Everyone wants additional income. If you have some time, skill or talent, or maybe a spare room, why not have a sideline? A sideline (or side hustle or side job) is a service or product you provide to earn money while you have regular employment. It can also be a smart way to test if a business idea will be successful without having to quit your job (and endangering your main source of income). Who knows, you might be able to grow your small business into a large enterprise later on.
Here are a few ideas for a sideline or small business:
Do you write, design, repair equipment or know basic accounting? You can offer these services on a contractual basis. A freelancer is considered self-employed and can be classified as a sole proprietorship (an unincorporated business owned by an individual). This means you don’t have to register your business unless you want to or you if take in a partner. As in any business, you will have to report your earnings. For details about payment of taxes, registration of GST/HST and relevant CRA forms go to: Sole Proprietorship.
Renting out a room
Tutoring/babysitting/lawn mowing/snow removal
Do you have a neighbor who needs help with reading, math or English? Offer tutoring services. Parents of young children may also need the help of someone to watch their kids for a few hours. You can do this if you have free time. And if you are handy with the lawn mower or snow shovel, you can do some maintenance and clean up. These kinds of services often charge by the hour. To know how much to charge, go to the Job Bank. You can also check current commercial rates. Remember to adjust your rate depending on your experience and other considerations (such as how well you know your neighbour).
If you have a spare room or if you don’t use your basement, you can take in a boarder. Most rooms for rent in Manitoba also include utilities such as hydro, internet/cable connection or laundry facilities (washer and dryer). You may also have to share spaces like your living room and kitchen. Read Rental Property and By-Law Compliance in the City of Winnipeg for more guidelines and Accommodation sharing to know the income tax implications. Be familiar with the rights and responsibilities of a landlord from the Residential Tenancies Branch. Even if shared accommodations are not covered by the branch, you’ll be able to learn about issues, obligations and remedies that landlords often face.
Keeping things legal
Whatever your side hustle is, make sure to offer high quality products or services. Remember that you are competing with bigger businesses so always be honest and reliable. Be aware of laws or regulations that you need to follow and those that protect you before you start. Under-the-table transactions are not only risky, they harm everyone, even yourself (read The underground economy: Be part of the solution). It is only right to report and pay taxes on any income that you earn. You also have the right to deduct business expenses from your taxes depending on certain conditions. Read Home based business tax deductions to know more. If you charge GST/HST on the products or services you provide, learn how to go about it by watching this webinar: What you need to know if you sell taxable goods and services.
Tax tip: Keep all receipts related to your freelance or home-based business. Keep a logbook to record all the details, including receipts you have issued for your services. These will come in handy when it’s time to file your taxes. Purchases and business expenses must be substantiated with a sales invoice, agreement of purchase and sale, receipt or some voucher that supports the expenditure (CRA). Go to Licenses and permits to learn about business licensing and links to guidelines about maintaining your business records from the CRA.
A side business, even a small one requires time and effort. Some (like lawn mowing) are labour-intensive. It could cut off considerable time for rest and recreation. Manage your time carefully before you take on additional work. What’s the point of earning more money if you will be sick and tired most of the time? Read 5 habits to help you achieve work-life balance for more tips.
Sources: Start and grow your business, Government of Manitoba; How to define Business Income and Canadian Income Tax, Canadian Income Tax for freelancers, and What is a sole proprietorship? Susan Ward, the balance. Accessed July 9, 2019.
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