Are you considering starting your own business as a self-employed entrepreneur? If you want to build a successful entrepreneurial business this article is an insightful guide. We’ll cover everything from finding business opportunities to managing your finances to saving for retirement.
Starting Your Self-Employed Business
Before you rush into a new business venture, find out if you’re ready for self-employment. It takes an entrepreneurial spirit, passion, and the willingness to work by yourself, possibly for more hours than a typical 9-5 job.
Being self-employed isn’t quite the same as starting a small business. When you’re self-employed, you work as a sole proprietor or independent contractor without other employees working under you. In short, you are the business. A small business owner, on the other hand, likely has several employees or uses contractors to handle some of the work.
Once you decide the entrepreneur life is for you, it’s time to settle on a type of business. For some entrepreneurs, a hobby turns into a money-making business idea. Knowing the difference between a hobby and a business is essential when it comes to figuring out how to pay taxes.
You can choose to run a consulting firm, service business, or freelance business, to name a few. Even entrepreneurial retirees are getting in on the self-employment lifestyle with startups that fit their skills and life circumstances.
Learn how to start an online business today.
The transition from full-time employee to full-time contractor requires careful financial planning. Saving enough money to cover several months of expenses helps you pay your bills while you’re ramping up your business income. Another option is to start a side business while working full time; this allows you to earn dual income and grow your client roster without giving up a steady income.
The gig economy makes it easy to make extra money on the side. Thanks to this growing free market system, you can take on short-term gigs and temp positions as an independent contractor. Increased mobility and tech solutions make it easier than ever to complete work online. You can work for different companies doing a variety of tasks, and much of the work is location independent so that you can work from anywhere.
Having a business idea and a financial strategy is an excellent place to start, but you also need a solid action plan. Following a checklist to become your own boss helps you cover all the essentials, from creating a budget and saving money to registering your business and setting up your perfect home office. Developing a business plan also helps guide your decisions as you transition into being self-employed.
Sole Proprietor Jobs
Think self-employment is limited to certain industries? With the gig economy more popular than ever, it’s easier to find self-employment options that fit your schedule, skills, and interests. From being a freelance photographer — to running a cupcake business, no matter where your experience lies, you can strike out on your own.
Sometimes your interests guide you toward a business idea. If you’re a foodie, opening a restaurant is an option, but it isn’t your only choice. Starting a personal chef business gives you more freedom in how you work, and you can begin with less capital since you work in your clients’ homes. Alternatively, you could create a cupcake business. Consider your interests and how they might work as a business idea. Below are other prompts to help you think of opportunities to launch your own small business.
Want to put your creativity to work? Whether you’re a musician, artist, or designer, working for yourself gives you more creative freedom. When it comes to getting your first photography jobs or finding clients for a video production business, you can tap into your network of professional and personal contacts.
Use professional skills
Using your professional experience in a field such as physiotherapy or project management is another business option. Instead of working for someone else, consider starting your own practice or firm. Chartered accountants can grow their clientele with robust accounting software to simplify the workload.
Or maybe you have experience as a software developer and want more control over what you create. Even nurses can break free from traditional employment with travel nursing jobs that offer short-term assignments in various locations, so you can see the country and earn a steady income.
If your professional experience relates to law or politics, you might combine that knowledge with your passion for certain issues as a self-employed professional lobbyist. Or become an independent paralegal to have more freedom to work on the cases you enjoy.
The construction industry is another area that supports self-employed ventures. You can start your own general contracting business or focus on a specific part of the construction process, such as drywall, foundation work, or crane operation.
Potential clients: Fill online needs
If you’re interested in the gig economy, head online, where you can find many self-employed options. Starting a freelance writing business lets you support other entrepreneurs who want to outsource writing for their blogs, websites, newsletters, and other communications. If you consider yourself social media savvy, you can build a business as a social media consultant working for multiple businesses.
Embrace the sharing economy
Ever used Uber or Lyft to get where you’re going? Maybe you use Instacart to get your groceries delivered. Or you find your vacation accommodations on Airbnb. The sharing economy opens up new possibilities for everyday activities. And you can make money working as an independent contractor within that sharing economy. Whether you’re delivering someone’s groceries or restaurant order or you’re hauling them across town, tracking your mileage with convenient apps makes it easier to manage your gigs.
Do on-demand labour jobs
Another trend in the gig economy is on-demand labour. Pet sitting, babysitting, running errands, moving, cleaning and handling small home maintenance tasks are all examples of on-demand labour jobs you can do for pay.
Growing Your Business
As you develop your business, you’re also developing yourself into a smart business owner. Growth comes with first hand experience as you develop your business, but you can accelerate that growth with tools, training, and proven business strategies. At the same time, you want to take care of yourself to avoid burnout and keep a healthy work-life balance.
Starting or expanding your business
You have to start somewhere when you’re self-employed. For some, that means building something from the ground up. For others, that means buying an existing business. As you start to see success, you may even consider opening a second location. Or maybe you’ve outgrown freelancing, and you’re looking to expand your business in other ways. However you start your business; it’s important to maintain a strong work ethic to keep things on track.
The good news is you don’t have to reinvent effective business techniques or do everything manually. Entrepreneurs have many self-employed tech solutions at their fingertips with software and apps to automate many processes. The options cover everyday tasks that take up your time, including collaboration, payment processing, bookkeeping, and communications.
Utilizing the cloud for business can also simplify your operations with information accessible from any internet-capable device. That means you can run your business from your smartphone. The time you save using cloud-based and tech solutions frees you up to spend more time on customer service, new product development, and other revenue-generating activities.
Learning as you go
Being an entrepreneur keeps you busy, but carving out time to continue learning can give you new tools to run your business more efficiently. Consider leadership seminars to strengthen your managerial skills while networking with other entrepreneurs. Going back to school is another option if you have a specific educational goal in mind. Others prefer to go straight to the source with expert advice from a business coach on topics such as sales strategies, management techniques, or marketing methods that work. Once you have a few years of self-employed experience on your resume, you may decide to share your wisdom by becoming a mentor.
Managing Your Finances
So much of running a business comes down to finances. Do you have enough revenue? Are you spending and investing wisely? Are your profit margins high enough? Getting a handle on your finances, whether you assume the role of a business accountant or outsource the job, can give you a stronger foundation for success.
Starting with a solid self-employed budget gives you a framework for making decisions. That budget helps you calculate the amount of revenue you need, which makes it easier to set independent contractor rates or decide how to set your small business owner salary. You may also need help with funding, whether you go for a traditional bank loan, seek investors, or apply for special government programs such as grant and loan programs for women entrepreneurs.
Another key element to managing your finances is invoicing clients for goods and services. You can use different types of invoices to fit your situation. Implementing flexible payment options, reminders, discounts, and other strategies can encourage clients to pay invoices faster, which keeps cash flowing into your business.
Don’t worry if you feel like you need a little financial guidance as you navigate the self-employed world. Some financial situations are trickier than others, and even with an understanding of the financial secrets and hidden costs of self-employment, you may want personalized advice from an accountant or financial advisor.
And after you figure out your funding, budgeting, and salary issues, you have to start thinking about filing taxes. From calculating sales tax to filing your business returns, QuickBooks software can help you keep everything organized and come out with accurate numbers.
Decisions and Conflicts
Even with your solid plans and best efforts, running a small business comes with big decisions and, occasionally, conflict. Those decisions might range from choosing charities for corporate philanthropy to improving inventory strategies. Or maybe you’re ready to step away from the business a little more as you transition management duties to other key staff members.
Honing your decision-making skills can help you manage those situations with confidence. Decision-making methods and models also come in handy if you’re not sure which direction to take. Be prepared to make decisions, from small decisions like choosing printer paper to large decisions like choosing how to invest your capital.
It’s also a good idea to prepare for potential conflicts. Your staff and customers look to you to handle issues when they pop up. Sometimes the concern starts with the client. Learning how to tactfully handle challenging clients helps you manage the situation without damaging your company’s reputation.
Depending on the nature of your business, you may have other sources of conflict, such as conflict of interest in the agency problem. Recognizing potential conflicts in your industry can help you stay ahead of and resolve issues quickly when they do arise.
Advice and Inspiration for the Self-Employed
Running your own business takes a lot of work. Some days you just need a little inspiration from other businesses who made it. The self-employed economy in Canada is growing, which is good news for entrepreneurs like you. That also means you have access to lots of inspirational advice from others. It’s important to learn from other entrepreneurs, both online and offline.
Hearing stories from other entrepreneurs can provide you with techniques that work and the inspiration to keep going. Tricks like making the most of your first 20 minutes each day can drastically increase your productivity. Whether you’re just starting out or already run a successful business, it’s always a good idea to continue learning and seeking advice and inspiration from fellow entrepreneurs.
Saving for Retirement When You’re Self-Employed
Whether you work for a company or for yourself, you eventually want to retire in a comfortable financial situation. Retirement looks a little different when you’re the boss because you’re responsible for your own retirement savings without an employer making contributions.
You have some choices on how you save, but others aren’t optional. Everyone, even self-employed individuals, has to contribute to the Canada Pension Plan. You do have some choice in when you begin collecting your CPP benefits. The Old Age Security program is another Canadian retirement plan option for small business owners. If you’re looking for more ways to save money for retirement, a tax-free savings account (TFSA) is also an option.
Another part of your retirement strategy is creating a succession plan to keep your business running without you. That involves deciding if you want to pass on the business to a family member, sell your shares to a partner, or sell the company to a third party. Strategies such as an estate freeze can facilitate that move toward the future, whether you’re ready to walk away entirely or retain some say in the business.
From creating your business idea through retirement, having the right tools and advice can support your entrepreneurial aspirations.
Information, ideas and opinions expressed on this website should not be regarded as professional advice or our official opinion and you are strongly advised to consult your professional advisor before taking any course of action related to them. Each financial situation is different, the advice provided is intended to be general, and such such, you are advised to consult your financial or legal advisors for information specific to your situation. The information contained in this website is provided ‘as is’ and your use of and reliance on the information is entirely at your own risk.