Becoming an independent contractor is possibly one of the best decisions you can make in life. Aside from escaping the 9-5 trap, the position makes you the boss of your future. You decide what you want to do, how to grow, and the best way to achieve that growth. If done well, it could introduce you into a world of endless rewards.
That said, however, independent contracting is also a rather risky path. Unlike employment where the boss pays at the end of the month, when you become an independent contractor, you must make ends meet on your own. If anything goes wrong, you’re squarely responsible and often have to bear the consequences.
For these reasons, it’s important to approach the jump to being an independent contractor with utmost caution. Below is a rundown of things you’ll need to get off on the right foot.
Let’s start with perhaps the most important tool in the independent contractor’s arsenal – a license. There are many reasons you need a license. For one, it is a mandatory requirement in most states. Additionally, clients are constantly being warned against unlicensed contractors. Working without a license may therefore cause you to lose a lot of good deals.
A Cash Reserve
Never go into independent contracting expecting to hit the jackpot right away. In fact, you could spend the first few months with only a handful of gigs from friends and family. Moreover, even after the business takes off proper, you might occasionally go through tough periods. Saving up would help you stay on your foot even in the toughest of times.
This should have actually come at the top of the list. You need a sound plan if you’re to succeed as an independent contractor. How will you find customers? How will you market? Who will do the marketing? How will you price your services? How will you handle claims? These are just some of the things you need to plan for from the onset. Fail to plan and failure becomes inevitable.
Yes, insurance can be costly. But, you are exposing yourself to a huge risk without cover. What if fire razes down your business premise and all the equipment therein? What if your commercial car is stolen? You might not believe it, but these things happen quite often. At the very least, you need general contractor liability insurance to cover you in case of an incident.
A Contractor Agreement Template
Finally, to protect your rights whenever you deliver services, it’s critical that you keep an independent contractor agreement template. Yes, the client will in most cases come armed with an agreement. But, what if they don’t? They could decide not to pay you and there’s nothing you can do. Keeping your own agreement templates ensures that such situations are completely avoided.
Now, You’re Ready!
With these five tools in hand, you can now take the leap and roll out your independent contracting business. Remember that it takes time to fully establish yourself; don’t quit at the first sign of trouble.