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Self-Employment: Finding Your Way

As workplaces change, more people look to self-employment as a career option. For example, young Canadians are changing jobs at a much faster rate than those from previous generations. At some point, they may wonder about working for themselves.

There are many pathways to self-employment. You could be an agent, consultant or contractor. You could own a small business, a franchise, or a social enterprise. You could work on your own or as a member of a co-operative, or you could have employees.

Let’s look at some of these options.

Agents or brokers, consultants, and contractors

Agents or brokers connect customers with products or services they need. Examples are mortgage brokers and real estate agents.

Consultants offer advice based on what they know. Examples are event planners and career consultants.

Contractors take temporary jobs (lasting hours to weeks to months) one after the other. Contract jobs may be part- or full-time. Examples include editors and writers.

Reward and challenges

The benefits of being an agent, consultant, or contractor include choosing where and when you work, and what kind of work you do.

On the other hand, you must often compete for jobs. You won’t always win, so you might try to avoid gaps between jobs by taking on too many projects at once. Juggling clients, projects, and deadlines can be stressful.

Co-operatives, franchises, and other models

Sometimes self-employed people team up with others when bidding on contracts to show they can handle larger projects.

For example, a home-owner looking to add a room on their house might need a team that includes a carpenter, a plumber, an electrician, and a painter.

When people team up to compete for a big contract, they improve their chances of winning a large amount of work they can share. This is sometimes called a consortium.

A co-operative is jointly owned by members, who share in the decisions, risks, and benefits. The Alberta Community and Cooperative Association can tell you more. Service Alberta also has useful information.

A franchise is when you lease a business from a larger company. The company usually builds or renovates your location, trains you and your staff, provides advertising, and makes sure you follow its rules.

A small business can have as few as 1 worker or as many as 10 or more. You can run it as a home-based business to keep costs low and prices down. Or you may operate out of shared office space, splitting the costs of items like desks and computers with others.

A social enterprise aims not only to make money, but to achieve social goals. For example, if you sell jewellery and give some of the proceeds to a charity, you have a social enterprise. Social enterprises can be very large. The Calgary Stampede is an example.

Rewards and challenges

There are rewards and challenges to all of these models. Buying a franchise can mean a large cash outlay. But since there is already a working business model and customer base, it has a good chance of success.

Starting your own small business can cost less than buying a franchise, and you can run it the way you want. But there is greater risk when you are starting from scratch.

Creating a social enterprise can have a great impact on the lives of others. But sometimes getting funding and staying focused on a long-term mission can be a challenge. For more information, see: Self-Employment: Rewards and Challenges.

Overlap between options

There can be overlap between these options. There might not be only one pathway that works for you. Perhaps the best plan is to combine 2 or more pathways so that the result fits your personal situation. For example, you can be a 1-person business and also be in talent pools. You can be a consultant who takes on contracts, or an agent with a small business.

Canada Revenue Agency

There are tax rules to help self-employed people offset the costs of working for themselves and employing others. But it can be easy to break the rules without knowing it.

For instance, if you work on-site for a company, or provide a service a staff member might provide, you might be breaking the rules. You need to know how Canada Revenue Agency views your income to ensure this doesn’t happen.

If you’re thinking of working for yourself but don’t know the best pathway, think about your skills, interests, and what form of business you would like to run. Before you go any further, find out if you have the right traits and attitudes to succeed.

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