies and Knowing about a trend or seeing it in daily
therapeutic services, vitamins, special life is an important first step. If you apply the
foods. trends to your business ideas it can help your
e) Consumers focus on exercise, fitness business succeed. You may not want to plan
equipment and clothes. your business on only one of these trends.
Your business may want to use several of
6) The desire to use technology for the trends to create a unique business. For
everything example, a travel and tour service could
a) Consumers communicate, research and feature:
buy online. • the comforts of home
b) Consumers want the newest phones, • heritage cultural adventures
computers and electronics. • premium quality foods
c) Consumers want the latest services for • Internet connections
music, research, content, training. • environmentally friendly hotels
• spiritual activities
7) The desire for small, fast products • individual tour options
a) Consumers want instant solutions.
b) Consumers want fast food, small cars, Questions to ask yourself about trends:
mini vacations, drive-through banking • Are there many consumers who are
and ATMs. interested in the trend?
• What products or services will they buy?
8) The desire for environmental awareness At what price?
a) Consumers want environmentally • What products could I develop, import,
sustainable goods and services. export or sell locally to meet the
b) Consumers will pay more for consumer needs?
environmental materials, food, clothing • What services could I develop and deliver
and furniture. to serve these trends?
c) Consumers want environmentally • Will I have enough customers for this
friendly cleaners, lawn maintenance, idea to work?
restaurants, hotels.
d) Consumers want low impact adventures
and travel. Regional Opportunities
Many people start a business that sells
9) The desire for spirituality particular goods or services because they
a) Consumers want religious and spiritual are popular with consumers in a specific
experiences. region. The business might be based on
b) Consumers want spiritual books, music, regional resources such as maple sugar or
events, memberships, training and fiddleheads that have an existing market.
personal objects. These businesses are:
• needed in the area where you live
10) The desire to make and customize • based on available resources in the area
a) Consumers want to control goods,
services and adventures.

7
 Be Creative: Business Ideas and Models

Three ways to learn about regional business

opportunities are: • the town hall
1) Touring New Brunswick • the tourist areas
2) Visiting businesses and business sites • the town centre
3) Researching online • the local economic development office
• the industrial parks and areas
1) Touring New Brunswick
New Brunswick is a relatively small province.
You can travel around the province in a few
days by car, by bus, by train, by airplane and
in some places by boat. Guide 1 provides
useful background information about the
geography, the transportation links and the
communities, as well as the business sectors
in the province.

In order to identify real business

opportunities you will want to tour New
Brunswick’s cities, towns and countryside. It
will be useful for you to organise your tour so
that you can spend enough time to carefully
assess what you are seeing. 2) Visiting New Brunswick businesses
and sites
When you arrive in a village, town or city that
The New Brunswick economy and business
interests you, walk around instead of driving
sectors are described in Guide 1. This
so that you can appreciate the sounds, smells
information is very useful, but it is hard
and feel of the location. Ask yourself:
to understand fully without seeing some
• What goods or services are not in the
businesses first-hand, in person. With
area?
advance planning you can arrange to visit
• Are these goods or services available in
many New Brunswick businesses and plan
other regions of the province? Why or
for site visits in specific areas of the province.
why not?
These are generally arranged through
• Could I use my skills, training, education
Business New Brunswick or the Population
or experience to start a business here?
Growth Division.
• How can I learn if there is a market for my
goods or services?
To help you identify business opportunities,
• Are there important business sectors
start a list of the types of business or
here for my goods or services?
business regions that you want to visit. To
• Could I add value to any local goods or
create this list, ask yourself the following
services?
questions:
As you tour the communities and rural
• Am I interested in a particular sector
areas, look for surprises or the things that
such as mining, agriculture or forestry?
you find unexpected and cannot explain.
Where are the best locations to see this
These interesting surprises are a great source
industry?
of ideas about a new culture and are an
• Am I interested in food service,
opportunity to talk with local people when
accommodations or retail sales? What
you ask for an explanation. Take many notes
franchises or businesses would I like to
about the locations that you visit. Always
see?
visit:

8
 Be Creative: Business Ideas and Models

• Am I interested in providing a service • The Enterprise Network

or goods to the general population? Or [Link]
would I prefer a business that sells to has links to Enterprise websites for every
other businesses? region of the province
• Do I have a particular skill, training, • Industry Canada [Link]
educational background or experience has a link for Key Small Business Statistics
related to a product or service in this with current research results and
province? Where? information

When you participate in a site visit, Importing and Exporting

find out: Another good way to develop business
• how to become a supplier to any sector ideas is to consider importing or exporting.
that interests you Immigrant entrepreneurs often start
• what the prospects are for growth in this businesses based on experience with
sector markets in another country. You may be
• who the competitors are familiar with products or services in your
• if there is an interest in your particular home country that are not available in New
goods or services Brunswick. Similarly, you may see resources
• what business opportunities exist in the as you are touring the province that you
area know would sell in another country. It makes
sense to start a business offering goods or
3) Researching online
services that you know well.
Good business research can start on your
computer. When you are looking for a
Following are 4 questions to help you
business idea, much research information
think about import and export business
can be found by using the Internet. All
opportunities in New Brunswick.
locations in New Brunswick have Internet
1) What products or services from other
service and most are served by high speed
countries are not currently available in
connections. Try searching for business ideas
New Brunswick?
and opportunities using key words, business
2) What products or services from other
names or types and locations. This guide lists
countries have competitive advantages
many useful websites that you should also
over those currently available in New
visit to learn about business opportunities in
Brunswick?
New Brunswick.
3) What New Brunswick products or
services are not currently available in
Following is a list of additional websites
another country or countries?
that can help you to better understand New
4) What New Brunswick products or
Brunswick. They can be excellent sources of
services have competitive advantages
ideas for a business that you would like to
over those currently available in other
own.
countries?
• Government of New Brunswick (GNB)
Site - NB Business Climate
As you read the following sections about
[Link]/0398
importing and exporting, remember to write
gives community overviews, economic
down business ideas to consider.
conditions, industry profiles
• GNB Site - NB Economics [Link] Importing
gives population statistics
• Canada Business 1) Imported products or services not currently
[Link] has a link for available in New Brunswick
information on New Brunswick You have expert experience and
knowledge about one or more
countries other than Canada.

9
 Be Creative: Business Ideas and Models

• Is the selection better?

This is an advantage over many business • Are these goods or services suited
people in New Brunswick. You can to the climate and lifestyle in New
see what products or services are Brunswick?
not available here. To help you think • Have these goods or services been
about the potential for importing these tried in this market in recent years?
products or services ask yourself: • What market research would help me
• Are these goods or services suited understand the consumer interest in
to the climate and lifestyle in New these new products or services?
Brunswick? • What marketing efforts would
• Could these goods or services be be required for New Brunswick
imported at a competitive price? consumers to choose this new
• How much marketing would alternative?
be required for New Brunswick • How much of the market could I
consumers to choose this new expect to obtain?
product or service? • Could I extend my market into other
• What size of market could I expect? provinces or the United States?
• Could I extend my market into other • What do I need to know about
provinces or the United States? importing to decide if this is a good
• What do I need to learn about idea?
importing to help me decide if this is
a good idea? Exporting
1) New Brunswick products or services not
2) Imported products or services which currently available in another country or
have competitive advantages over those countries.
currently available in New Brunswick.
You are very knowledgeable about one
You may know about products or or more countries other than Canada.
services which are much better in other This gives you an advantage over most
countries. Because “better” expresses New Brunswickers.
an opinion, you will need to carefully
study the market preferences in New You can see which of the products or
Brunswick. To help you think about the services from the province might not be
potential for importing these products or available elsewhere. To help you think
services ask yourself: about the potential for exporting these
• What are the competitive advantages products or services ask yourself:
of the products or services that I am • Could these goods or services be
considering? exported easily to other countries?
• Are the prices better? • How would I need to improve or
• Is the quality better for New change these products or services to
Brunswickers? meet the new market requirements?
• Could these goods or services be
offered at a competitive price?
• What size market could I expect?
• What amount of marketing would
I need to penetrate these new
markets?
• What do I need to learn about
exporting to decide if this is a good
business idea?

10
 Be Creative: Business Ideas and Models

There are many non-governmental organizations

2) New Brunswick products or services and businesses that can be very useful as you
with competitive advantages over ones develop importing and exporting business
currently available in another country or ideas. For example, you can consult websites for
countries. private customs brokers, shipping companies and
international wholesalers. As well, there are several
You may have discovered New Brunswick government agencies or departments that provide
products or services that are much better information related to importing and exporting. You
than those available in other countries. will find useful information at the following websites:
Because ‘better’ is an opinion, you will
need to carefully study your target  usiness New Brunswick, Export
B
market’s preferences. Development Branch: [Link]/0398
Canada Business: [Link]
To help you think about the potential for Industry Canada: [Link]
exporting these products or services ask Canada Border Services Agency:
yourself: [Link]
• Could these goods or services be
exported easily to other countries?
• What are the competitive advantages
of the products or services that I am
considering?
• Are the prices better?
• Is the quality better?
• Is the selection better?
• What size market could I expect?
• How much marketing effort would I
need to penetrate these new markets?
• How would I need to improve or
• change these products or services to
meet the new market requirements?
• What do I need to learn about
exporting to decide if this is a good
business idea?

11
 Be Creative: Business Ideas and Models

This is the end of Part 1 and the suggestions for

creating good business ideas. At this point, you
should have a long list of possible business ideas
related to the topics in this section. Now it is time
to review your list and to choose the 2 or 3 best
business opportunities for the business you would
like to own in New Brunswick. Remember, for you to
succeed with a good business idea you must have:
1) interest and knowledge in the area
2) a consumer market
3) the potential for profit

Next, Part 2 of this guide describes the legal forms of

business in New Brunswick and gives details about
the 3 main business models: existing businesses,
franchises and new businesses. Remember your
business ideas as you consider the possible business
models in the next section.

12
 Be Creative: Business Ideas and Models

PART 2:
BUSINESS MODELS
Before you choose a business to own in New
Brunswick, you need to understand the legal Before you choose, talk to a lawyer who can
business forms and models. Part 2 of this guide clearly explain Canadian business laws to you.
describes the business forms then explains Also talk to an accountant who can explain the
the business models that you can choose. business taxes you will pay.
The following information will help you to
understand the best choice for you as you begin The following information outlines the 4 basic
your business in the province. business forms. For more detailed information,
consult a lawyer who is an expert in your
business area.
Chapter 2 - Understanding
Forms of Business Sole Proprietorship
• simplest business form
Are you planning to buy a business alone or will
• one person owns the whole business
you have a partner? Should you incorporate?
with no partners
Do you want to own a franchise or make a new
• no legal difference between you and the
business from your own ideas? Often immigrant
business
entrepreneurs want to buy an existing business
• all business earnings are taxed as
or a franchise. These models appear easier than
personal income
making all the decisions involved in starting
• owner is responsible for all of the debts
a new business. Some businesses are even
and legal liability
advertised as a ‘turn-key operation’ where the
• business license comes from the
new owner only needs to unlock the door to
provincial government
start operating a business. But every business
• business name, if not the same as your
model has strengths and weaknesses. The
name, is registered with Service New
information about business forms and models in
Brunswick ([Link])
this section can help you to make an informed
decision about your own business.

LEGAL FORMS OF BUSINESS

There are 4 legal forms of business in Canada.
This is true for buying an existing business or
starting a new business. Your business can be
large or small and sell a product or a service, but
it must be one of the following:
1. sole proprietorship
2. partnership
3. incorporated company
4. cooperative

What type of business is correct for you? Your

choice depends on the number of people in your
business, your product or service, your finances,
the taxes and the legal concerns.

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 Be Creative: Business Ideas and Models

Partnership 1. goals
• two or more people own the business 2. work ethic
• partner may work in the business or be a 3. personal values
‘silent’ investor 4. financial situation
• each partner is legally responsible for all
partners’ decisions You should also ask about any past experience
• lawyer can recommend a Limited or a and skills or knowledge related to your business
General partnership sector.
• a written legal agreement must be
signed by all partners Clear Communication
• agreement states how partners work, Clear communication is the key to a
make decisions and share profit successful partnership. Do not assume that
• agreement states amount of investment your partner thinks like you, especially if
by each partner and how much of the you have different cultural backgrounds. In
business each partner owns (the share Canadian business you need to explain your
size) meaning clearly in writing and verbally.
• income tax and legal liability are based
on share size Partnership Agreements
There are legal requirements for partnerships
Incorporated Company (Corporation)
in Canada. The following six points of
• one or more business owners legally information must be included in a Canadian
incorporate the business partnership agreement.
• owners are called shareholders
• a separate legal entity, like a person 1. The amount and form of each partner’s
• taxes are separate from the owner’s investment
personal taxes Partners can invest equal amounts in a
• advantages for business taxes and legal business or the amounts can be different.
liability The amounts can be cash only or they can
• more expensive to start and has more include physical assets such as equipment,
annual costs inventory or buildings. A partner’s
Co-operatives investment can also include a person’s
specialized expertise, unique recipes or
• owners are members and share resources
other knowledge-based investments, known
to provide goods and services
as intangible assets. You should hire an
• business organized and controlled by the
independent expert to assess the current
members
value of all assets before you finalize the
• democratic business model where one
agreement.
member has one vote
• business pays dividends to members
2. How profits will be shared
• voluntary membership
Profits can be shared in many different
ways, based on what the partners want. For
PARTNERSHIPS
example, profits can be shared according to
Instead of being a sole proprietor, some the amount of each partner’s investment.
entrepreneurs prefer to form a partnership to Or a profit sharing formula can include the
buy an existing business, to purchase a franchise, amount of work that will be provided by each
or to start a new business. Partnerships can be partner. You need to state exactly how profits
complicated, especially if the two partners are will be shared in the partnership agreement.
not from the same culture. A business may have
two partners or more, but all partners need to
know each other’s:

14
 Be Creative: Business Ideas and Models

3. How profits will be distributed or These decisions can be about :

received from the business • what products or services to offer
Keeping a sufficient amount of cash in the • where to buy products or services
business is always important. The partnership • the amount of money to pay employees
agreement should outline a plan for paying • what hours the business is open
shares while maintaining a good cash • how to display goods for sale
balance. A partnership agreement might • what type of advertising to buy
state the following:
a) the percentage of profit that must remain Partner is not active in the business
in the business When you are not active in the daily business
b) the salary to be paid for work performed you still participate in major decisions.
in the business These decisions are less frequent but more
c) the dates when money can be taken out important and usually involve spending
by partners larger amounts of money. Some examples
are:
4. How decisions will be made • Renovations to business premises
Partners sometimes disagree when making • Hiring key employees
decisions about the business. For example, • Investing in equipment
some partners may want profits immediately.
Other partners may want to wait for the The amount of involvement that you
business to grow before receiving profits. have in decisions should be stated in your
Partners may disagree with each other about: partnership agreement.
a) buying new equipment
b) offering new services or products 6. How a partner can leave the
c) hiring more employees partnership
The partnership agreement should describe
The partnership agreement must state the process to end the partnership. Over
exactly how decisions will be made. Two time, the value of each partner’s interest in
common decision-making methods are: the business changes as the business value
a) consensus where all partners must agree changes. The following items all can affect
on decisions the value that the partner should receive for
b) majority where all partners vote and his or her share.
majority rules a) original investment
b) amount of work
The money invested, the time worked and c) amount of money previously received
the responsibilities accepted can all help to d) profits of the business operated by the
decide how much power each partner has in partnership
the decision making process.
The partnership agreement should discuss
5. The partners’ responsibilities for the these issues, as well as how the partner will
daily operations be paid for his or her share.
When entering into a partnership you may
choose to actively work in the business or
you can simply invest and not make the daily
decisions.
Partner is active in the business
When you are active in the business you
participate in the daily decisions related to
operating the business.

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 Be Creative: Business Ideas and Models

Advantages & Disadvantages of

Partnerships
Advantages
• Partners can bring assets such as money
or equipment.
• Partners can share ideas and share
the work.
• Partners can bring different skills
or knowledge.
• Partners can share the losses as well
as the income.

Disadvantages
• You do not control all of the decisions.
• You may be liable for business decisions
your partner makes.
• You will have to share the profit.
• You may not like the way work,
responsibilities and profits are shared.

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 Be Creative: Business Ideas and Models

Chapter 3 -
The Business Models
There are 3 main business models to choose from
when you start a business in New Brunswick. You Tip
can buy an existing business, buy a franchise, or Convenience stores are one of
start a new business. Each model offers exciting
possibilities. You need to examine the choices
the easiest businesses to buy
and decide which model will best suit your plans but the value is very hard to
and needs. The following information will help evaluate. Hire professionals to
you to understand the nature, requirements, help you.
advantages and disadvantages of each business This tip is given by immigrant
model in New Brunswick. entrepreneurs in New Brunswick.

Communicating Clearly
MODEL 1 : BUYING AN EXISTING BUSINESS Clear communication is the key to success.
One way to enter business in New Brunswick Do not assume that your business associates,
is to buy an existing business. First, you need suppliers, employees and customers think
to find a business that you like. Be prepared like you, especially if you have different
to spend some time learning about the local cultural backgrounds. In Canadian business
community and the business environment. New you need to explain your meaning clearly in
Brunswick has many private owner-managed writing and verbally.
businesses. Often the owners do not have
children or employees who are interested in Finding a Business
buying the business when they are ready to sell
Following are 3 steps to help you find a
and will seriously consider an outside buyer.
business to buy in New Brunswick. Think
This situation provides an excellent opportunity
about the personal strengths and business
for immigrants to buy an existing profitable
opportunities that you identified in Part 1.
business.
1. Consider business sectors that match
Before deciding to buy a business, you need to
your ability as an entrepreneur.
know the fair market price. Naturally, the seller
• Do you have experience with this
will ask for the highest price he or she thinks the
type of business?
business is worth. Sometimes sellers think that
• Will your personal skills, knowledge
immigrants do not know local business values
and attitudes help you to run this
and will pay more than the market price. Do
type of business?
not accept the seller’s price without doing your
• Are your hobbies or favourite
own research. Find out what similar businesses
activities related to this type of
in the area have sold for in recent years and
business?
what existing businesses are worth in today’s
• Look for business sectors and
marketplace. Expect your real estate agent or
locations that are strong and have
business broker to show you the real value of
potential for continued strength.
similar businesses and ask for all information in
• Do local businesses and major
writing. In North American business, there is a
employers look strong and
common expression that sums up the approach
prosperous?
to business: “Let the buyer beware”.

17
 Be Creative: Business Ideas and Models

• Are housing prices increasing or Ask the vendor the following questions
decreasing in this location? about the business finances, marketing,
• Is the market size big enough for this management, human resources, assets and
business to grow? liabilities. Then check the information with
• Does the business sector have too your experts to ensure that the numbers are
much competition? logical and credible.
• Does this sector have enough
suppliers and customers?

2. Use many different sources to find Tip

businesses that are for sale. Find out the reputation of the
• Ask local accounting firms if any business owner before you buy.
clients want to sell their businesses. This tip is given by immigrant
• Speak with local bankers who may entrepreneurs in New Brunswick.
know of businesses for sale.
• Read the Business for Sale section in
local newspapers. Finances:
• Contact business brokers and It is very important to obtain financial advice
real estate agents who represent from independent real estate appraisers,
businesses for sale. professional accountants and business
brokers. By using more than one professional
you have a better chance of getting the best
Tip value for your money.
Use a commercial broker or • What is the total investment for purchase
realtor to help you find a and improvements to the business?
business to buy. • What is the company’s financial record
This tip is given by immigrant for recent years?
entrepreneurs in New Brunswick. • Are the financial records accurate and
trustworthy?
3. Visit businesses in the sector that • What is the profit margin to make the
interests you. products or provide the services at
• For example, if you want to buy today’s costs?
a hotel, ask hotel owners and • What expenses will change if you buy
managers about businesses for sale the business?
in your desired location. • What taxes will you pay to buy and
• Personally contact the owners of operate the business?
businesses that you find interesting.
Marketing:
Analysing the Business • Is the customer or client base big
After you find a business you like, the enough for the business to be profitable?
next step is to analyse its strengths and • Is the business location good?
weaknesses. Remember that professional • Is the current marketing effective? How
advice from experts such as a trustworthy much will new marketing cost?
lawyer and accountant can help you to make • Can you improve the advertising or
good decisions and save you money in the promotions to increase business?
long term. Your real estate agent and the • Are customers loyal to the business?
local Enterprise agency should also provide How will a different owner affect
you with reliable information on local customer loyalty?
business markets and values. • Is there competition from other
businesses? What is the competitive
advantage of this business?

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 Be Creative: Business Ideas and Models

• Will the location be good in the Business Assets:

future? For example, if a new road • What assets are included in the
is built in the future it could take purchase price?
customers away from your location. • Are major assets, such as the building
• Will the municipal by-laws permit and equipment, in good condition
this type of business in this location and is the price reasonable in the
in the long term? local market?
• Is the inventory worth what you will
Management: pay for it?
• Will the management team stay? If • Are accounts receivable amounts
not, can you hire people with the accurate and honest?
necessary skills?
• Do you have the skills needed to Business Liabilities:
manage the business? If not, can you • Do you know all the liabilities of
learn the skills quickly? the business, such as any liens,
• What management improvements mortgages and outstanding debts?
can increase efficiency?
Agreeing to Purchase
Human Resources: The final step in buying an existing business
Often the people who work in a business is a legal agreement to purchase. The buyer
are one of its major assets. They know the and the vendor will negotiate the terms of
business and have existing relationships the purchase and sale agreement. But the
with customers. It is important to enquire two sides usually have different preferences
about the reliability of the existing staff and tax positions, so it is wise to hire reliable
when you consider buying a business. specialists who know Canadian business
Most theft in retail operations is by the practices. An accountant, a tax practitioner,
store employees and sometimes the an appraiser and a lawyer can all contribute
seller has not recognized the problem. valuable advice.
Examine the human resources carefully
and be aware of the need for internal Vendor Continuing to Work
business controls. Ask the following: in the Business:
• What key employees help make the In certain cases, the vendor can become a
business successful? mentor for a new business owner.
• Will the key employees stay after you The previous owner may agree to continue
buy the business? working for a short while, sometimes up to
• Is the existing staff reliable? Has one year, helping the owner become familiar
the business lost money to theft with and operate the business. The previous
recently? owner can help the new owner to adjust
• Will your language skills cause to the staff, suppliers and customers. This
a communication problem with special mentoring situation is not always
current employees? possible, but it can be a good idea to ask the
• Are there other people you could vendor as a formal part of the negotiations.
hire in the local area? A vendor who agrees to stay will expect to
• Will human resource costs increase be paid a salary while still working.
after you purchase the business?
• Do you understand employee Assets vs. Entire Business:
expectations regarding hours of When buying an existing business you can:
work and benefits? • buy the entire business so that you own
• Do you know all the costs related the name, the assets and all the liabilities.
to having employees in New • buy only the assets that you want.
Brunswick?

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 Be Creative: Business Ideas and Models

Deciding whether to buy only some assets all of the debts and to understand exactly
or all the assets requires a careful analysis of what a business owes. This work, sometimes
all the factors involved. You need to know called due diligence, is generally performed
exactly what you will receive and what it is by a lawyer along with your professional
worth. Many assets are very specialized and accountant.
their value can be difficult to assess.

Goodwill
Goodwill is one of the common assets
Tip
that may or may not retain value when Look for a lawyer and an
the ownership changes. Goodwill can be accountant who have
the result of the owner, the location, the experience with immigrants.
product or service, or a combination of all This tip is given by immigrant
these factors. Evaluating goodwill is best left entrepreneurs in New Brunswick.
to your professional accountant. There are
many ways of calculating this value and also
Preferred Arrangements
of structuring the payment for this asset.
Another issue to consider when buying a
business is the possibility of special deals
under the current ownership. There may be
preferred arrangements with certain
customers and suppliers. The impact of these
special arrangements needs to be quantified
as a money value and their impact on
new owners properly determined. It is
strongly recommended that you rely on the
judgement of your professional advisors such
as lawyers, tax specialists and appraisers. It
is important to inform them fully of your
negotiating points and concerns. Do not,
under any circumstances, rely on the advice
of people who represent the vendor.
Income Tax Position Before you sign an agreement you need to
The different income tax positions of the know:
vendor and yourself may also impact your • the current value of the assets.
professional accountant’s advice. When you • the effect on your income tax of
buy only the assets of a business, the vendor buying the assets compared to
pays more income tax than if he or she sold buying the entire business.
the entire business. • the legal responsibilities you accept
when buying a business.
For that reason, most vendors prefer to sell • the best business model for you to
all of the business. The tax situation is often operate the business.
the opposite for purchasers who generally
have a better tax position if they buy only the
assets.

Debts
It is important to realize that when you
purchase a business you also purchase all
of its debts. It can be difficult to establish

20
 Be Creative: Business Ideas and Models

Advantages and Disadvantages of Buying 1. Do I have the necessary capital for the
an Existing Business investment?
Advantages: 2. Do I fully understand the work involved
• no need to develop a new business idea in operating this franchise?
• no need to find the building, equipment 3. Do I or my partners have the education,
and other assets required to operate the experience, attitudes and skills required
business to succeed?
• you can start operating the business
immediately after purchase Communicating Clearly
• few immediate operating decisions to Clear communication is the key to success.
make while learning the local business Do not assume that your business associates,
culture suppliers, employees and customers think
like you, especially if you have different
Disadvantages: cultural backgrounds. In Canadian business
• often more expensive to buy an existing you need to explain your meaning clearly in
business than to start the same business writing and verbally.
• you may not like some decisions made by
the previous owner Deciding on a Franchise
• you must build new relationships with When you buy a franchise you become a
customers, employees and suppliers franchisee. You will pay the franchisor (the
• you must learn the business quickly to company that owns the original business)
start operating immediately a franchise fee to purchase the franchise.
• you must rely on employees who know What you receive depends on the franchise
more about the business agreement but could include:
• you will find surprises, both good and • the use of a business name
bad • signage and other promotional material
• staff uniforms
MODEL 2 : BUYING A FRANCHISE • recipes, processes and methods
A second way of entering business in New • equipment, blueprints, start-up manuals
Brunswick is to buy a franchise. When you buy • training and training manuals
a franchise you are buying the right to copy an
existing business in a new location or locations. Franchise agreements generally state that
Examples of well known franchises are: you must operate your business as described
• Hilton hotels in the contract. For example you usually
• McDonald’s restaurants cannot change the business’ appearance
• Tim Horton’s coffee shops without permission.

Franchises are generally considered to be an Most often you will continue to pay fees
easy way to enter business because you buy to the franchisor for various services and
both the name and the business practices. There products as long as you are a franchisee.
are many opportunities available for franchised You may also need to pay the franchisor a
businesses. Each franchised business has its own percentage of your profits that is called a
method of selling its franchises. It is important to royalty payment.
understand and to carefully consider all the facts
related to a franchise opportunity. If you want to buy a franchise you should
consider a few key questions:
Before you consider buying a franchise, think • What type of business would I like to
about the following 3 questions: have?
• What type of business is succeeding right
now?

21
 Be Creative: Business Ideas and Models

• Will this type of business have continued 1. the franchise offer

success? 2. the costs compared to the expected
• What franchises suit my answers to the return
first three questions? 3. the franchisor support
4. the value of the brand
If you are still interested in a franchise and 5. the contract requirements
willing to accept the limitations of a franchise
system, then you should consider: 1. Understanding the Franchised Offer
• Attending franchise trade shows A franchisor’s offer generally includes a
• Reading franchise journals description of the brand you are buying, the
• Working at a franchise that interests you products and services you will receive, the
• Checking the classified ads in the way the business operates and the support
newspapers for business opportunities you will receive at the start and in future.
The offer also details the purchase costs
For more information contact the Canadian and the royalties you will pay. You can find
Franchise Association (CFA) at this general information from franchisor
1-800-665-4232 or [Link]. The CFA websites, franchise trade shows, specialty
represents over 350 franchise businesses that magazines and the Canadian Franchise
follow the Association‘s code of ethics. Associations at [Link].
Purchasing a franchise can be very expensive
Two very important areas to consider
but can offer excellent value because of
before buying a franchise are:
the expected return on your investment.
Location and Sales Territory
A franchise has to be carefully considered
Personal Suitability
before buying. Research the franchisor in
detail, including the financial state of the
Location and Sales Territory
parent company and the success enjoyed by
When evaluating the location or sales
other franchisees. Franchise agreements are
territory of a franchise you need to know:
generally very complicated. It is necessary
to have the help of your own lawyer and
• a clear definition of your franchise
professional accountant if you are thinking
territory. Is it exclusive? For what amount
about buying a franchise.
of time?
• market information and statistics that

Tip support the franchisor’s estimated sales

potential for the territory.
You may need to prepare a • reliable information that shows the future
presentation to prove you can growth potential for your territory.
• who your competition is in the area.
succeed as a franchisee. • the franchisor’s standards for the location
This tip is given by immigrant
entrepreneurs in New Brunswick.
and the premises.
• the terms for leasing or purchasing the
premises from the franchisor.
Choosing a Franchise
Personal Suitability
Franchises come in all price ranges. You
Before buying, you should also consider
can pay as little as $1,000 and as much as
whether the franchise you are considering is
$1,000,000 or more. Franchises are available
the best choice for you. Ask yourself:
in many different sectors and represent many
• Am I interested in this product or service?
different products and services. If you are
• Do I have experience, knowledge or skills
considering buying a franchise you will need
related to this franchise’s product or
to carefully evaluate the following:
service?

22
 Be Creative: Business Ideas and Models

• Do I have enough money to purchase When trying to determine the amount

and to operate the franchise? of return you will make on your initial
• Will there be cultural or language investment you will need to:
barriers with the organization I will • ask existing franchisees how well
be purchasing the franchise from? If their franchises are performing
so, how will I deal with them? • calculate the sales volume you can
expect for the first 3 to 5 years
2. The Costs Compared to the • estimate what you believe your total
Expected Return cost will be for selling the goods or
Some franchises cost very little to buy, but providing the services
you can make very little in profit in return. • obtain and analyse the financial
Other franchises appear to cost too much, statements of a similar franchise for
but they may make a lot of profit in return. the last 5 years
There is no fixed rule. You need to include all
of the costs and compare this amount to the You should hire a professional
profit expectations. If you evaluate several accountant to help you determine the
different franchises at the same time, the return on investment.
differences between them will be clearer.
It is customary for you and the franchisor
There are two types of costs: to each use your own accountants and
1. Initial or start-up costs lawyers in a negotiation. You should ask
2. Continuing or on-going costs your accountant to:
• evaluate the reliability of the financial
Initial or start-up costs information that you received from
The initial costs generally relate to: the franchisor
• purchasing the franchise • calculate costs for the next 3 years
• purchasing or constructing the premises based on reasonable assumptions
• purchasing any specialized equipment, • calculate your expected rate of return
materials, manuals, services or other on the franchise
items that are required in the start up
but not included in the purchase price 3. The Franchisor Support
The key to a successful franchise is a
Continuing or on-going costs successful franchisor. Different franchisors
The continuing costs can include the have different backgrounds, experience,
following: finances and business ethics. It is very
• lease payments or rent for the premises important to know the following facts about
• royalty fees, which are usually a the franchisor.
percentage (%) based on franchise • financial strength and profitability
earnings • number of years in the business
• charges paid to the franchisor for • relationship with other franchisees
marketing, including promotional • commitment to franchisee success
materials, a share of advertising costs
and new signage Ask the franchisor the following 6 key
• product development and intellectual questions:
property permission 1. How long has the franchisor been
• ingredients, uniforms and other supplies offering franchises?
2. Who is involved in the organization and
what are the backgrounds?
3. How many franchises are operating
successfully at this time?

23
 Be Creative: Business Ideas and Models

4. Have any franchises closed in the past 5. Is the franchisor available to franchisees
5 years? Is it possible to speak with and actively involved in the franchises?
them? What were the reasons that they 6. Does the franchisor provide local, on-
closed? going training for franchisees?
5. Are new locations being opened? How 7. Is it difficult to qualify to buy the
often? franchise or does the franchisor appear
6. Is it possible to meet with existing to accept anybody?
franchisees?
4. The Value of the Brand
Sometimes the best source of reliable Brand recognition is a key factor when
information is existing franchisees. You need choosing a franchise. For example, there
to visit several to make sure that you have are many restaurants that sell fast foods.
as much useful information as possible. The Some are well-known brands and others
franchisor should be able to give you a list of may be locally-owned with very little brand
franchisees in your area. recognition. When you pay for a franchise
you want to buy a brand that already has
Ask other franchisees the following key a lot of market recognition and a good
questions: reputation.
1. If you could start again, would you still
buy this franchise? Following are 7 key questions to ask yourself,
2. What was the total investment required your accountant, and other franchisees.
by the franchiser? 1. Is the brand well known? Look for
3. Were there any unexpected costs? market research to support the
4. Are you making as much profit as you franchisor’s claims.
expected? 2. Is there currently a good demand for this
5. What do you feel is the major weakness product or service?
of this franchise? 3. Are sales increasing or decreasing?
6. What is its major strength? 4. Is the product or service priced
7. Are you satisfied with the level of service competitively?
you receive from the franchisor? 5. Is the product protected by a patent,
8. Are you satisfied with the quality of the trademark, or copyright?
goods you purchase from the franchisor? 6. Is the product or service unique,
9. What kind of management and staff appealing and useful?
training was provided? 7. Can the franchisor guarantee a supply of
10. Are you happy with the marketing effort the raw materials or finished goods that
provided by the franchisor? can meet the market demand?
11. Do you receive helpful advice and
answers to questions promptly? 5. Reading the Contract
12. Have you had any major disagreements The franchise agreement is a business
with the franchisor? contract that defines the roles and
13. What have you done to make your responsibilities of the franchisee and the
franchise successful? franchisor. You, your lawyer and your
accountant should carefully review the
Ask yourself and your accountant the agreement. Following are some of the
following 7 key questions: questions that you need to consider
1. Is the franchise financially stable? carefully.
2. Is the franchise continuing to develop
new products and methods? 1. Are the rights and obligations of the
3. Are the franchises marketed well? franchisee and the franchisor clearly
4. Do franchisees meet together regularly? defined?

24
 Be Creative: Business Ideas and Models

2. Are the payments to the franchisor 15. If your franchise terminates, will you be
clearly specified? Payments can include: compensated for the goodwill you have
• a franchise fee built up in the business?
• royalty payments 16. Are you prevented from engaging in any
• marketing payments other business activity for the duration of
• fees for ongoing services the contract?
3. Does the contract state that you must 17. Does the contract prevent you from
buy supplies or merchandise every year? establishing, owning, or working in a
Is there a minimum amount? competing business for a certain number
4. Does the contract specify the type of years after termination of the
and size of operation you are expected to franchise?
operate?
5. Are the nature, duration, cost and extent Advantages and Disadvantages of Buying
of your training stated in the contract? a Franchise
6. Do you automatically have the right to Advantages
any franchisor innovations or do you • You can actually see the business
have to keep investing for operating in another location.
new advances? • You can visit to closely study the
7. Do you have to meet annual sales quotas strengths and the weaknesses of
to keep your franchise? the business.
8. Does the contract clearly include all the • Seeing a franchise allows you to evaluate
promises the franchisor made? your suitability for the type of business.
9. Can the contract be renewed or broken? • Most franchisors provide significant start-
If so, on what terms? up support which can mean:
10. Are you permitted or expected to a) a faster business start-up than starting
develop the territory by opening your own business
multiple locations? If so, how many and b) a reduced investment risk
how soon? c) fewer initial decisions to make on
11. Can you sell the franchise? Under what your own
conditions? d) help finding a good location for
12. Can you keep any profits made from the your outlet
sale of the franchise?
13. Can you terminate the contract • You may have excellent on-going
and is there a penalty cost for contract support from the franchisor on major
termination? issues related to:
14. When and how can the franchisor a) Marketing
terminate your franchise? b) Product/service development
c) Human resources
d) Pricing
e) Management
f ) Inventory control

• The franchisor may also provide

support through:
a) periodic newsletters
b) a toll-free telephone number
c) a website
d) scheduled workshops or seminars

25
 Be Creative: Business Ideas and Models

Disadvantages
• You usually need to pay a large fee for
the rights to a franchise.
• You cannot change certain aspects of
the business because of your contract
with the franchisor.
• You must rely on the franchisor for the
purchase of certain products or services.
• Your franchisor may not continue to
invest in and improve the brand.
• You may be required to expand your
franchise size or number of locations in
order to keep your franchise.
• You may disagree with the franchisor’s
future decisions regarding methods,
processes, raw materials, and other
concerns.

 anada Business provides excellent

C
information on buying a franchise.
Their website is [Link].

26
 Be Creative: Business Ideas and Models

MODEL 3 : STARTING A NEW BUSINESS The process of starting a new business can
A third way to enter business in New Brunswick take a month or it can take a year or more,
is to start a new business. Your new business depending on your business idea.
may be a sole proprietorship, a partnership or an
incorporated business. Starting a new business Deciding the Type of Business
of your own is certainly exciting. You will need to Each business sector has its risks, rewards
make many decisions, but you will be following and requirements. Starting a service business
your own dream. It is very different from buying usually requires less time than starting a retail
an existing business or a franchise where many operation. A manufacturing business may
decisions have already been made without your take a few years to start because of the time
input. required to obtain permits and to build and
equip the production facility.

Tip Your business could provide a service or

goods to individuals or to other businesses.
First go to your local Community
Following are some examples of business
Enterprise Development Agency. opportunities.
They will help you.
This tip is given by immigrant
entrepreneurs in New Brunswick.

Communicating Clearly
Clear communication is the key to success.
Do not assume that your business associates,
suppliers, employees and customers think
like you, especially if you have different
cultural backgrounds.

In Canadian business you need to explain

your meaning clearly in writing and verbally.

Choosing a Business Idea

To start a new business you first have to have
a good idea and a vision of what you want 1) Services for individuals:
to create. Part 1 of this guidebook gives • carpet and upholstery cleaning
you ways to create good business ideas. You • yard maintenance and snowplowing
should be prepared to take time to develop • food preparation and catering
the business idea that you choose. One • a restaurant
very important step before you decide on • hairstyling and esthetics
an idea is learning about the local business • language and tutoring
communities. • storage units
• taxi and limousine
You may also want to pay for professional • hotels, motels and other
services to help you find the best background accommodations
information. Advice from a lawyer and an
accountant can save you a lot of money and
prevent disappointment.

27
 Be Creative: Business Ideas and Models

2) Services for other businesses: Following the 10 Steps

• commercial cleaning To start a new business in New Brunswick,
• document management and you need to follow 10 basic steps. Use
shredding the chart below to make personal notes
• IT development and services about important information for each
• wholesaling or manufacturing step.
• construction or building site
preparation
• environmental studies and services
Tip
3) Retail businesses: It takes time to start a business.
• clothing store Allow more time than expected
• business supplies store
• grocery or convenience store to develop contacts and find
• service station information.
• building supplies store This tip is given by immigrant
• home goods store entrepreneurs in New Brunswick.

STEPS TO START YOUR BUSINESS NOTES, DATES & CONTACTS

1) Decide the type of business and study the

business sector.

2) Decide if your business will be a sole

proprietorship, partnership, incorporation or
cooperative.

3) Begin assembling the information you will require

to write your business plan.

4) Calculate the costs to start the business and to

operate it for at least one year.

5) Assess profitability, decide if you need financing.

6) Conduct preliminary market research.

7) Meet with counsellors who know the region and

discuss your business plan. Plan to meet with
them again.

8) Select an accountant and a lawyer and meet with

them to discuss your plan.

9) Choose and register your business name.

10) Learn what permits and licences you will require

and who issues them.

28
 Be Creative: Business Ideas and Models

1) Study the business sector. 4) Calculate the costs to start the

There are many ways to study a business business and to operate it for at least
sector. The most useful way is to visit one year.
businesses that are similar to the one you As soon as you choose an idea that you
are interested in starting. When you visit you really like, you need to research specific
should be carefully studying and noting: information about the cost of starting that
• the choice of location business. Divide your costs into one-time
• the products or services costs for goods and services you need to
• the pricing of the products or services start your business and operating costs that
• the main suppliers you will need to pay regularly to run the
• the organization of the premises business.
• the number of employees and how busy
they appear to be One-time costs can include:
• how the products and services are • legal fees to incorporate the
displayed or promoted business or to prepare a partnership
• what type of customer is entering and agreement
purchasing products or services • the cost for buying or constructing a
• the average size of purchases building and other site preparation
• how the service is delivered or the costs such as landscaping
product is sold • the cost of renovations, additions
and furnishings
Some good sources of information on • the cost of equipment, shelving and
specific sectors and businesses include: other specialized materials
a) Canada Business – New Brunswick: • the connection and set-up cost
1-888-576-4444 for services such as power, water,
[Link]/nb Internet and telephone
b) The Enterprise Network • the cost of licences, permits,
506-453-6141 registrations and inspections (some
[Link] of these will also be repeated annual
c) The Community Business Development costs)
Corporations • the cost of market research and
1-888-303-2232 designing promotional materials
[Link] • the purchase of initial inventory

2) Decide if your business will be a You will not know the exact final costs, so it
sole proprietorship, partnership, is important to try to list everything and to
corporation or cooperative. use higher rather than lower price amounts.
For detailed information on these 4 choices, The total amount of these one-time costs will
please review the first section of Part 2, Legal give you an estimated dollar figure for the
Forms of Businesses. cost to start your business. This total will help
you to determine if you have enough capital
3) Start writing your business plan. or if you need to borrow money to start your
For detailed information about how to business.
prepare your business plan, please refer
to Guide 3, Be Successful: Planning Your Operating costs can include:
Business. This guide helps you to evaluate • salaries and other employment costs
your business ideas and make them into an • rent, lease, heat, lights, telephone,
effective plan. Internet, insurance
• taxes for property, water and sewage
and income

29
 Be Creative: Business Ideas and Models

• loan interest and other banking you might face, the industry trends, and your
charges potential market share.
• supplies, maintenance and repairs
• annual permits and licenses Wait until you do your business plan to
• legal, accounting and taxation advice conduct detailed market research.

This second group of costs will help you First, ask yourself if the market will want
determine how much it will cost to operate your product or service. Then consult with
your business on a monthly and yearly basis. other people, such as a group of potential
customers or a business counsellor, to learn
what they think about offering your product
or service to your chosen market. You may
Tip want to ask yourself and others the following
questions:
It will take longer than
• Who will buy the product or service?
expected to open your business. • Where do the consumers live?
You need to plan a budget • What are their characteristics (age,
because no money will be gender, income)?
• Why would they buy your product or
coming in to the business before service?
the business is open. • How often would they buy it?
This tip is given by immigrant • Where would they buy it from? A
entrepreneurs in New Brunswick. store? A tradeshow? On the Internet?
• Do your buyers have preferences
regarding your product or service?
5) Assess profitability to decide if you • Will you be able to build customer
need financing and consider possible loyalty?
lenders. • What image do you want your
To assess profitability, compare the product or service to have?
operating costs to the expected income
from the sales of goods or services. You will Some useful market research information
have more accurate income figures after is available for free through the following
you conduct market research. But you can sources:
still estimate the number of units (goods
or services) you need to sell to equal the • Provincial financial statistics: New
operating costs. This is called the ‘break- Brunswick Department of Finance
even point’ because the expenses equal 506-453-2451,
the income. The break-even point tells you [Link]/finance
what business volume you must have to • Research strategy and statistics:
make a profit. The required business volume Canada Business – New Brunswick
compared to the expected volume shown 1-888-576-4444,
by market research will help you decide if [Link]/nb
you need financial help. If you need outside • Federal statistics:
financing, think about possible lenders. Statistics Canada
1-800-263-1136,
6) Conduct preliminary market research. [Link]
You need to know your customers and
competitors to estimate sales volume. Market
research will help you to learn about the
people you want to sell to, the competition

30
 Be Creative: Business Ideas and Models

7) Meet with counsellors who know the 9) Choose and register your business
region and discuss your business plan. name.
Plan to meet with business experts several When you know the type of business you
times for general advice and to ask specific want to start and have completed some
questions about your business plans. market research, it is a good idea to choose
Business counselling services are available a name for your business. In New Brunswick,
through: the business name usually describes the
a) Canada Business – New Brunswick products or services you will be offering.
1-888-576-4444, Generally the names should be easy to
[Link]/nb remember. It is not customary to use only the
b) The Enterprise Network owner’s name as the business name unless
506-453-6141 the person’s name is well-known in the
[Link] marketplace.
c) The Community Business Development
Corporations Registering Business Names
1-888-303-2232 You must register your business name (unless
[Link] it is your personal name) with Corporate
Registry. You can do this online at the Service
New Brunswick website [Link]. You
can also get forms from the website or your
local Service New Brunswick office and mail
your information to Corporate Registry. To
find a Service New Brunswick office near you,
visit [Link] or call 1-888-762-8600.

Name Searches
Before you can register your business, you
must conduct a name search to make sure
that no one else is using the same name.

You will receive assistance in this matter

through Service New Brunswick and the
Corporate Registry. The contact information
is listed above.
8) Select an accountant and a lawyer and
meet with them to discuss your plan. Registering a name takes only one day unless
Professional advice from a trustworthy the name you chose is already being used.
lawyer and accountant can help you to make Then you will need to select a different name
good decisions and save you money in the and continue checking.
future. It is best to make enquiries about
Once your business name is approved,
your professional advisors’ qualifications and
you can register your business. Corporate
experience. You also need to ensure that you
Registry will mail you a Certificate of
are comfortable communicating with them.
Registration. If you plan to have business
locations in a province or territory outside
The professionals that you choose should
New Brunswick, you must also register your
have an excellent reputation in the
business for that region.
community and be able to tell you about
the types of work they have performed for
other clients. See the Business Relationships
section of Guide 1 for further information.

31
 Be Creative: Business Ideas and Models

10) Permits and Licenses Advantages and Disadvantages of

Learn what permits and licences you will Starting a New Business
require and who issues them. Advantages
• the freedom to use your own ideas
Every type of business in New Brunswick has
• the freedom to be the boss
different legal requirements for permits and
• the freedom not to be fired
licences. You need to know what licenses
• the freedom to set your own salary
and permits your business must have
Disadvantages
early in your business planning. Contact
• long work hours, usually more than
the following organizations for more
when employed by others
information:
• risk of failure
• Canada Business – New Brunswick
• start-up is a lot of work
phone: 1-888-576-4444
• lack of experience in the business
website: [Link]/nb
(owner, employees, partners)
• Service New Brunswick (SNB) has
locations throughout the province.
To find the location nearest you,
telephone 1-888-762-8600,
or check the SNB website at
[Link]. Through BizPaL,
[Link]/bizpal, you can access
information on business permits and
licenses online.

• Your local municipal government

has contact information in the blue
pages of your phone book. Municipal
information is also available through
Canada Business – New Brunswick.

32
 Be Creative: Business Ideas and Models

CONCLUSION
By reading this guide, you learned how to
develop good business ideas and to choose one
for your business. You also learned about the
business types and models that you can use in
New Brunswick. It is time to start planning your
own business. A good business plan will help you
to identify the strong and weak points of your
business idea and make it a reality. Guide 3 will
help you to make a plan so you know what to
expect as you prepare to buy or start a business
and hire employees. You will need this plan to
start your business and will continue using it for
many years. Good luck as you plan your business
for success!

33
 Be Creative: Business Ideas and Models

ACKNOWLEDGEMENTS
Many provincial and federal government
websites and related business agencies provided
useful background information in creating Guide
2 - Be Creative: Business Ideas and Models. These
sources are mentioned throughout the guide
and websites are provided for further reading
and contact information. Special recognition is
due to Business New Brunswick for authorizing
use of their online information in preparation of
this guide.

Resource Websites:

Bank of Canada: Solutions New Brunswick:

[Link] [Link]

Invest NB: Statistics Canada:

[Link] [Link]

Canada Business NB:

[Link]/nb

Government of New Brunswick –

Communications New Brunswick:
[Link]/cnb

Community Business Development Corporations:

[Link]

Industry Canada:
[Link]

Government of New Brunswick –

Tourism and Parks:
[Link]/tourism

Government of New Brunswick –

Local Government:
[Link]/localgovernment

Enterprise Network:
[Link]

Government of New Brunswick –

Population Growth Division:
[Link]/population

34
Notes
 Be Creative in New Brunswick
Find out more about starting a business, visit [Link]/immigration