Co-working Spaces for the Self-employed

With a rising popularity in self-employment and freelancing, co-working spaces have become a popular phenomenon that has been embraced by those who work independently, but crave a sense of community in response to working in relative isolation.

Co-working spaces are essentially communal open-space offices and are an affordable solution to having a working environment outside of your home that is not a private office. They are popular among freelancers, entrepreneurs, start-ups and independent contractors.  A simple Google search will show that there are a wide range of co-working opportunities in most major cities in North America.

Besides being an affordable alternative to a private office, a co-working environment can provide many other advantages.

Escaping Isolation

Working in a home or private office can leave one craving face-to-face interaction from others during the day – especially those who aren’t clients! Self-employment can be isolating when your day to day activities are individual ventures. Co-working spaces provide the opportunity to work independently while being surrounded by others. Taking regular coffee breaks or having engaging in some water cooler gossip can help break up the day, create new friendships, and give you a chance to clear your mind from the daily grind of self-employment.

Creating a Community

Those who work in co-working spaces generally have the same values and influences, as they are usually made up of entrepreneurs and freelancers who are working hard to develop and build their business.  As the co-working environment is usually an open concept, it aids in developing relationships and finding inspiration from those around you. As friendships form, the community will naturally rally around each other and help each other out, building a mutual bonding through independent work that one can’t experience when working alone.

Networking

With a sense of community in the co-working space, networking opportunities will naturally follow. It’s great to find contacts that may be able to help you out in the future and for you to offer your services as well. Looking for a copywriter? Chances are someone in your co-working space has a recommendation. It’s much easier to go with a trusted referral rather than searching online and hoping for the best. Surrounding yourself with like-minded individuals can help your business grow and can build some strong and lasting relationships.  

It’s Good to Be the Boss

We all come to a crossroads at some point in our life - a defining moment to choose one path over another and accept where it leads us. After college I bumped around from job to job trying to build up my experience, and my resume, looking for the right opportunity to grow and be a part of something big. I hated it. I mean I really couldn’t stand it. Everything about holding a job made me feel rotten inside. It’s not that I’m averse to working hard, or that I think that having a job is wrong for everybody, it was just that after a decade in the rat race I discovered a few important things about myself.

Balance

The first thing that I learned was that working for someone else made me really tired. The simple expectation of adjusting my schedule to suit someone else left me lethargic and with a distinct palpable malaise that made me angry at life, and it seeped into my free time. Since starting my own business I actually work more than I ever have, but because it’s on my own terms I seem to have a lighter step and am able to walk between the raindrops which has helped me to enjoy my free time even more. The positive impact this has had on my health and wellbeing has also been noticeable as, because I no longer suffer from the same lethargy, I find myself using my free time to be more active as well as making time to cook a proper meal instead of settling for something quick and devoid of nutrition.

I Have Really Good Ideas

Within every company I ever worked for there was a hierarchy. It seemed odd to me that all the people higher up the chain of command were celebrated for having all of the best ideas. All of my contributions were immediately scoffed at and dismissed – until they were implemented and passed off as the boss’ big new idea. Now sure, there’s an argument for stick-to-itiveness, and that if I bided my time I could work myself up the ranks and start making the decisions. Maybe so, but I felt more burdened by the idea of seeing myself forced to pawn off the brilliant insight of an office lackey as my own because by the time it was my turn to get all the credit I was out of ideas.

I Don’t Value Security

I’m a risk taker and I always have been. I have gumption and believe that every time I get knocked down that I reemerge stronger than before. I know that there’s something comforting about having a job and knowing exactly where your next paycheck is coming from but it’s overshadowed by my own sense of excitement at starting something new and helping it grow. Having a steady job allows you to plan everything in advance and keeps you looking forward to your two-week vacation that was organized more than a year in advance, but being your own boss forces you take each day one day at time and keep your mind on what’s important right now.

Helping Others Grow

Within the hierarchy of all the companies I worked for I felt alone. I know I was supposed to emulate the work habits of those above me, but I felt like they kept their secrets of how they got to where they were under lock and key. Since striking off on my own, one of the most enjoyable aspects of my job has been mentoring and learning from those that work for me. Sure, I sign the paychecks, but in my efforts to build a successful small business it feels like it’s something we all share. It’s also very rewarding to share my expertise with my colleagues who might not have as much experience as myself.

I Did It My Way

Everyone is different, and owning your own business is incredibly challenging. It’s certainly not for the feint of heart, and before entering into something so profoundly life altering one has to really have a clear picture of who they are. I was ready to sink or swim, and learn the hard way, because I knew that if I was going to feel fulfilled I had to put myself in a work environment where I felt that I could operate under my own terms. The decision to choose the path that I did has made all the difference in my life and I never thought twice about retracing my steps.

Finding Your True North

It’s no easy task explaining to someone what it means to be a business. To anyone who’s grown up with the mentality that they have to work hard in order to find a job at a company, meeting someone who is a company can be a perplexing idea that they just have trouble wrapping their head around. For example, there are a number of concepts inherent in the established paradigm that just don’t apply to the self-employed:

·         Setting one’s own work schedule and hours.

·         Determining one’s own rate of pay.

·         Working wherever they please instead of a set space, or office.

For anyone who has been successful at being their own business it often leaves others wondering whether they do any work at all. Answers to the questions, “What do you do?” and “How much do you make?” are purposely vague unlike those of their counterparts who might prefer the lofty title next to the reputable company name that commands a predetermined pay scale with benefits. But anyone who has ever set out to become self-employed knows that there is something that working for a company can not offer – the freedom to determine one’s own sense of vocational happiness.

It’s understood that working for a company brings with it certain sacrifices. In exchange for financial security we are often bound to working on someone else’s terms (hours, corporate structure, defined tasks, vacation and sick days). As much as being self-employed might represent a departure from this framework, it is not without sacrifice. In fact, leaving the corporate world behind to strike off on one’s own is often one of the greatest sacrifices anyone can make because it is automatically associated with uncertainty.

Self-employment is not for the faint of heart. The early days of starting a new business are often so filled with ups and downs (mostly downs) that it can often leave people despondent, regretting their decision, and scouring the want ads to get them back in the rat race. And, while taking temporary employment to stay afloat isn’t out of the question, throwing in the towel should be only be considered as an absolute last resort.

We have a long established history of measuring success in dollars and cents, but there is a sea change occurring right now. People are beginning to realize that happiness is becoming a more accurate barometer of success and that living every aspect of life on one’s own terms is a critical factor in one’s perception of their own happiness. To this day there exists a misconception that people that are self-employed don’t work as hard as people who work a set number of hours per week, but the greater truth is that there now exists a culture of people who don’t define success by the established set of terms.

If happiness and success, therefore, are so nebulous, what does it actually take to drive a new, passion driven, business forward and allow it to achieve remuneration along with fulfillment? Only you can decide that. But, locking on to the values that you aim to hold as a business, understanding why you are doing what you’re doing, and demonstrating your resolve will reflect upon others that your business offers value. Passion is infectious, and if you love what you are doing, then the people you serve will love how you do it. It takes time and the determination to suffer through hard times, but if you know where you are headed then you will get there.

How the Self-Employed Can Save on Taxes

If you are like more than two million Canadians, you own your own business, either fulltime or part-time. Despite the sometimes heartaches of being self-employed, there are many advantages. Many entrepreneurs, though, are unaware of the various tax benefits available to them. In fact, running your own business can increase your after-tax income and contribute to family wealth.

Entrepreneurship and self employment promote a spirit of innovation, ultimately contributing to economic growth and vibrancy. As such, the government encourages entrepreneurship by taxing it at lower rates than regular income.

It is not uncommon for a new business to incur losses as it gets off the ground. These losses can be used to offset revenue from other sources, assuming you have a reasonable profit expectation as the business progresses. As your business begins to turn a profit, you can incorporate and the profits can remain in the corporation as a reinvestment in your operations. It is also possible to leave the profits in the business if you do not need a salary immediately. Thus, you can defer paying personal income tax. A salaried individual cannot schedule when to pay taxes. However, when you are self-employed, you can time payments to yourself when the tax payments are to your benefit.

Profits held in the corporation are taxable in the year they are earned. But, the corporate tax rate is low on the first $500,000 of active business income. While rates vary between provinces, all are below 20%. Personal tax rates on comparable amounts can be as high as 45%. It is also possible to pay salaries to family members in the business and have it taxed at their lower rates. Another possibility is to pay dividends to family members who own shares of the company and, thus, benefit from capital gains exemptions.

There are numerous possibilities for self-employed Canadians to benefit from management of taxes and income. All possibilities and options should be discussed at length with your tax advisor.

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