Friday, June 26, 2015

If You Are Consdering Self-Employment

I overheard a not so young fellow in the shopping mall the other day, discussing with his friend the pros and cons of leaving his present employer and striking out on his own, starting his own small business.

I don't know the fellow at all, but the things he was saying made me want to go up to him and talk a bit more about his plans.  Of course I didn't do that, but I hope he has considered the following:
1.  if he is self-employed in Canada he will have no company pension plan to fall back on when he is retired.  He will be dependent upon his 2 small government pensions and whatever savings and investments he is able to have success with on his own between now and then.
2.  there is no unemployment insurance for him.  He will not be allowed to pay into EI as a self-employed person.  If he finds himself unable to work prior to retirement he will have to utilize Social Services as his EI replacement and some people find that too humbling to have to consider even when they are unemployed and desperate.  It is often even more difficult to receive than EI.
3.  records of every single financial transaction must be scrupulously recorded and backed up with all available paperwork as government audits of the self-employed are extremely detailed and can be extremely painful emotionally and financially.  Contracts with clients must be gone over by lawyers with a fine toothed comb to protect both the clients and the self-employed.  The days of a simple handshake between contractor and client to secure the details of a contract are long over and in our litigation happy society it is costly but necessary to have contracts that are complete to the most tiny, seemingly least important clause.

Why what some complete stranger I merely overheard in the mall does with his employment situation has any interest for me I have no idea, but for some reason I felt led to pray for the man that all will go well for him and that he will do his research before he takes such a big step.  Self-employment is far more difficult to maintain than it was when my husband and I were running a business.  We were in the process of closing down and going on to other things when the rules and contracts for self-employment began to tighten up, but it was difficult enough even in the "old days".

I wish the man, whoever he is, all the best should he venture out in that direction.

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