Independent Contractor versus Employee

Becoming an Independent Contractor

You may come to a point where you would like to become an independent contractor. Going off on your own, and being your own boss, is one of the most exciting experiences a field worker can accomplish. But, those thinking about taking this next step must realize becoming an independent contractor comes with a lot of hard work. You will often struggle to find free time, so you must stay organized to balance your work & social life, or you may find yourself working around the clock.
 
The transition is a big step, you must have an increasingly broad focus, rather than having a sole focus on the physical work of a job. You will have to consider things such as inventory, purchasing, money management, funding, resource management, human resources and more. Contractor Talk has made a handy list of tips for those ready to make this big career change:
 
Know Your Legal Needs
There are certain legal requirements for working as a contractor and those needs vary from jurisdiction to jurisdiction. Do some research to find out if you’ll have to be bonded, insured or both. What type of insurance are you legally required to carry? You’ll also need to register yourself as a business and file the appropriate paperwork if you’re working under a business name instead of just your name. Having the appropriate documentation and satisfying legal requirements prior to going into business for yourself isn’t just recommended – it’s a necessity.
 
Make a Plan
A business plan isn’t just necessary when you’re filing for a loan or grant – you should have one as a matter of course. Spell out what your goals are as a business and where you hope to be in a year or more down the road and how you plan to get there. What needs must you fulfill in order to get your business off the ground and how do you plan to meet those needs? Write out an informal business plan that will lay the framework for a formal one should you need it for investors, creditors and more.
 
Your plan doesn’t have to be set in stone. Plans change over time as needs arise and goals evolve. Revisit your business plan from time to time and make any adjustments as needed.

 
Evaluate Your Strengths and Weaknesses
As an independent contractor, you’re going to have to do it all. And just because you can do it all doesn’t mean you should. Take stock of your skills, abilities and time. Pick the tasks you’re best at and delegate or outsource the rest. You might be the best person to refinish a customer’s roof, but if you aren’t tech savvy, don’t try to build your website and maintain your social media presence by yourself. The same should apply for taxes, record keeping and fielding client phone calls. Sometimes it’s worth hiring an outside professional.
 
Hone Your Communication Skills
You are the face of your business, online, over the phone and in person. It’s essential to communicate with people clearly and effectively. If your speaking skills aren’t up to par, practice in front of a mirror to perfect your skills and improve your confidence. If you aren’t comfortable speaking on the phone, write out a go-to script for fielding inquiries from potential clients. If your grammar, spelling and punctuation could use a little work, brush up so that you can communicate online and on paper. The more effectively you communicate, the better your business will run.
 
Be Honest with Yourself
Perform a self-evaluation. For example, are you expanding into business for yourself because it’s something you want to do or because you think you’ll end up with a bigger paycheck? If it’s the latter, going it alone might not be the best choice. Working for yourself doesn’t necessarily mean more money – especially at first.
 
Businesses take time to build, especially if you’re starting out cold and possibly at the bottom. When working for yourself, you answer only to yourself unless you have a partner. This can be a relief at first, but there’s no guaranteed paycheck unless you have another source of income. At first, there will likely be no guaranteed client base, which means no surety of steady work. There will be no paid time off and no sick days without a backup plan. If you’re busy, you can’t take time away even if you want to without subcontracting to someone else.
 
Anticipate how you’ll handle these problems and decide whether you really, truly want to work for yourself. Working solo and owning your own business can ultimately result in great rewards, but it often takes resolve, dedication and can involve financial risks. Don’t quit your day job unless you’re completely certain that it’s something you want to do for the right reasons.

Posted in Education and tagged , .