Tempted to give salaried work the kiss-off and start your own company? If you do it, you’ll be joining the proverbial, growing club: According to Statistics Canada, 15.7% of Canadians were self-employed in 2010 — an increase of 12% compared to 2000 — with half of these flying solo, unincorporated and without any employees. In the modern workforce, steering your own ship can be rewarding, but the waters can get very rough indeed. Here, seven pros and cons worth considering. How to know if self-employment might be your calling? Ask yourself if these “cons” sound like opportunities rather than crises.
Pro: Like never before, you can work from anywhere.
Con: You still need to be professional.
You could be the ultimate modern nomad, armed with smartphone, laptop and unlimited data plan, doing work at hipster cafes, your coffee table or even Hong Kong — why not? Still, clients want to deal with someone who respects their time and acts like a pro. That means no espresso whoosh or screaming kids in the background. A few other tricks for your new trade: get a respectable-sounding email address, possibly with your own domain (as little as $6/mo), and create a quality email signature; start using Skype, DropBox and other tech tools for connecting and collaborating; never be lazy about meeting people in person; invest in an office or co-working space if it would improve your productivity; and get an HST number well before you need it — not so much for tax purposes as to ensure you don’t look like small potatoes.
Pro: You can do whatever you want.
It takes discipline to stay on track and get the job done. When you’ve got deadlines to meet and your buddies invite you on a week-long camping trip, for instance, you’ve got to dig deep and say no.
Pro: You’re the CEO.
Con: You’re the janitor.
Not every aspect of running a business is fun. Think of all the office support you take for granted: finance, IT, sales, marketing, even housekeeping. Are you prepared to do it yourself?
Pro: Vacation days, no permission required.
Con: Vacation days, no vacation pay.
That’s not all. You can expect to give up other perks like paid sick days, medical and dental benefits, expense accounts, on-the-job training, RRSP matching and tech toys paid for by your employer. The biggest sacrifice? A steady and predictable income.
Pro: You choose your line of work.
Con: You need to do your homework.
Homework means market research — lots of it. Think you have a great idea? First, find out if there’s a demand for it, what credentials you’ll need, who are your competitors, what are the potential profit margins, what regulations apply to your chosen business, what services you need to hire, etc.
Pro: You get to pick your clients.
Con: You have to find them first.
You’ll be pounding the pavement, especially when you launch your business. Until you become established, you might have to take whatever you can get; cherry-picking is a luxury you’ve got to earn. Not comfortable making sales pitches? Start practicing. On days when your day planner is empty, you’ll need to jump on the phone and drum up new business.
Pro: You get to keep all the profits.
Con: There might not be any profit — and you still have to pay all your expenses.
Having a smartphone, laptop, Internet access, office space, office supplies, insurance, utilities, travel costs and marketing materials adds up. It takes money to make money, so start saving up. And get friendly with your bank: used wisely, a line of credit is a great safety net.
6 online resources for Canadian small businesses
• Canada Business
• Canada Small Business Financing Program
• Atlantic Canada’s Entrepreneurs’ Forum
• Ontario Government’s Small Business Enterprise Centres
Image courtesy of mangpages.