Challenges your small business can face in Toronto
With a population of nearly five and a half million people, Toronto is easily the most populated city in the country. And it’s growing rapidly. Its population is expected to increase by 49.6 percent by 2046. There are many reasons why newcomers come to Toronto, including the diversity of businesses and job opportunities.
While there are several advantages to running a business in Toronto because of these factors, there are also several challenges. As a small business owner, you need to be proactive and stay ahead of them to stay profitable.
#1 Skyrocketing Rent
Several iconic businesses that have served the community for decades have recently closed because of the skyrocketing rent prices in the city. As a business owner, it’s important to be shrewd when in such a situation. If the numbers don’t add up, then it’s better to relocate if financially feasible.
Many business owners consider buying property for their enterprises. Business property can be a good investment as it will help you build equity. Moreover, you have greater freedom to modify the property to suit your business.
However, buying property can limit cash flow and working capital. Putting up a home as a guarantee can affect your family if the business is forced to close. As a renter, you also have more flexibility to move your business.
Weigh your financial statements carefully when deciding to buy or rent. Your balance sheet will look better if you own your property. On the other hand, your business’s credit will plummet if you default on the mortgage because of high operating costs.
Carefully consider the location of your business. Many businesses in the downtown district of the city have reported a sizable drop in revenue after their streets were turned into no-parking zones. Good foot traffic alone may not be enough if your street doesn’t have on-street parking or a parking lot close by.
Likewise, be wary of the competition. For example, if you’re opening a Chinese restaurant on a street with a dozen other Chinese restaurants, then your eatery will find it difficult to survive.
#3 Rules and Regulations
It’s important to understand local rules before starting a business in Toronto. For example, your new restaurant’s patio may be affected by the city’s Noise Bylaw, which includes decibel limits and time restrictions. Fortunately, there are many resources where you can get free advice and information on government regulations.
#4 Financing Limitations
Many small businesses close in Toronto because they lack the funds to cover their operational costs. With so much competition, it can be difficult to get financing for a new business, especially when conventional options such as large banks place so many hurdles.
Thankfully, it’s possible to get small business loans in Toronto from reputable and transparent alternative funders that offer flexible, easy, fast, and local options without demanding guarantees. Like everything else in the city, sometimes you need to think outside the box to succeed as a business.
These are some of the unique challenges your small business can face in the city. Although it’s easy to feel overwhelmed, with a little preparedness and a lot of hard work, your enterprise can be a success story.