Here we separate fantasy from reality for consultants, contractors, incorporated professionals and Canada's other business owners.
Read the truth behind 5 myths about a One Person Business.
1. Running my own company means I'll have more free time
One of the major reasons a person takes an entrepreneurial step is to have more time with family. Unfortunately, running a one person business can be far more demanding than a traditional 9-5 position as an employee. While you will be your own boss, you do need to factor in that you are entirely responsible for the growth and survival of your business - no easy task by any means. Sick days, upset clients, and delayed projects inevitably fall onto your lap and can easily eat up your day. You are the master of your destiny but that doesn't necessarily mean you'll have more free time!
2. I can write off all of my expenses
People can be under the illusion that all personal expenses are covered by the company. Your car payments, business lunches, and computer purchase may be (partially) eligible...but your family vacation to California needs to be directly related to your business if you plan on writing off the expense. A good question to determine a real business expense - "Is this an expense I would incur if I were not in business?" There are specific government rules concerning the eligibility of business expenses. It's important to understand exactly what you are entitled to deducting.
3. Clients are always right
Of course you should strive for this ideal, but this age old adage is only a business priority within reason. Meeting client demands that are exorbitantly expensive, time consuming, and harmful to meeting other obligations should raise a flag. Clients are not always rational and unrealistic expectations can cripple your business. There will come a time when you need to fire a client and disprove the common myth that clients are always right.
4. I have to be active on all social networks
One of the most alluring myths is that business owners need to be active across all the major social channels. The truth is, if you don't know how to use the channel or your target audience isn't active on the channel, then you are harming your business. Why? Time. Your most valuable resource needs to be used wisely - don't spend an hour a day on Facebook if you have no strategy and thought behind your activity.
5. Health insurance is expensive and I don't qualify
Most insurance companies consider a group to be a business of 3 or more employees. This leaves the one person business owner in the difficult position of purchasing an expensive personal insurance plan, piggy backing off their spousal plan (and dealing with the co-payments and ineligible items), or paying for all of their medical expenses out of pocket with after tax personal dollars. All three of these options are grim. The truth is a one person business can find peace of mind in a Health Spending Account designed for specifically for your environment.
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