Making a Success of Working for Yourself

Carlo Pandian

Carlo Pandian

Carlo Pandian blogs about small business, technology and marketing covering everything from the best use of social media tools to tutorials on QuickBooks online bookkeeping software.  When he’s not online Carlo enjoys getting out and about on his bike and enjoying great food.

When you’ve finally given up on the endless and thankless task that is early twenty first century job hunting, it’s time to consider employing yourself.  In Canada increasing numbers of individuals are taking this route; it’s not that they are unemployable but simply that the number of jobs out there and the number of people interested in taking them doesn’t match.  You may be eminently employable – but so are a lot of other people!  Besides, it makes sense to make a profit from your talents, rather than let an employer take the profits from hard work.   When you first come to the realization that you might well be better off running your own firm or working for yourself it is an exciting, but daunting prospect.  Getting the basics right can help.

Business Structures

Decide on your company structure. There are four options in Canada; sole proprietorship, partnerships, corporations and cooperatives.  The last is rare and generally used by not-for-profit organizations.  The main differences between the remaining three are simple.

  • Incorporating a firm creates it as a separate legal identity.  Effectively the incorporation documents are like a birth certificate; the company can do most things that an individual can, open bank accounts, take payments and pay tax!  A corporation structure also means that the firm is solely responsible for its liabilities and the owners (you) are not personally responsible.
  • As this structure involves the highest set up costs, most self-employed people will choose either the partnership structure, if working with others, or sole proprietorship if working alone.  Both are simpler to set up and run, the main difference being that in these structures liability remains with the individual or individuals.
  • In terms of registration different provinces have different rules; incorporation can be done at either provincial or federal level, although the latter does not preclude provincial registration in all cases.  In all provinces, with the exception of Newfoundland and Labrador, sole proprietors will be required to register at provincial level only.

Playing to your Skills

In the case of the self-employed, running a business doesn’t just mean doing the day job.  It also means doing everything else.  At the planning stage you should identify your strengths and weaknesses; for example you may be a great baker of cakes, but not have a clue when it comes to accounting.  Computing skills will be essential for nearly all businesses, while management skills will be required in many cases.  List your skills, identify gaps in knowledge or expertise and consider how to fill these.  Some tasks may be delegated to friends of family, if they are willing.  You may decide to train in some important areas or consider outsourcing some tasks.  Planning on this level may seem unnecessary; but if you can play to your strengths from the start you’ll stand a much greater chance of success.

Financial Considerations

Computing and accounting systems are essential for most small businesses.  Unless you are setting up as an IT consultant or an accountant, you’ll probably only have limited skills in these areas.  Cloud computing applications are sensible choices for those with limited computer skills, offering simple and flexible software applications that are stored, backed up and maintained elsewhere (by people who know what they’re doing).  Cloud computing can also protect against disastrous loss of data or records, which can be a real saving grace!  Hiring an accountant from the start and using appropriate software is a sensible approach.  Simple cloud accounting software or online invoicing software makes managing your income and outgoings simple.  Cloud versions also save money as they are instantly available to your accountant, which saves time.

Careful planning may seem like the last thing that you want to do when considering setting up on your own for the first time. However, as in many areas of life, the devil is in the detail when it comes to running your own firm.  Working for yourself is probably the most rewarding way of working – we spend most of our lives earning a living.  It can offer great freedom; getting it right in the early days and having the tools to hand that you will need, can make all the difference between success and failure.

New Venture in Marketing

I’ve started working on a new marketing venture for a personal trainer (okay, it’s my wife – but I’m treating it to some extent how I would treat a client project).

The Background

My wife is a certified personal trainer and fitness instructor. Her basic business model is that she makes house calls for her clients, providing them with a personalized training regimen. She’s looking to increase her client volume.

So far, she’s built a website (for which she’s in the process of providing additional information) and advertised in a few local publications (a community newsletter and a community email list).

The Idea

While chatting with a friend, she was given the idea to start posting something a little different on her site – a weekly menu. The idea here would be to increase traffic to the site, by attracting people looking for ideas for their menu, and providing, in addition to a list of meals, the recipes used (with links to the cookbooks on Amazon).


The premise of the idea is actually pretty good.

While menus and personal training may initially seem to have little in common, one of the keys to being fit is healthy eating. While not a nutritionist, a personal trainer will often make sure that they are following a healthy diet. As such, people looking for healthy eating ideas may be interested in personal training, and the inverse is true as well.

Having linked the two ideas conceptually, the next step is to determine the value in the idea.

The returns from this idea come from a few sources.

  1. There are the links to the cookbooks where the idea for the recipe came from, which can result in affiliate revenues.
  2. An increase in the number of individual pages will help boost SEO rankings.
  3. Increase traffic can result in a higher level of familiarity with her target market – so that when someone needs a personal trainer, her name will come to mind.


The site was set up for this project over the past few days. We found a nice plugin was found for the recipes (Easy Recipe) which made it easy to create recipes, including providing a clean way to print the recipes with an ad for the site across the bottom. We created a page for the site that only displays these posts, and shared the first post on Facebook for some initial feedback.

The feedback has so far been positive, but the true test of its success will be in whether or not any of the visitors become clients. For that, only time will tell.

News and Updates

If you’ve been reading my blog for a while, you may have noticed that in the past month there were no new articles. Having received several comments on my lack of new content for the site, I felt compelled to provide an explanation.

The world of small business is massive, and there will always be a plethora of topics about which I could write. Over the past 2 years, I’ve covered, at least in broad strokes, many of these topics. When I caught myself starting to fall into a pattern of repetition, I knew it was time to take a fresh look at what I do here.

This site isn’t going anywhere – the articles may be getting old, but there are still many people who continue to find value in my writing. Writing 5 articles a week, though, can get a bit tiring after a while, and so I’m looking for other formats to present this material.

I’m not sure where this site will end up, and I would love to hear your ideas or suggestions. When I decide, the news will be posted here.

Turning Down a Sale

One entrepreneur who came on the show this week was lambasted for doing something few prudent business people would ever consider – they turned down a sale. This was not because they were to inundated with orders to be able to meet demand – on the contrary, they had essentially no other sales. They turned down the purchase order because it wasn’t the right distribution model for their business.

Pierre Beaupre and Jean-Daniel Nieminen from Quebec came on Dragons’ Den with their invention, an easy-to-install dual-flush system. Designed to be easy to install and priced at roughly 10% of what a comparable toilet would cost, the device allows any standard toilet to be easily converted into a high efficiency unit.

However, when they traveled to a trade show, they returned without any sales – because they were looking for distributors, not sales.

On the Den, the dragons frowned on their maneuver, because it undermined their credibility.

It’s one thing for a business which has an existing revenue stream to turn down orders, as it could negatively impact existing business. However, a business which has yet to see its first dollar of income should be eager to take on new customers, even if they are not ideal. Where the business has an outstanding debt to its founders in the amount of $100,000 this need becomes even stronger.

While Pierre and Jean-Daniel claimed that they turned down the order due to an inability to fill the order, the dragons were skeptical of their ability to lead a business at all. As was phrased on the show, had they come onto the set with a purchase order in hand, asking for the funds that would allow them to fill the order, they likely would have walked away with a deal.

A prediction was made on air – one year later, Pierre and Jean-Daniel would either have done exceedingly well, or incredibly poorly. It is unlikely that they would be anywhere but. Looking for their business, I discovered their site at and was unimpressed with what I saw. Low visit count, nothing out of the ordinary from a design perspective.

It’s looking like the Dragons made the wise choice to avoid business owners who couldn’t close a sale.

Dealing with an Offer

Sometimes, convincing a prospect to buy your product isn’t the hard part – structuring the deal is.

Take Jim, a software developer who wrote a small program that he was selling for a modest fee via his website and through direct sales. A company contacted him after using his application to find out if they could license the distribution rights to his software, or purchase it outright.

Since this is not a normal course of business, at least to date, Jim had to get a crash course in negotiating this kind of deal.

  • Will the deal be exclusive, and therefore limit his own abilities to distribute the application, or find other distributors?
  • What kind of support packages would the client want?
  • How is the deal to be structured – flat fee, annual rates, usage based?

The smartest thing to do in such a case is to put the onus on the buyer to come up with the initial terms. That is, politely respond to the buyer that you are interested, at least in concept, and ask them to provide a more detailed offer. Imply that there may be more available than the publicly available version – part of the up-sell that could create some room for leverage later on. Ask them to include a section for support and maintenance.

If the buyer has gone through this process ever before, then they will know how they would like to structure the deal, and the kind of terms they can expect to end up with. By asking them to provide an opening offer, you create room for an immediate acceptance if the offer is overly fair (unlikely, but possible), some haggling over the details if the general ideas are acceptable, the issue being with the number, or a flat refusal if the offer is so poor as to be offensive.

If the buyer has not gone through this process ever before, they will have no idea how to present a fair offer. However, they will now have to evaluate the costs of leaving you out of the loop, something they likely have already done before contacting you in the first place. This gives them their limit on how much they would spend on such a product or service, and they will work backward from there.

In either case, pushing the buyer to start the negotiations can only benefit you – if they ask you what your terms are, then you will still have to come up with a fee structure and pricing model, but it is more likely that the answer to your query will be exactly what you need – a starting point for the offer.

Understand Bureaucracy

In recent dealings with several large financial institutions, I learned about bureaucracy – and how to work with one.

Forced to enter discussions with them, I was overwhelmed by the volume of paperwork and the miles of red tape that seemed to be targeted at making my inquiries impossible to be answered. With one employee at an institution assuring me that I would get an answer, and others presenting all the complications that stood in my way, I wasn’t sure if a simple solution existed.

A phone call to a colleague suggested an answer. He directed me to a particular branch of one of these institutions, where they were under significant internal pressure to work with clients such as myself. As such, they had streamlined their own processes to make dealing with the inquiries swift and painless for the customers.

While they had no assurance that even with a positive answer I would give them my business, they were aware that negative experiences could drive me away. As such, they solved my real problem for me – they explored the inane rules that they had to follow, and found ways to circumvent them.

This is similar to the experience of Mr. Incredible, who, working for a large insurance company, explains to one of the clients how to circumvent the bureaucracy to get a claim processed. This branch took it one step further, though, and instead of telling me how to get past their systems, they did the work for me.

If you have to work through a bureaucracy, it may be worthwhile to find people inside the system who have ulterior motives for helping you. This can be in order to meet other internal quotas, a relationship with you (e.g. a friend), or merely disdain for the complexity of the faceless entity they work for. These people, working within the system, know how to get things done, and how to do so expediently.

There’s no getting around the paperwork or the red tape, but there are certainly ways to make the experience less frustrating. Knowing which particular forms need to be filled out, and which ones do not, can save you large amounts of time, and can lead to faster answers to the questions you’ve been tasked with answering.

Strategic Partnerships with the Competition

Does having competition make you uncomfortable? Perhaps you should consider making a strategic alliance instead.

Competition can be a scary thing, but it can also be useful, if handled correctly. Few industries or markets are only large enough for a single player, which means that there is little reason for anyone to be afraid of their competitors. Instead, if companies welcome their competition, they will soon discover that they can benefit one another.

For example, two web development companies might initially think that they are in direct competition. However, the reality is that both companies get much of their business via referrals, for which there is no competition. Having a partnership with another company means that each company can quietly outsource their extra work when they’re busy, maintaining a positive outward appearance to their clients.

This can benefit both sides, since idle workers are expensive, so accepting the work, even at a reduced rate, benefits both businesses. Likewise, the ability to get additional workers when needed on an ad hoc basic minimizes the expense of keeping a large staff.

There are other ways as well in which companies can not compete, for example, targeting slightly different markets, or offering variations on the same service. In either case, there can even be the ability to share clients, allowing each company to focus on what makes them different from their competitors, instead of getting hung up on what makes them all the same.

Question: Who Does Your Business Taxes

I know a few business owners who do their own taxes, and many more who pay someone to fill out their corporate returns each year. Given that the cost of corporate accounting can be significant, some owners have shied away from that route for as long as they can, while others quickly push their books over the accountants without a second thought.

Which group do you fall into, and why?

Calculating Salary

As noted in last week’s questions, assessing salary can be a challenging endeavor, especially if there are limited statistics available for the industry and region. However, there are some basic rules of thumb that can assist in running the calculation.

The first is to determine how much the position is worth to you, the employer. If by hiring someone to perform a particular role, you can generate $100,000 in revenue, then that position is worth some fraction of that. Once you factor in your own overhead, be it rent, taxes, collections, legal, and other aspects of your business which do not directly bring in revenue, this number usually works out to about a factor of 3.

Second, you need to look at the options your candidates have, and what types of positions they might otherwise be interested in. If you’re hiring a computer programmer, for example, but want him to work as a business analyst in addition to programming, you need to consider the salary he might be able to get as just a computer programmer. That number would then be used to determine the minimum salary level – since you require additional skills over comparable jobs.

Last, you need to look at what you can afford. If you cannot afford to pay a fair salary, then either you need to reduce the list of qualifications, or reduce the seniority such that the position becomes affordable. It will not help your business to offer a position at $75,000 per year when in reality you can only afford to pay $60,000. While you may scrimp to make the position work, you will end up doing your business more harm than good when you discover that you hired over your needs.