Step 2: Decide what path is best for you


Here you are at Step Two of the Self Employment Explorer.

That must mean that you’ve decided to look a little more closely at self-employment as a career option.


In this section of the Toolkit you’ll get more information about what life is like for people who are self-employed. Taking time to read the statistics and facts will give you a better sense of what you’re up against – and what the great rewards are – of being self-employed.

Odds are there will be people in your life telling you not to risk starting your own business. Everyone who launches out on their own faces these well-meaning but negative folks.

Know that the concerns other people will express about you thinking about starting your own business come from one of two places:

  1. either they themselves don’t have the personality to run their own business, or
  2. they’re worried about how you’ll feel if you don’t succeed.
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Well, accept their concerns with thanks and use the information in this section to explain why self-employment could be a good option for you.

Once you’ve got an understanding about the world of self-employment, do the “Entrepreneurial Potential” questionnaire to move you another step closer to figuring out what kind of business you’d be best at running.

But first, let’s define some the words you’ll be seeing through the Toolkit, since they can mean different things to different people.


Small business:

A business is considered a “small business” if either it is run by a self-employed person with no paid help, or if it has fewer than 50 employees.


A microbusiness is simply a really small, small business. It’s any business that has 5 or fewer employees. Odds are that when you start your own company, it will technically be a microbusiness.

Employee versus Self-employed

It’s important to understand the difference between being an employee and being self-employed. Some companies try to convince people who work for them that they are not employees, but are self-employed contractors. They do this so that they don’t have to give you vacation pay or sick days or pay their share of employment insurance and taxes.

According to Canada Revenue Agency, you are self-employed if:

  1. you work independently and do not have anyone overseeing your work day-to-day
  2. you write your own pay cheques from money you earn for the work you do for clients
  3. you’re free to work for whoever you want, whenever you want
  4. you pay for all the tools and equipment you need to do your job
  5. you can hire other people to help you get your job done

According to Canada Revenue agency, you are an employee if:

  1. you take direction from someone who is considered your boss
  2. someone else decides how much you’ll be paid for your work and when you’ll be paid – and they write you a cheque
  3. you are not allowed to work for other people without permission from your boss
  4. another company pays for the tools and equipment you need to do your job
  5. you cannot hire other people to help you get your job done

Small business statistics

Lots of research has been done about self-employment in Canada. If you’re interested in all the details about self-employment in your province, link to the Resource section and you’ll find everything you ever wanted to know. Look on the websites that are listed.

  • In Canada in 2008, there were 2.6 million people who claimed self-employment income on their tax return. That means 15 out of every 100 Canadians is self-employed. If you decide to start your own business, you’re certainly in good company!
  • Each year, approximately 139,000 new small businesses are created in Canada.
  • Roughly 25 percent of small businesses operate in Canadian goods-producing industries; the remaining 75 percent operate in service industries.
  • On average, small business employees in Canada earned around $694 per week in 2007.
  • Failure rates for small businesses in Canada are high for the first three years and decline over time. About 70 percent of small businesses that enter the marketplace survive for one full year; half survive for three years. Approximately 25 percent of small businesses are still operating after nine years.

Disability statistics

The most recent research on disabilities in Canada was done in 2006 by Statistics Canada. If you’re interested in how common different disabilities are in your province, for young people in your age group (15 to 24 years old), check out these links.

Step Two

Now you know some interesting facts about small business, self-employment and disabilities in Canada. It’s time to measure your own entrepreneurial potential.

This self test is 50 questions that will help you understand what your entrepreneurial motivations, aptitudes and attitudes are. In other words, why you want to be your own boss, what skills you have to run your own business and the way you think about life.

You’ll do this step online at the Business Development  Bank of Canada website.

Exercise 2a: measure your entrepreneurial potential


When you are ready, click here to continue on to Step Three:  Showcase Your Strengths