Though being self-employed can be very rewarding, it has its fair share of challenges and comes with lot of responsibility. Here's some advice to help you make a smooth transition.
"The first condition of happiness is that man may take joy in his work."
- André Gide, French author
Before you take the leap, make sure you fully understand what it means to be self-employed. As a self-employed worker, you'll choose your own hours, purchase your own stock and equipment, and potentially earn more, but you'll also take on more risks—and could even lose money. You'll face very different challenges than you would as an employee.
You can choose to operate as a sole proprietorship or incorporate your business. Consult the website of your province's business registry for more information and to find out if you need to register your company.
There are a number of government organizations that can help you establish your business. Some of them, such as Emploi-Québec and the Canada Business Network, can offer financial aid based on your situation, while others provide support.
You'll need to hire a good accountant, who can identify all the tax deductions you are eligible for as a self-employed worker. You can also consult a National Bank advisor for help with various issues, including tax strategies. Feel free to contact us to make an appointment.
If you operate a sole proprietorship, no distinction is made between your personal and business finances. Nonetheless, it's a good idea to open two separate accounts. This will make it easier for you to manage your finances and file your tax return.
When you're self-employed, you can't count on anyone else for your income. We recommend taking out disability and critical illness insurance. If the unexpected should happen, you'll be covered.
You should also consider saving some money in a High Interest Savings Account to pay your tax bills and cover slower periods. Set up a systematic savings plan for hassle-free saving. Select the frequency and amount, and funds will automatically be transferred to your savings account.