Leah and Dev have a good idea: fix bikes for students and neighbours, and refurbish old bikes for resale. Their market research says people want it. But an idea does not fix a flat tire. Before Spoke & Wrench can open, they need a place to work, tools, money, people, permission and protection if something goes wrong. The resource section of a venture plan answers one practical question: what, exactly, does this business need to operate legally and safely on day one? Lenders and investors read this section closely, because a plan that forgets a key resource usually runs out of money.
Land, Buildings, Capital, Equipment and Services
- Land and buildings: the physical space. Spoke & Wrench uses Dev's family garage for free and rents a farmers' market stall on Saturdays for $40 a day. A bigger business might lease a storefront or buy a building.
- Capital: the money needed to start and to keep running until sales cover costs. Leah and Dev put in $2,000 of their own savings.
- Equipment: the long-lasting tools and machines used to produce the product or service, such as a repair stand, wrenches and a truing stand for wheels.
- Services: things the business pays others to do, such as a phone plan, website hosting, an accountant to check the books, or insurance.
| Resource | Type | Hypothetical cost |
|---|---|---|
| Repair stand | Equipment | $250 |
| Professional tool kit | Equipment | $400 |
| Wheel-truing stand | Equipment | $150 |
| Floor pump | Equipment | $60 |
| Parts washer | Equipment | $140 |
| Starting stock of parts (tubes, cables, brake pads) | Supplies | $500 |
| Liability insurance, first year | Service | $450 |
| Flyers and a banner | Service | $100 |
| Total | $2,050 |
Insurance and Legal Requirements
Insurance turns a large, unpredictable loss into a small, predictable cost (the premium). A business chooses coverage by asking, "What could go wrong, and could we afford to pay for it ourselves?" Four common types are worth knowing.
| Type of insurance | What it covers | Spoke & Wrench example |
|---|---|---|
| General liability | Injury to other people or damage to their property caused by the business's operations | A customer trips over a tire in the garage and breaks a wrist |
| Property | Damage to or theft of the business's own equipment, stock and building | The tool kit and parts are stolen from the market stall |
| Product liability | Harm caused by a product the business made, sold or repaired | A refurbished bike's brakes fail and the rider is hurt |
| Business interruption | Lost income while the business cannot operate after an insured event | A fire closes the garage for two months |
- Business name registration: in Ontario, a sole proprietorship or partnership that operates under any name other than the owners' own legal names must register that name with the province. "Spoke & Wrench" is not Leah's or Dev's name, so they must register it.
- Municipal business licence: many cities and towns require licences for certain kinds of businesses. The rules differ from one municipality to the next, so the owners check with their own city hall.
- Permits: a farmers' market stall, a sign on a building, or a renovation may each need a permit or the organizer's written approval.
- HST registration: a business whose taxable sales are $30,000 or less over four consecutive calendar quarters is a small supplier and does not have to register for HST. Once sales exceed $30,000, it must register, then charge 13% HST in Ontario and send it to the government.
- Food-handling rules: a venture that sells food (a bake sale, a smoothie stand) must follow public-health food-safety rules. Spoke & Wrench sells no food, so these do not apply to it.
- Principal's approval: any venture that runs on school property, uses school equipment, or advertises in school announcements needs the principal's approval first.
Rules change, so check the source
Licence requirements and fees change and vary by city. In a real venture plan, name the government office you checked with and the date you checked. A plan that says "we confirmed with the city's licensing office" is far more convincing than one that guesses.
Human Resource Needs
Every task in the business needs a person. Start by listing the tasks (repairs, buying parts, social media, bookkeeping, serving customers), then decide who does each one: the owners, a partner who shares ownership, paid employees, or volunteers. Volunteers usually fit only a charity or non-profit event. A for-profit business that has people do real work should expect to pay them under Ontario's employment standards. For every paid role, write a job description: the job title, duties, skills required, hours and pay. It helps you hire the right person and tells that person exactly what is expected.
Sample job description
Job title: Part-time Bike Mechanic. Duties: perform tune-ups and flat repairs, safety-check refurbished bikes, keep the work area tidy. Skills: basic bike repair, careful attention to detail, friendly with customers. Hours: Saturdays, 9 a.m. to 3 p.m., April to September. Pay: $19 per hour. Reports to: the owners.
Choosing a Form of Ownership
| Form | Liability | Control and profit | Cost and ease | Continuity | Taxation |
|---|---|---|---|---|---|
| Sole proprietorship | Unlimited: the owner's personal assets can be taken to pay business debts | One owner makes every decision and keeps all profit | Cheapest and easiest | Ends when the owner stops | Profit is taxed as the owner's personal income |
| Partnership | Unlimited for general partners, who are each responsible for the others' business decisions | Shared, according to a partnership agreement | Cheap and easy | Can end when a partner leaves | Each partner pays personal tax on their share |
| Corporation | Limited: shareholders can lose only what they invested | Shareholders elect a board of directors; profit paid as dividends | Costly, with more paperwork | Continues as a separate legal entity | The corporation files its own tax return |
| Co-operative | Limited for members | One member, one vote; surplus shared among members | Moderate | Continues as members change | Taxed as a corporation, with special rules for member refunds |
| Franchise | Depends on the legal form the franchisee chooses | The franchisor sets many rules; the franchisee keeps profit after fees | Often expensive (franchise fee plus ongoing royalties) | Lasts for the contract term | Depends on the legal form |
Limited liability is the big dividing line
With unlimited liability, if the business owes more than it owns, creditors can go after the owner's personal savings, car or other belongings. Limited liability protects personal assets. Limited liability is the main reason businesses incorporate. An unincorporated business can't get that protection, so it relies on liability insurance to cover claims for injury or damage — but insurance does not protect the owners from the business's debts.