2020-02-19 17:09:13 Self Employed English Learn everything you need to know about registering as a self employed business owner, including best practices and useful apps. Find out... https://quickbooks.intuit.com/ca/resources/ca_qrc/uploads/2020/02/self-employed-feature.jpg https://quickbooks.intuit.com/ca/resources/self-employed/self-employed-business-owner/ How to register as a self employed business owner in Canada

How to register as self-employed business owner

33 min read

By 2020, 45% of the Canadian workforce will be made up of self-employed people—including independent contractors, freelancers, and on-demand workers.

With almost 19 million people working in Canada today, it means roughly the population of the Greater Toronto and Vancouver Areas combined (approximately 8.5 million) will be self-employed.

Almost half of those people are becoming self-employed to achieve greater work-life flexibility. And 41% are doing it to add to their income.

Whatever your motivation might be, all self-employed business owners in Canada are legally required to register your business.

In this article, we’ll walk you through all of the necessary steps. Additionally, we’ll share some tips and tools you’ll need when registering your self-employed business in Canada.

Table of Contents:

 

What are the advantages of self-employed business registration?

While the legal requirements and process might seem overwhelming, there are many advantages to registering your self-employed business in Canada.

  • Business registration enhances your brand image and reputation—making your company more attractive to potential investors, business partners, clients, and customers
  • Registering your company as a separate legal entity protects your assets—if your business is ever held accountable when something goes wrong
  • You’re entitled to a range of tax benefits as a registered business owner
  • It ensures your compliance with Canadian law, which helps to create a more stress-free work experience

Understanding all of the benefits of registering is necessary, but how do you know if you’re ready to go for it?

How to know if you’re ready for self-employment

The idea of being your own boss is appealing to many people. You get to set your hours, no one watches what you do all day, and you control your destiny.

It can also be satisfying to find your own customers and do work you love. Still, it’s not for everyone.

It’s essential to understand the potential challenges to make sure you’re ready. So if you answer yes to the following five questions, then self-employment could be in your future.

1. Do you have the entrepreneurial spirit?

When you first choose to become self-employed, you have to be your own salesperson, admin assistant, bookkeeper, project manager, and worker bee. Your success rests solely on your shoulders.

Payroll, supply management, technology, invoicing, and other functions are now part of your daily responsibility. And an eight-hour workday can quickly turn into 12-hours—or longer early on. Expect to make that kind of commitment when you first jump into the world of self-employment.

2. Can you handle the financial responsibility?

There are expenses you might not consider before becoming self-employed. The cost of setting up your business is a big one. If you sell a service and don’t have any inventory or large equipment, a home office space and a computer might be all you need.

However, service businesses like accounting may require a commercial space to comfortably meet with clients and create the image of an established company.

As a self-employed individual, you don’t get any assistance with payroll taxes and insurance. So expect your annual tax bill and other costs to go up. It helps to have a savings cushion in case things don’t work out as planned. You can try to find startup funding to support your business expenses as well.

3. Are you passionate about your career?

If you don’t put in the work when you’re self-employed, you don’t get paid. You might also lose your motivation to succeed when you aren’t passionate about your profession. If this happens, your cash flow starts to dry up.

When you’re passionate about what you do, you not only work harder to satisfy your clients; you’ll develop a solid professional reputation, too. All of which will help to generate further business opportunities down the line.

4. Can you give up some personal flexibility?

While you can often set your own schedule, you’ll also have to make sacrifices with your free time. If you’re an accountant, for example, you likely can’t take vacation time during the first four months of the year.

For many self-employed people, taking a day off means no income for the day. Keep those considerations in mind to make sure they fit with your lifestyle.

5. Can you spend long periods alone?

While self-employment can be rewarding, some people find the social isolation difficult. Working for yourself involves many hours alone in your home office, or in a commercial office space—especially if you don’t have any employees.

The peace and quiet might be a reason some people choose to leave the corporate world. But extroverts who thrive on social interaction can find that set up less fulfilling. You can solve the issue by scheduling time for lunch with friends or joining professional organizations. Additionally, getting out for short walks and coffee breaks helps to break up the day.

If you still feel ready to take the plunge after reading those questions, then let’s talk about what you need to register your business.

 

1. Decide on a business structure

Self employed business owner business structure.

A critical first step in registering a business is deciding which type of business structure to register. Here’s a definition of the four Canadian business structure types you can choose from:

Sole Proprietorship

A sole proprietorship is the easiest structure to create and is often selected by brand new business owners. If you pick this structure, you are the sole owner of your company. In other words, both you and your business are the same by law and in the eyes of tax authorities.

Advantages of a Sole Proprietorship

Registering your business comes with a lot of benefits, including:

  • It’s affordable and straightforward: It’s a pretty flexible choice for many first-time entrepreneurs. With less paperwork to file, you only need to fill out a simple government form to register a business name. You may also qualify for sole proprietorship tax deductions.
  • Operating freedom and flexibility: You can make any changes you want, including changing business policies and type of business, without much cost or process. Unlike in partnerships or corporations, you don’t need consent or approval from partners or investors to make a business decision.
  • All profits your business earns are yours to keep.

Disadvantages of a sole proprietorship

The most common challenges include:

  • Unlimited liability: Your small business is personally liable for business actions and debts. A sole proprietorship doesn’t exist as an entirely separate entity, and thus, all personal property or wealth is linked to the business. If your company goes bankrupt, you may have to have to dig into your pocket to pay debts.
  • Difficulty raising capital: Finding potential investors and raising money can be much harder. Investors have less peace of mind regarding the use and security of their investment when it comes to a business with no separate legal entity.
  • Lack of financial control and difficulty tracking expenses: Because you run the business on your own, you may not have enough time to track and separate business and personal expenses. However, QuickBooks Self-Employed (QBSE) can help with easy expense tracking, as well as automatic receipt organization, invoicing processes, mileage tracking, and cash flow summaries.

Partnership

Similar to a sole proprietorship, there’s no legal separation between you and your business. The only difference is there are two or more business owners.

Business owners in a partnership combine financial resources to pay for operational expenses. The partners have a contractual agreement which breaks down the percentage of ownership and distribution of revenue.

There are three types of partnerships:

  1. In a general partnership, each partner is liable for business debts.
  2. A limited partnership allows a person to invest money or other assets into the business without giving that person the authority to make decisions regarding business operations.
  3. A limited liability partnership is only available to a specific group of professionals, including doctors, lawyers, or accountants. An accountant might partner with, say, a tax attorney using this structure to offer more comprehensive services to clients. This arrangement allows them to pool resources, share office space, reduce business costs, and earn more profits than individually.

Incorporation

A corporation (or incorporation) is a business structure which makes your self-employed business a completely separate legal entity. One or more shareholders own the business, and you earn a salary, just like all paid employees. Since Canadian law views you and your company individually, your personal assets remain untouched if you owe business debts or taxes.

It’s vital to seek legal assistance if you choose this structure since the setup process is extensive. Owners of corporations must keep detailed records and reports of their financial information and must file these records with the government annually.

A corporation is also more costly to operate than a sole proprietorship or partnership is, and owners might have to prove Canadian residency or citizenship.

The advantages of incorporation

Incorporation means changing the format of your small business into a registered corporation. It carries many of the same benefits as a limited liability corporation does in the United States, though the LLC form doesn’t exist under Canadian law.

Some of those advantages include:

  • Your company can continue to exist, even when the management changes
  • It’s a separate legal entity and is considered a person on its own—the company can file, sue, or be sued, just like real people
  • Adding a legal ending, such as Inc., to your business name brings authority and instant legitimacy
  • An incorporated business can collect payments, and more easily access loans and capital from different sources
  • Brand building and marketing can be easier for corporations because they sell themselves to the masses

If you want to increase profit margins, share losses, more easily access capital, and have financial control over a business that can have perpetual existence, then set up a corporation.

As with a sole proprietorship, the steps to incorporate a business vary from region to region. You can consult with CRA and territorial authorities about specific rules and regulations. I’ll get into some regional requirements a little later on.

Co-operative

In a co-operative business structure, an association of members owns and controls the business. Co-ops are set up to meet the needs and expectations of their members. You can set this type of business up as a for-profit or not-for-profit entity, and participation from all members is typically necessary for success.

2. Choose a compelling business name

Choosing a business name as a self employed business owner.

Once you’ve set up your business structure, you should choose your business name. Here are a few essential guidelines for selecting one:

  • Explain your product or service: As a new business owner, you may not have the marketing funds necessary to educate the public about a business acronym (e.g., IBM or AT&T) or non-relevant business name (e.g., a sentimental name). But if you’re a sole proprietor named Jane Smith who offers catering services, “Jane Smith’s Catering” or “JS Catering” leaves no doubt about the services you provide and makes it easier to target your market.
  • Aim for uniqueness: Try to choose a name that’s both memorable and unique. Business names containing rhyming words, such as “Joy’s Toys” or “Burt’s Frozen Yogurt,” are catchy and likely to stick in a customer’s mind.
  • Make it web-friendly: It’s best if your website address is the same name as your business or contains your business name. It’ll make it easier for potential customers to find you online. Also, business names with a hyphen, exclamation point, asterisk, or purposely misspelled words aren’t easy to remember or search-engine friendly. A good web presence can increase business, so selecting a simple, “short and sweet” name is essential.
  • Be professional: Your business name projects your company’s brand and image. Think of how it might look on letterhead, as a company logo, or on a company advertisement. Does the appearance satisfy you and your target audience? Does the name sound professional when read aloud? Would others be proud to associate with your company? Make sure its impact is positive.

Before you create logos or letterhead, make sure the name and appropriate URLs or social media accounts are available.

3. Check your chosen business name availability

If the name you like belongs to an existing business, you can’t legally use it, and you’ll have to choose a different one. It’s equally important to make sure the name of your business does not sound too similar to someone else’s business name.

You can start with an internet search on Google, Bing, and every other major search engine you can think of. Check social media platforms such as Facebook and Twitter. If you plan to conduct business in multiple countries, check for the name’s use in those countries too.

After conducting a thorough internet search, order a NUANS report from the Canadian government. A NUANS (Newly Upgraded Automated Name Search) report lists similar corporate names in all Canadian provinces and territories, except for Quebec.

You can also search the Directory of Canadian Companies, and lookup business names in each Canadian province and territory by visiting the government registry website of each location.

4. Register your business name federally

How to register a business as a self employed business owner.

It’s your first step in registering your business. First, let’s start with the steps to register your self-employed business federally.

Registering your self-employed business federally

If your business is a corporation, the business registration process is more extensive than it is for other business structures. There are a few steps you must follow:

Step 1: File Articles of Incorporation

This is a detailed form that explains the structure of your corporation. You’ll provide your corporate name, your corporation’s province or territory, the share structure of your company (or the shares of your company-owned or held by individuals or investors), the number of directors in your corporation, and a list of restricted business activities.

Step 2: Get a federal business number and corporation income tax account from the Canada Revenue Agency

You can get both by filling out the RC1 request form, available in PDF form on the CRA website.

Step 3: Register as an extra-provincial or extra-territorial corporation in all other Canadian jurisdictions

You must register your corporation in any province or territory where you plan to do business. You can adjust this information as your business expands or downsizes. Keep in mind; you’re not required to register your corporation federally. You can incorporate your business in one or more Canadian provinces or territories at a time.

Step 4: Apply for the permits and licenses your business needs

You might be able to obtain your business number, tax accounts, and provincial business registration during the incorporation process, depending on the territory in which you plan to operate.

Let’s look at specific provincial requirements next.

5. Complete provincial registration requirements

Each province has its own particular rules and requirements for registering businesses. Most businesses must register a business name in the province or territory in which they plan to run the operation. There are a couple of exceptions:

1. A sole proprietor, using their legal name as the business name, doesn’t have to register their name in any province. Although, the name can’t contain additions like Inc., Co., “and Sons,” or “and Partners.

2. In Newfoundland and Labrador, a corporation is the only business structure that requires business name registration.

Here are some of the highlights on what to do in each province:

Alberta (AB)

Visit the Alberta.ca website to register your business name. When registering a trade name or sole-proprietorship, you should complete the Declaration of Trade Name form. If you’re registering a partnership, fill out the Declaration of Partnership form. There are Limited Partnership and Limited Liability Partnership forms available as well.

If you’re incorporating, the Government of Alberta requires you contact a service provider authorized by the government to provide Corporate Registry services. A list of Corporate Registry agents can be found on the Alberta.ca website.

British Columbia (BC)

The first step is to use the BC Registry Service to get clearance to register your business name, which can take up to three days. You can do so in person at any Service BC or OneStop location.

After getting the approval of your business name, contact BC Registry Services again to register your business. You can also complete this step online or in person. Approval of business registration takes roughly two months, and you’ll receive a business number (BN) that you use as your company’s identifier.

Sole proprietors registering under your personal name only need to register with the local authorities, not the BC Registrar, to obtain a business license.

Manitoba (MB)

Your first step is to register your business name through the Companies Office Name Reservation website, which is part of the province of Manitoba’s official government site. Manitoba provides an online service called BizPal to simplify the process of figuring out which business licenses or permits your company needs.

Corporation owners must file and complete an Articles of Incorporation document online. Non-profit entities must file an Article of Incorporation. Unincorporated businesses, limited partnerships, and limited liability partnerships must renew your registration every three years.

New Brunswick (NB)

You must first register your business name by completing the New Brunswick Certificate of Business Name or Certificate of Renewal of Business Name form. This form must be submitted to the Corporate Affairs Branch. Once you secure your business name, you can apply for a Business Number (BN) through the Corporate Affairs Branch.

If you’re applying for a sole proprietorship or partnership, New Brunswick’s official government website offers kits and guides to simplify your application process. To incorporate your business, file an Article of Incorporation with Service New Brunswick. All documents can be filed online.

Newfoundland and Labrador (NL)

You only need to register your business if you decide to incorporate within the province. The first step is to request an official Name Reservation through the Registry of Companies.

Next, file an Articles of Incorporation, Notice of Directors, Notice of Registered Office in NL, and Certificate of Good Standing. You can access all of these forms on the Registry of Companies website.

Nova Scotia (NS)

Your first step is to register your business name with the Nova Scotia Registry of Joint Stock Companies. You can complete this step using the Nova Scotia Government Online Service for Businesses. Next, determine if you must apply for a Business Number (BN). Not all companies require BN registration, only those which require a payroll, corporate income tax, import/export, or GST/HST account.

Next, obtain the licenses and permits needed to legally operate your company through the Nova Scotia Government Online Service for Businesses. If you plan to incorporate, the government requires getting legal assistance. Nova Scotia corporations must have recognized agents who act as a legal contact for the company. These agents provide the Certificate of Incorporation as well as all the other forms you need to register your corporation. Upon approval, the government assigns your corporation a BN.

Ontario (ON)

If you plan to conduct business in Ontario, you must register with the Central Production and Verification Services Branch (CPVSB). You must register if you’re a sole proprietor operating under a business name that’s not your legal name, or are part of a partnership operating under a name other than the legal names of the partners.

You may be required to register your business name when opening a business bank account—as a sole proprietorship like a corporation would in Ontario—or when you require CRA tax accounts. Limited liability partnerships, existing general partnerships, corporations, and extra-provincial limited liability partnerships must also register their business names. Business registration is valid in Ontario for five years, and you can renew 60 days before it expires.

Prince Edward Island (PEI)

The first step is to register your business name with the Government of Prince Edward Island. You must register a sole proprietorship or a business partnership within three months of operation.

To incorporate your business in PEI, an officer of your company, such as the CEO, President, or Vice President, must complete a Declaration for Registration of a Business Name–Corporation form. Upon approval, the province lists your business in its Royal Gazette, which is PEI’s official listing of government documents. PEI requires business registration renewal every three years.

Quebec (QC)

If you own or operate a sole proprietorship or partnership in Quebec, that doesn’t include the first or last names of any of the owners, you must register your business within the first 60 days of operation. To register, complete a Declaration of Registration form in English and in French.

As of 2019, electronic filing is not an option, so you must take the form to a Registraire Des Entreprises Services Quebec (REQ) location in either Quebec City or Montreal. Upon approval, the REQ gives you a corporation number and a certificate of incorporation. You must pay an annual registration fee to maintain your corporation number.

Quebec requires you to re-register a sole proprietorship or partnership each year.

Saskatchewan (SK)

Sole proprietorships and partnerships in Saskatchewan which operate under a business name require business name registration. If you plan to incorporate your business, you don’t have to register your business name in this province. However, you must file an Articles of Incorporation, obtain a business license, and obtain a BN.

Contact the Corporate Registry at Information Services Corporation (ISC) in SK to start the registration process. Once the ISC reserves your business name, you must register your business with the Corporate Registry, Ministry of Finance, and Saskatchewan Workers’ Compensation Board. The Corporate Registry of SK has an online portal where you can file all of your documents electronically.

Be thorough when completing your registration

Once your province receives all of your information and associated fees for each form, you can expect a turnaround time that lasts between 3 and 60 days. Timing depends on the type of business structure, the province, and your filing method.

Missing items or unsigned forms can delay the process, so do a thorough review of each page before registering. Upon approval, you’ll receive either a certificate of compliance or certificate of incorporation, depending on your business structure.

You can also request a certified copy of your Articles of Incorporation after completing the process. Keep in mind; you’ll need to update the information from time to time.

6. Update your business information as needed

How to update your business information as a self employed business owner.

Once you start and register your business, you must keep it in good standing with the government. If you change your business name, type or status, physical or mailing address, director names, or provinces in which you operate, then federal and provincial governments require you to update company information.

Here are some things to keep in mind:

Remember where you’re registered

Keep track of all the information on where you’re registered. If you incorporate at the federal level, Corporations Canada lets you search by corporate name, corporation number, or business number (BN) to check your registration.

If you create your company under provincial or territorial legislation, Canada’s Business Registries lets you search for the province or territory you need. If you’re federally incorporated and doing business in multiple provinces, the site gives you extra-provincial registration information.

Update your company information online

Once you know where you’re incorporated or registered, update your company information online on the federal or provincial sites. If you’re a federal corporation, the Online Filing Centre allows you to file many changes for free.

Provinces have their own filing centres with specific requirements. For example, Ontario requires you to update any registration information changes within 15 days of the change. It’s good practice to report changes quickly, regardless of the provincial requirements.

Confirm your updates are complete

The simple way to confirm your updates is to look up your business. When you file with Corporations Canada, it may take several hours before they update their database.

It’s a good idea to make your changes early in the day. Take note of when and what you update, and then check back before the close of business to ensure your changes are in place.

Updating your business information as soon as possible after changes happen keeps you on the right side of the law. It also lets you move quickly on matters such as opening a business account or applying for grants or loans.

You’ll make it easier for people using the databases to find you and get more information about your product or service—leading to more business in the future.

7. Be aware of specific taxes and benefits

As a self-employed Canadian, you have to pay special taxes and be mindful of other financial obligations that don’t apply to wage-based employees. Some are a normal part of starting any business, like registering your company and signing up for the value-added tax (VAT).

Other factors—including the correct valuation of assets you plan to use for business, such as your phone, computer, and private vehicle—need special attention. The Canadian Revenue Agency (CRA) provides a checklist on its website about your likely tax expenses when starting your own business.

If you’re self-employed and not incorporated, the CRA will count you in the same category as a sole proprietor for tax purposes.

Opting-in to Employment Insurance (EI)

You don’t have to contribute to the Employment Insurance (EI) program if you’re self-employed. But if you ever plan to go on maternity leave, or are concerned you’ll one day need to go on short- or long-term disability, then you must opt-in pay EI to receive benefits. Once you opt-in, you must continue to pay EI even after you’ve received benefits.

Eligible registrants

Anyone who owns a business may register for special benefits—including people who own more than 40% of a corporation and farmers. However, if you are a contract worker such as a barber or taxi driver, you should use the regular EI program. Additionally, if you are a fisher, you do not have to sign up for the program, as you’re insured under EI Fishing Regulations.

You can apply through your My Service Canada Account. Select “Employment Insurance for the Self Employed” on the homepage of your account, then follow the prompts to create an account.

Calculating EI Premiums

As of 2019, EI premiums are 1.63% of earnings up to $51,300. It means you pay $1.63 for every $100 you earn. However, if your earnings exceed $51,300, you do not have to pay premiums on the excess earnings. The rates and thresholds change annually, so do check for updates.

Note: You pay contributions on your income, not business revenue. For example, if you earn $1,000 in revenue and incur $200 in expenses, you only pay EI premiums on $800—the amount that’s considered your income.

Claiming benefits

If you cannot work due to an issue covered by EI (e.g., maternity leave or needing to take care of a sick family member), you can submit a claim for benefits. However, you must pay premiums for at least 12 months before making a claim.

You can request benefits online through a process which takes roughly an hour. You’ll need your Social Insurance Number, address, and other relevant details.

Amount of benefits you’ll receive

If you submit a claim, you’ll receive 55% of your insurance earnings per week. As of 2019, the maximum amount of insurable earnings is $51,300. As a result, the maximum weekly EI benefit is $562. If you work part-time while receiving benefits, you do not get the full amount of your payment. Also, the reduction varies based on the type of leave and the amount you are earning.

If you have another job in addition to your self-employment, you may opt only to pay EI premiums through that job. However, your self-employment earnings won’t be taken into account when calculating your EI benefit.

Tax rules for buying into an existing business

Depending on the province in which you operate, you may be on the hook to charge and remit the Goods and Services Tax/Harmonized Sales Tax (GST/HST) to the CRA. It even applies if a current business owner is ready to retire and you’re taking over.

This tax can be expensive when you’re just starting out. However, there are ways to earn an exemption. One of the most common ways out of paying GST/HST is to buy at least 90% of the equipment you could reasonably need to do business. Then, agree with the seller to opt out of the GST/HST by filling out CRA Form GST44.

Since most self-employed people who buy their businesses from others buy them all at once, this is a routine part of such purchase and sale transactions in Canada. It’s easy to claim this GST/HST exemption, though it’s a good idea to discuss it with the person selling you the business beforehand, because both of you must file the form together.

8. Plan for your retirement

Saving for your pension as a self employed business owner.

As a self-employed business owner, you must plan your own retirement. When the time comes to take accumulated profits out of your company, should you pay yourself dividends, contribute to your registered retirement savings plan, or both?

Here are some things you need to consider to make an informed decision:

Contribute to RRSPs

Contributing to your RRSP lets you defer taxation on your current income until you retire, allowing you to earn investment income on your contributions tax-free. Since you are likely to pay taxes at a lower rate when you retire than you do now, the tax deferral can mean long-term tax savings.

But there’s a catch for small business owners. RRSP contributions are subject to a limit equal to 18% of your employment income up to a maximum of $26,500 (for 2019). To contribute the maximum amount to your RRSP, you’d have to pay yourself a salary of close to $145,000. The RRSP deduction will lower your taxable income to approximately $120,000. But at that level of income, your marginal tax rate will still be somewhere around 50%, depending on your province of residence.

On the other hand, dividends are not eligible income to create RRSP contribution room, so you will not benefit from a deduction. However, the marginal tax rate you pay on dividends, depending on your province of residence, will be somewhere between 30% and 40%. If you reinvest the funds from your dividends, they may be taxable, unless you use another deferral mechanism such as a tax-free savings account (TFSA).

The TFSA option isn’t tax-deductible when you contribute to it, but any interest or growth on the account when you withdraw for retirement is tax-free. For 2019, the highest annual contribution amount to a TFSA is $6000.

Optimal strategies

The real question is whether it’s worthwhile to pay slightly more taxes now to benefit from tax deferral on investment income. The answer is different for everyone, but a mix of dividends and salary is almost always the answer. When deciding, consider the following:

  • What is your province of residence, and what are the actual rates that apply to you?
  • Do you have unused RRSP contribution room? Do you need to create more?
  • How much time do you have before you retire?

If you have unused RRSP contribution room, then you are more likely to favor dividends—at least in the short term. That way, you’ll benefit from lower tax rates while still being able to make RRSP contributions. If you are younger, RRSP contributions become more advantageous because they can grow tax-free for an extended period.

Here are some additional factors to consider as a self-employed individual:

  • Change your thinking about retirement savings: Think of retirement savings as an essential business expense. Improving your financial literacy can help you reduce the risk of losses in your retirement accounts and maximize long-term returns.
  • Pick a retirement age: Most Canadians qualify for the Old Age Security pension and Canadian Pension Plan at age 65, which gives you a good starting point to determine when to retire. However, retiring earlier may mean you have to take a lower income in retirement if you don’t save enough over the years.
  • Target an ideal retirement income: Next, determine how much income you need in your retirement. The Canada Revenue Agency (CRA) Canadian Retirement Income Calculator can help you estimate what to expect during your retirement. You can then decide how much additional money you need to save to supplement your future income. It factors in income streams, such as the Canada Pension Plan and OAS, as well as any other pensions you qualify for from previous jobs.
  • Know how much to save: Breaking your retirement goal into smaller targets can help the end goal amount seem easier to achieve. If you want to have $1 million after 30 years, you need to invest $1,025 per month in an account making an average of 6% a year in interest. The more time an investment has to grow, the more it increases in compound interest.
  • Start small if you have to: Even if you can only contribute $100 a month, it counts. You can always increase the amount once you feel more secure. The best way to figure out what you need to do is to conduct an honest assessment of how you want your retirement to look—estimate major expenses, such as food, rent, travel, insurance, and medical expenses.
  • Make it automatic: Arrange to have money withdrawn automatically from your chequing account and deposited into your retirement account. Be sure you set the amount to one you can afford to do without every month. It’ll depend on the type of account you transfer the money to, there may be penalties or stringent conditions if you want to get the money back.
  • Hire a financial advisor: A financial advisor can guide you on how much you should save, what investments you should be putting your money into, and even plan your taxes and post-retirement. They can also help you design a savings plan that suits your business and your retirement goals.

There’s no perfect time to start saving for your retirement when you’re self-employed. If you’re middle-aged and haven’t started saving for retirement, you can still start building your retirement savings.

You may require extra savings and maybe a few additional years in the workforce, but a comfortable retirement is still within your reach. Crunching the numbers now is better than finding out too late you don’t have enough.

9. Read up on best practices

Self employed business owner best practices.

When you’re registering your business, gather as much information and advice as you can about self-employment.

Several books might help you develop a self-employment mindset and give you a leg up before launching your business.

  • A Paperboy’s Fable, by Deep Patel: The author’s father launched a newspaper delivery business as a teenager and grew up to be a successful CEO of a big corporation he founded. The author shares his father’s anecdotes, wisdom, and words of advice to help anyone on the road to gainful self-employment.
  • Smarter Faster Better, by Charles Duhigg: This short book, written by an experienced media professional, teaches you how to do more with less. He explains how to arrange everything around you to save effort, money, and time.
  • The $100 Startup, by Chris Guillebeau: If your goal is to live comfortably and do what you love, then this book is for you. Guillebeau provides inspiring case studies about people who managed to start and build a thriving small business with $100 or less.
  • The Lean Startup, by Eric Ries: This author explains how to manage your capital to get the most bang for your buck.
  • Think and Grow Rich, by Napoleon Hill: This study of how successful people got that way and stayed that way was first published in 1937. However, it remains relevant for Canadian self-employed workers today.

Additionally, there are plenty of blogs you can visit to gain a wealth of information and insight as you set off on your own.

Some other media publications, including Profits Magazine, published by the Business Development Bank of Canada (BDC), have huge online catalogues. You can search for specific topics, such as registering for the VAT or doing business across provinces.

Other online resources, like the QuickBooks Online Small Business Centre, provide countless articles to browse about self-employment and other Canadian-specific topics.

10. Set up helpful apps

The areas where the newly self-employed often need assistance are in time management, inventory tracking, networking, and accounting. These 10 apps can address those concerns:

  1. Focus Booster: This app helps with time management and tracks your productive work hours. It sets up a cheerful alert when it’s time to take a break and when you have to work.
  2. Freedom: Freedom can disable your social media access selectively while you work. Doing so can potentially increase the time you spend working while reducing procrastination. You can set it to lock down one device or several.
  3. Toggl: This app makes it easy to identify the blocks of time when you’re at your most productive. You can then correlate the factors which help you work and maximize those things going forward.
  4. Oh, Don’t Forget…: It manages the burden of keeping up with emails for you. Download and install this app, then flag the five or six (or 50) emails you get in a day that seem the most important. It’ll remind you to answer them before you wrap up for the day.
  5. Hootsuite: If you market your services across Canada or worldwide, you’ll need a social media presence. When you have a message for your followers such as teasing the launch of a new service, preload it into Hootsuite. You can schedule and send your tweets and updates across platforms on the times and dates you choose.
  6. Google Drive: Is the go-to resource for online collaboration—no matter where you or your customers and business partners reside. It’s useful for the exchange of documents, files, notes, communications, blueprints, and technical specs.
  7. Evernote: With Evernote, you can grab your phone, discreetly make a few notes, and then index your note to self for later. Your files don’t take up much space in their text form, so you can keep writing as long as you like without deleting anything you haven’t done yet.
  8. Juice Defender: This app can save you the frustration of not having enough phone battery power to make it through a day of conference calls. Performance varies by device type, but this app could stretch your phone charge by as much as 300%.
  9. Square Register: It lets you charge credit and debit cards from any location with a good internet connection, including the Wi-Fi at your local coffee shop. Square Register even provides the option of porting sales information over to your QuickBooks account and issuing an emailed receipt to the buyer.
  10. QuickBooks Online: Track inventory and payroll, schedule invoices and payments, track your income over time, and prepare the necessary documents to file your self-employment taxes with this all-in-one service. You can buy a package with all of the features you need, or pick the apps you plan to use now and add later as your business grows.

Hundreds of other apps are also compatible with QuickBooks, so it’s easy to customize your digital approach to accounting, finance, and tax software.

Registering your self-employed business is the first step

After registering your self-employed business, you can begin operating as a legal entity in Canada. Your next steps will involve writing a business plan and preparing to launch your business.

You can start on solid footing by managing your finances wisely and using the available tools to make your job easier. The QuickBooks Self-Employed app helps freelancers, contractors, and sole proprietors track and manage your business on the go. Download the app today.

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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