Money & Career

How to set up a freelance business in Canada

By: Helen Racanelli

© Author: Canadian Living Credits: ©

Money & Career

How to set up a freelance business in Canada

By: Helen Racanelli
What's more daunting than starting a freelance business from scratch? There are the income implications to think of, not to mention concerns like growing a client base and marketing.

"There is always trepidation when you start an entrepreneurial business," says Amanda Burke, owner of Sew Funky Monkey, a small Canadian retailer that sells handmade stuffed animals. "The questions and anxiety are endless when you're at the very beginning," she says. Among the questions Burke has asked herself: Will I get noticed? Does my product or service provide enough value? How much will the startup cost? When will I start making money?

Having a less than steady income and facing the prospect of economic peaks and valleys is the main reason people fear starting a freelance business, says Dominik Loncar, entrepreneur-in-residence at Toronto-based Futurpreneur Canada, a nonprofit dedicated to helping entrepreneurs ages 18 to 39. For those who have made (or are contemplating making) the jump to freelance or entrepreneurial life, here are some basic considerations.

1. Make sure you satisfy three requirements

"There are no shortcuts to running a sustainable business," says Loncar, who teaches and mentors entrepreneurs. These are the three fundamental questions he says you should ask yourself:
Question #1: Do you have paying customers?
Question #2: Do you have a contact list of potential paying customers?
Question #3: Have you talked to potential customers?

2. Figure out which stage you're in
"Act your stage," says Loncar. "Figure out where you want to be, where you are now, and then decide what the next step is, which will help you decide what to do next." Identify your customers and product, and decide what the value proposition is. You might be brimming with excitement to create a logo and a website, but there's no point in spending money on advertising and web development if you haven't figured out these basics, says Loncar.

"Make a decision if you want to be a freelancer (one person operation) or be an entrepreneur (have people working for you). Plan accordingly."

3. Check out what the Government of Canada has to offer
There are many federal government programs helping freelancers and entrepreneurs that you might qualify for, such as micro loans if you're in Western Canada, and startup financing elsewhere. It's also well worth the time to check out Service Canada's site. If you're 39 or under, the organization Loncar represents, Futurpreneur Canada, is also a valuable and free resource that has a partnership with the Business Development Bank of Canada.

4. Register your business

Determining whether you need a GST/HST registration number or whether you need to register your business with the government is probably the least appealing part of becoming a freelancer or entrepreneur, but it's a must. "Generally, you do not have to register for GST/HST if your worldwide revenues are $30,000 or less, as we consider you a small supplier," notes the Canada Revenue Agency's website. Even so, it might be best to directly consult the Canada Revenue Agency to be sure. Its website has a comprehensive collection of responses to frequently asked questions and you can call if you're unclear.

5. Invest where it makes sense
Burke, who bills herself as "seamstress and head Funky Monkey," hasn't shelled out big bucks on a fancy website yet, but she has invested in technology -- a Square device -- that will help her earn point-of-sale money at craft shows. "Square is a tiny device that connects to your smartphone, iPhone, tablet or iPad via your headphone jack. Using its app, you can accept credit card payments," she says.

Although Burke has to pay a percentage of each transaction to Square, she says it's worth it because she never misses a sale from customers who don't have cash on hand to buy one of her adorable sock creatures.

6. Leverage social media

Freelancers have to spend time marketing and building a client base, says Loncar. One free way to do it -- perfect for little cottage industries -- is via social media, which is pretty much the new word of mouth.

In Burke's case, Facebook helped her fledgling business get a boost. "In early December 2012, I made three monkeys for each of my kids for their stockings. I posted the pictures and my Facebook blew up! Between early December until the 23rd, I made and sold 10 of them," she says. "This past Christmas, again, after posting a couple cute pictures, my Facebook was on fire with requests and in 10 days I ended up making 27 monkeys," she adds. Twitter and Instagram are other accessible, popular ways to promote products.

7. Create a portfolio for your freelance business
If you want to grow your business beyond word of mouth and your social circle, you need a portfolio, which can be physical (a document) or virtual (online). "Although there are websites for freelancers to post their services, the best rule of thumb is to develop a portfolio that showcases your work -- your calling card," says Loncar. "Use the PIR method," he advises. Here's how to do it.

Problem: What did the client want done?
Intervention: What did you do to solve the problem?
Result: What did the client say or what improvement was made. For instance, were there increased sales, or did you provide clarity in messaging?

Running a successful freelance business
requires hard work, risk and vision. But the reward for those who undertake this endeavour can be enormous -- not just financially but even spiritually.  "I get to live my passion every day and make people smile," says Burke.
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Money & Career

How to set up a freelance business in Canada