Sole Proprietor vs Incorporation for Independent Contractors

As a self-employed independent contractor you're an entrepreneur and a risk taker. You control your destiny by developing your skills, producing exceptional work, expanding your networks and building a personal brand. If you add excellent communication skills to your repertoire then businesses will compete to hire you and you'll have more work than you can handle.That's why some people choose entrepreneurship, because they feel that the rewards outweigh the risks.

How do you know when it's time to get incorporated? Here are some points to consider as you weigh the pros and cons of incorportating your business:

1/ Cost
One of the biggest advantages of sole proprietorship is that setting up and administering the business is comparatively easy and inexpensive. It costs $1000 or more to incorporate your business depending on who you hire to assist you with the process.

2/ Liability
One of the main advantages of incorporation is limited liability. A sole proprietor assumes all of the liability for the company. As a sole proprietor your personal assets, such as your house and car can be seized. As a shareholder in a corporation, you are not responsible for the debts of the corporation unless you have given a personal guarantee.

3/ Corporations Carry On
Unlike a sole proprietorship a corporation has an unlimited life span. The corporation will continue to exist even if the shareholders die or leave the business.

4/ Tax Credits
Income tax rates are lower for Corporations than for personal income. Using tax planning, the tax burden can be reduced by earning income through a Corporation, due to the lower corporate tax rates.

5/ Income Control and Tax Deferral
If you are incorporated, you have options to determine when you personally receive income from your corporation. Being incorporated allows you to report your income at a time when you will pay less tax. You may be able to realize tax savings if you receive your income at a time when you are in a lower tax bracket or if taxes have fallen.

6/ Income Splitting
With a Corporation, there exists the opportunity to pay shareholders salary, dividends or a combination of the two. Your spouse and/or children could be shareholders in your corporation giving you the opportunity to redistribute corporate income to family members with the lower incomes taxed at a lower rate.

7/ Perception
Some people perceive corporations as being more stable. Having Ltd., Inc., or Corp. as part of the company’s name may help you attract business.

8/ Paperwork
Incorporation brings with it extra accounting and paperwork. Corporations must maintain minute books, corporate bylaws. Other required corporate documents are register of directors, the share register and the transfer register.

9/ Non-Calendar Year Ends
Corporations have the ability to choose their year end and not be restricted to a calendar year-end as with a Sole Proprietorship. This opens up the possibility of bonus deferrals. Choosing a year-end may be better for year-end paperwork filing should your business be busy at the end of the calendar year. By incorporating you can choose to have your year-end fall during a slow period.

Conclusion
I‘ve outlined some of the advantages and disadvantages of incorporation versus sole proprietorship but what’s the bottom line? Is getting incorporated worth it or not? I recommend that you discuss your personal situation with your accountant and lawyer before deciding.

Further Reading:
Business Registration in Ontario
How to Incorporate Your Business
10 Job Networking Strategies to Consider if You're a Newcomer to Canada
3 Resume Publishing Tools to Pump Up Your Job Market Value

Written by: Tim Collins
Stafflink.ca
timc@stafflink.ca
www.twitter.com/stafflinks
www.linkedin.com/in/timrcollins

Diary of a Delusional Laptop Shopper

Sometimes you get what you pay for. At least that was true for me when I bought some new laptops for our office last week. Maybe you fall into one of these categories:

• Bargain Hunter: You want a decent system for a great price.
• Power Ranger: You want the fastest, most kickass system money can buy.
• Empowered Consumer: You want a quality system with excellent support.
• Apple Devotee: You just march into the Apple store and pick the sexiest Mac your credit card can handle.
• DIY Ninja: You build your own computers from scratch with components ordered online from a secret network of suppliers.

Me? I thought I was a power ranger but a recent mistake proves that I’m more of a delusional bargain hunter.

I've purchased many Dells over the past 15 years and until recently I was an enthusiastic cheerleader for Dell. Over all our Dell computers have been quality machines that lasted many years without issue. I've rarely needed to call for technical support. But with the last two Dell laptops I purchased I've noticed a change in the quality of their customer service. On two occassions an automated solution Dell offered us was buggy and usuable with our system. So I'm ready to take a chance with another brand. Here's my story:

It’s my lucky day. It’s back to school season, computers are on sale everywhere and I need to replace some old computers at the office. I'm in Staples shopping for a geometry kit when a shiny Acer laptop catches my eye. I check out the specs: 2.2 GHz Intel processor, 4 GB memory, video cam and OMG it's only $399! It's way more computer than the Pentium IV Dells I bought 5 years ago for less than half the price I paid then. What a steal!

A sales rep approaches me at that moment. He has me at "hello." But when he mentions that Staples services their computers on site I'm really sold. Two days later I proudly present new Acer laptops to our recruiters.

Red Flag 1: One of the Acer keyboards freezes. It seems to be a "one-off" so we reboot and carry on.

Red flag 2: The other Acer freezes three times in one day. I bring the repeat offender back to Staples. The rep who originally sold me is there. I'm in and out of the store within 15 minutes carrying an identical replacement Acer. Problem solved, or so I thought.

Red Flag 3: I read Joe Stoll's blog “How a $400 PC from Future Shop for Your Business Can End Up Costing You Double.” Uh-oh.

On the weekend I notice that The Shopping Channel is offering special build of Dell Inspiron Laptops for $699. I’m mesmerized by the rainbow of glossy colours they come in. So tempting. But I decide to wait and see what happens with the Acers.

On Tuesday the replacement Acer freezes several times. Maybe I should buy those Dells from The Shopping Channel after all? My staff selects colours-I'm a bit iffy about the purple. A voice of wisdom (Tim Collins) warns me not to buy the Dells until after I return the Acers to Staples.

When I march those defective Acers back into Staples that evening, Todd Roberts, a divisional sales manager, is there to help out. He takes the Acers back without batting an eye. Then he refers me to his #1 sales guy who up-sells me (of course). You get what you pay for right?

I’m an easy mark but it feels like a win-win. After experiencing Staples' excellent customer service with the defective Acers, and knowing that they do most of their repairs onsite, I feel okay about buying HP Pavillion DV6's for $699. I’m impressed with the technology team at Staples (Dundas and Winston Churchill, Oakville). Even when they made mistakes they took responsibility for fixing them. Time will tell but so far it looks like my story has a happy ending.

This morning Todd drove all the way from Staples Oakville to our office in downtown Toronto and personally delivered two gorgeous new HP laptops to our office. So far so good. Our recruiters love their new HPs.

What’s next if my rosy relationship with Staples and HP changes for the worse? I might be forced to become a DIY Ninja and build my own computers from scratch. How hard can it be?...ya right =)

Related Post: Got any old computers lying around?

Written by Laura Upcott
http://stafflink.ca/
laurau@stafflink.ca
http://www.twitter.com/lauraupcott
http://ca.linkedin.com/in/lauraupcott

7 Ways Technical Tests Sabotage the Hiring Process

Do technical tests actually weed out the best candidates? Poorly designed tests can alienate candidates and cause you to reject the candidates with the greatest potential. My purpose here is to examine the common pitfalls of technical testing that may be sabotaging your hiring process.

As an IT recruiter you can't be an expert in every technology out there. How do you ensure that IT candidates really understand the technology and have what it takes to do the job? Technical skills testing, right?

Believe me, I wish it was that easy. Unfortunately technical testing for job screening is not as objective and accurate as it appears. Here are seven things to keep in mind when you use technical testing for job screening:

1) Test results don't reflect what it really takes to be successful on the job. Consider the intangible qualities that your most valuable technical employees bring. Are you looking for someone to help your team develop an innovative technical solution? Creativity, team-work, analysis and synthesis of existing solutions, out-of-the-box thinking, and dogged determination may be essential job requirements that won't be reflected in the test results.

2) Technical tests reinforce out-dated stereotypes. We all know the myth that technical people (techies, geeks, gurus) have brains that work like computers. Computers follow rules. Programmers, developers, analysts and architects figure out how to hack, collaborate, stretch and extend the rules to create new solutions. Programming is a literacy skill and an art. It takes both sides of the brain to do it well. The most in-demand technical gurus I meet are generous and driven creative problem solvers with extensive communities of peers in their field. I've yet to see a test that evaluates how a coder utilzes both sides of her brain to create new applications or extend a platform in new directions.

3) Badly worded questions. Some tests have ambiguous questions with multiple correct answers. But the anwser key only accepts one particular response. Sometimes the test taker knows more about the technology than the test writer/marker. The test taker might propose an alternative solution that the marker doesn't understand so it's marked wrong.

4) The test is out-dated. The test may not be up-to-date with the current state of the technology. Responses that were valid when the test was written a year ago may be incorrect now. A typical example of this is when a tester asks a job applicant to debug a piece of programming. A variety of solutions are possible but only one is known to the tester. So when the test taker proposes a solution that is up-to-date with current best practices his response is marked incorrect.

5) Irrelevant questions. Some tests ask people to define obsure technical terms. If you need to know the definition of a term while you're on the job, you'll just go to the knowledge base and look it up. When people develop technical solutions on the job they usually have free reign to reference any resource they need. People don't memorize manuals. Why bother when it changes every time the technology get updated?

6) The test taker might not take the test seriously. Imagine this: You're an in-demand developer who's spent years building a career in your field. You're at the tailend of a contract project you've been with for about 6 months. It's 9:40 am and you've just finished an interview for a job you don't really need. The interviewer asks you to take a technical test. Sure, no problem, but they're waiting for you back at your current project. So you flip the test off as quickly as possible and high-tail it out of there.

7) Test-taking anxiety. Before I ventured into IT staffing I was a teacher so I've seen the effects of test anxiety first hand. Many people freeze in test situations yet they are very capable of performing in normal working conditions. These people will seldom ask for accommodations but they may have excellent experience and qualifications for your role.

How do you determine when technical testing is appropriate? Consider these questions: Does this job require someone who can develop a new solution or push out the boundaries of an existing solution? Then you might want to put more emphasis on the candidate's reputation, references and experience (portfolio) when evaluating them for the job.

Does the test reflect the way people really work? Is the test up-to-date? Does the test allow for multiple solutions? Do you have a technical person who can back up the test results with a face-to-face technical interview?

I'd love to hear about your experiences with technical testing.

If you liked this article you might also be interested in reading:
Technical Interviews: A Survival Guide for Recruiters

Posted By Tim Collins, President and Founder,

Stafflink Solutions Ltd

http://www.stafflink.ca/

timc@stafflink.ca

www.twitter.com/stafflinks

www.linkedin.com/in/timrcollins

What Motivates You at Work?

Does motivation come from within or can it be created with external incentives like money, recognition and career advancement? It's a key question for employers and employees. Motivated employees are happy employees which is good for business. So it's in everyone's best interest to create a work environment that motivates people to give their best.

Money is a big motivator for many people. But if you're living comfortably and can afford a few extras like beer or Callaway Woods, money loses some of it's pull. I'm motivated by money too, but I'm also motivated by helping people. That's why I write these blogs. It's the reason I enjoy staffing. I truly enjoy connecting employers with talented people who want to work for them.

Every person I place in a new job has the best intentions to make a valuable contribution. It's that adorable honeymoon stage. Everyone involved catches the fever and works a little harder. But how do you keep that energy and motivation going? Soon or later reality sets in. Maybe personalities conflict or the job becomes routine.

Does it have to be that way? I've noticed that some people maintain enthusiasm for their job long after that first blush of excitement. What does it take to motivate you to keep giving your best even after the reality of the job sets in?

• Performance-based bonuses?
• Flexible work hours?
• Opportunity for career advancement or promotion?
• Working with and for people you trust and respect?
• Opportunity to learn on the job, training and skill development?
• Opportunity to help others?
• All of the above?

Did I miss something? If I was your employer, what could I do to help you stay motivated and committed to doing a great job?

Please share your ideas in the comments, or take a minute to respond to my poll at http://www.stafflink.ca/#pd_a_3752594.

Thanks!

Related Articles:
Love What You Do
Balance Thursdays - Does Less Stress Equal More Productivity?
What's Your Superpower?
It's Time to Spring Forward
The Future's So Bright You Gotta Wear Shades

Posted By Tim Collins, President and Founder,

Stafflink Solutions Ltd

http://www.stafflink.ca/

timc@stafflink.ca

www.twitter.com/stafflinks

www.linkedin.com/in/timrcollins

10 Job Networking Strategies to Consider if You're a Newcomer to Canada

Newcomers to Canada frequently ask me how to get a job in their field. I wish I had a magic formula. You found your way to Canada. I'm sure it wasn't easy. You bring with you a treasure trove of knowledge, experience and potential. You also bring a determination to make a contribution and a fresh perspective that our economy needs.

I've seen countless people succeed in the same situation that you find yourself in now. So it is with sincere admiration that I offer these suggestions. I trust that you will find your way to the work experience you are seeking. And in the process you will enrich your community.

I talk to many newcomers who are established as highly-demanded professionals in their field. Usually I'm trying to recruit them for a job. At least 70% of our placements are people who've immigrated to Canada. How did they do it? Luck? Connections? A well written resume? Here are a few ideas you could consider in your quest to jump start the next leg of your career.

1. Reach out to people you know who've come to Canada and landed in good jobs. Ask them how the did it.
2. Informational interviews. Arrange to meet with people who are currently working in your field, not to ask for a job, but to ask for advice on how to break into the marketplace.
3. Participate in blogs and usergroups in your field. Make comments. Answer questions. Provide technical advice. Seek out opportunities to demonstrate your expertise and help others.
4. Mine LinkedIn. Complete your LinkedIn profile including a friendly photo. Network to find others on LinkedIn that you might know through a friend. Link to your personal blog/website or portfolio from your profile. Join special interest groups that are related to you field. Participate actively by starting discussions and commenting on other people's discussions. Promote others.
5. Participate in professional networking events like camps and meetups to get to know people working in your field.
6. Offer a free trial run of your services (aka volunteer work or and an internship) to entice people to give you a chance. This creates a Canadian reference for your resume. You don't need to mention on your resume that it was volunteer work.
7. Create a personal website to market your services. Use it as a platform to showcase your expertise and find work. Tell your story of coming to Canada - people love stories and they might be inspired to help you. Include a "Hire Me" or "Work with Me" link to tell people how to hire you. Add a jazzed up version of your resume or portfolio.
8. Blog about topics of interest to potential employers/clients and people in your field. Publish your articles on your personal website and broadcast links to your blogs on LinkedIn, Twitter, Facebook and and special interest groups where people with your skillset (including potential employers) hangout.
9. Communication skills. It's the one requirement you see on nearly every job description. If you find that people have difficulty understanding you in conversation, check out LearnSpeakLive.ca for information about free language instruction program in the Greater Toronto Area.
10. Be Persistent. Creating a personal brand is hard work. As you implement the above strategies you'll be "self-employed". That entrepreneurial spirit is popular with employers these days - especially startups and technology firms. Eventually you'll connect with an employer who will be delighted to hire you.

Please share your tips for getting established in a new job market. Did I miss anything? What works for you?

See also

• 3 Resume Publishing Tools to Pump Up Your Job Market Value
• Build an e-Resume Portfolio Site with WordPress
• Canada's Summer Job Market is Sizzling!
• Top 10 IT Skills in Demand 2010
• The “Canadian Experience” Myth Exposed

Posted By Tim Collins, President and Founder,

Stafflink Solutions Ltd

http://www.stafflink.ca/

timc@stafflink.ca

www.twitter.com/stafflinks

www.linkedin.com/in/timrcollins