Being an independent contractor is the ideal job for many people. No boss to tell you what to do, the freedom to work on the projects you want to, and the chance to increase your income without having to wait for a pay rise.
Of course, it also has its downsides, including paying for your own health insurance and sorting out your taxes. But for many, the pros outweigh the cons.
If you like the idea of being a contractor, how should you go about making sure your business is a success? Here are some tips to help you.
Choose Your Business Type & Do the Paperwork
First of all, you need to choose a business legal type. There are many to choose from, and you need to research which is right for you.
You might want to form a limited liability company if you are an independent contractor, or you could start as a single-member LLC. But there are other types that may be more suitable depending on your specific role.
Hire an attorney and get their advice. You want to get off to a good start with your business, so this is advice worth paying for.
There will also be paperwork to do. You will have to apply for a tax ID number, and you might need to register for state taxes, which are different in each state.
You will also have to register your business name, and you should open a business checking account to keep your finances separate, which makes it easier to track your income and expenses.
Sort Out Your Taxes
You will have to sort out your taxes each year, and this is an area that can be complicated, especially when you are just starting out.
There is a lot to sort out, and by far the best way to arrange your taxes and avoid costly mistakes is to hire an experienced accountant.
Ideally, this will be an accountant with experience working with independent contractors. And it’s even better if they have experience working with contractors in your industry.
They will tell you everything you need to know, making the whole process a lot easier for you and giving you peace of mind that you are not doing anything wrong.
On top of that, they can help you to save money. They might help you to reduce your tax bill, which can very often make up for the cost of hiring your accountant.
In short, an accountant is a very good investment.
Research Insurance
Insurance is another good investment to make, and it’s another thing that you will want to look into when you are an independent contractor.
Whether you are a carpenter, plumber, electrician, or anything else, there are risks in your job. Customers can make claims even when you have not done anything wrong, and these can be expensive.
For example, your work could result in an injury, or a customer may be unhappy with the quality of the work.
Comprehensive liability insurance should be a strong consideration. A single claim could cost you a lot of money and even put your entire business at risk. Especially for a contractor, as they have to oversee various parts of the project, a general contractor insurance can be beneficial. Ensure that you have the right coverage to protect you from financial losses due to accidents, property damage, or dissatisfied clients. Having the right insurance can give you peace of mind, so you can focus on delivering high-quality work without constantly worrying about legal issues.
Look at quotes from different insurers and try to find one specializing in your area. For example, Next-Insurance.com provides insurance for contractors in a range of specialties, so get covered and enjoy more peace of mind.
Start Marketing Your Services
Finally, to be a successful contractor, you will have to generate a steady stream of business. This means you will probably have to market yourself to attract clients.
After a while, you may start getting repeat clients and referrals, which can bring in a lot of business. But to start with, you’re going to have to market your business.
There are many ways you can market a small business. For example, you could launch a website, start a blog, use social media, advertise in the search engines, advertise in local magazines and shops, get listed in local directories, and get a Google My Business listing.
If you’re new to digital marketing, platforms like Boosted Lab can guide you in optimising your online strategy. They offer services such as SEO, paid advertising, and content marketing to help you attract the right clients and build a strong digital presence.
Experiment with different techniques and find out which ones work for you. As you refine your marketing strategy, stay consistent to ensure the business keeps coming in.
Make a Success of Your Contractor Business
These are some of the main factors to keep in mind when you start up as an independent contractor. There is a lot to focus on, and it can take a little while before you find your feet. However, for many, the benefits are well worth it.
Start planning your business as soon as you know that you want to become a contractor. Sort out your taxes, work out how you will find customers, and then enjoy a successful and rewarding business working as an independent contractor.
