March 2021

4.4 Self-Employment Supports

Summary of Directive

To describe the goods and services that clients may access to help them become self-employed or start a business.

To identify requirements for ODSP employment supports funding where the goal of the client is to be self-employed.

Legislative Authority

Sections 32 (1) of the ODSP Act 1997
Section 4 of the Regulation

Intent of Policy

To provide clients with the services and supports needed to achieve sustainable, competitive employment through self-employment activities.

Application of Policy

ODSP employment supports will provide the supports required by a client whose competitive employment plan identifies a goal of self-employment. Service providers with expertise in the area of self-employment will help the client develop a self-employment business plan, in addition to the employment plan, and provide the supports needed to assist the client to implement their self-employment business plan and generate revenue.

Self-employment supports may include training in financial management and budgeting, assistance with marketing strategies, mentoring, business tools, equipment and supplies, licenses/certification, etc. As with traditional employment, service providers may offer the services themselves or purchase them from other suppliers.

Regional offices will contract with self-employment service providers in their community (e.g., small business advisory services such as Ministry of Economic Development, Job Creation and Trade’s Small Business Enterprise Centres, municipal business advisory services, community college business centres, individual service providers specializing in self-employment services, etc.) to assess the viability of the clients’ business plans and to support self-employment/business development, as required.

Self-Employment Pathway

Where an applicant expresses interest in starting a business, ODSP staff will help the applicant determine if they are ready for self-employment by looking at whether the client has the following factors:

  • has a business idea that appears reasonable and is aligned with local labour market conditions; is aware of, and committed to, meeting all milestones (e.g. completing a self-employment business plan, generating and reporting business income, etc.);
  • has basic skills required to prepare, maintain and submit business income and expense records; and
  • is aware of, and committed to, the activities required to successfully start and run a business.

After this discussion, the applicant will decide whether they are ready, motivated and committed to pursuing self-employment. The staff will assist the client in selecting an appropriate service provider with self-employment expertise.

Applicants who feel they are not ready or not capable of proceeding towards self-employment can voluntarily withdraw from the employment supports program. ODSP staff should discuss with the client whether they are interested in pursuing traditional employment or provide alternative options to employment, as appropriate.

Once the client has selected a service provider, the service provider will complete an assessment of the client's readiness to undertake self-employment by considering the individual's entrepreneurial, financial, business and marketing skills and experience, as well as the initial business idea. This review will determine if the client is ready to pursue self-employment or if they should be looking at other alternatives e.g., preparing for traditional employment, upgrading education and/or skills, etc.

In addition to the regular employment plan, the service provider will help the client prepare a self-employment business plan outlining the viability of the venture and the supports necessary to become self-employed. Service providers will receive an interim payment for assisting the client to develop their self-employment business plan. The self-employment business plan should include:

  • business idea/description;
  • client's business knowledge and skills (e.g. training, experience, organizational, communication, and presentation skills etc.);
  • market research (e.g., demand for product or service, potential customers, etc.);
  • goods and services needed by the client to start or maintain the business;
  • financial considerations (business cash flow, financial projections, sources of funding);
  • access and accommodation needs of the client; and
  • recommendation on the viability of the business based on the above analysis.

Service providers will assist the client to implement their self-employment business plan by providing basic training in money management and recordkeeping and the supports needed by the client to begin generating income from self-employment activities and continue to grow their business.

Service providers are eligible to earn job placement and retention fees when the client has implemented their business plan and started generating net business income.

(See Directive 5.1 Employment Supports Funding)

Clients are required to submit information on their business income and expenses to their service provider on a monthly basis to calculate net business income. The ODSP income support "Income and Expense" form can be used for this purpose for both income support recipients and non-income support recipients. The service provider may verify the information submitted on this form by reviewing the client's business bank account records and/or providing copies of business invoices and receipts.

(Note: The cost of items provided/purchased by the service provider are not considered an allowable business expense when determining the client's net business income or for income tax purposes.)

Clients participating in self-employment activities may also require exceptional work-related disability supports (e.g., sign language interpreters, assistive devices and adaptive technology) to operate their business.

(See Directive 4.3 Exceptional Work-Related Disability Supports)

ODSP income support recipients who earn income from a business may continue to be eligible for income support, depending on the amount of income they earn from their business less allowable business expenses. Service providers should advise ODSP income support recipients of the ODSP rules for calculating business income and of the benefits that may be available to them through ODSP income support.

(See ODSP Income Support Directives - Sections 5 and 9)

Self-Employment Resources

Self-employment information and assistance is available from a variety of sources including Employment and Social Development Canada (ESDC), the Ministry of Economic Development, Job Creation and Trade, Community Futures Network of Canada, general business associations, community agencies and private sector service providers offering small business planning assistance.

There are also numerous web sites that provide information and tools for people starting a small business. Service providers should be aware of the resources available to help clients interested in being self-employed to access these supports in their communities.

Related Directives

2.1 Program Eligibility
3.1 Client Pathway
4.3 Exceptional Work-Related Disability Supports
5.1 Employment Supports Funding
6.4 Performance Measures and Information Reporting