Employee or Independent Contractor?

How To Monetize Your Services And Excel As An Independent Contractor

laptop on counter overlooking a street

From Business 2 Community, Len April writes a great article about how to become a legitimate independent contractor.  He describes a push to entrepreneurialism in modern workers because of tightening corporate controls, work environments and the way workers are treated in large corporations.  He also distinguishes between independent contractors and “gig economy free agents” who have “autonomy, yet complete control.”  He provides excellent guidance on how to become a true independent contractor.  He writes:  

Becoming a true independent contractor means turning yourself into a small, separate business entity. The nature of the working relationship between ICs and clients is not without risk. By taking every precaution to establish yourself as a self-governing operation, you can mitigate exposure to these risks — for you and your clients.

  1. Create a business name and file it with federal, state, county and city registries to ensure legal compliance. Even when operating as a sole proprietorship, obtaining a fictitious business name (DBA) is highly recommended. Even better, if you can register as a limited liability company (LLC), you can distance yourself from claims that could impact your personal assets.
  2. Apply for an employer identification number (EIN) in order to open business bank accounts, get insurance, register for workers compensation and others.
  3. Open a bank account, separate from your personal accounts, in the name of your business.
  4. Purchase an insurance policy. Under ACA, this is now required. Failure to do so will result in tax penalties at the end of the year. Counties and states post their own mandates, so be sure to procure a plan that at least satisfies the minimum obligations.
  5. Apply for a contractor’s license from your county and/or state. In most U.S. states, this is mandatory.
  6. Create credit accounts for security and a few with local vendors you may need. The credit lines available to you initially could be low. However, after building a client base and growing your business, the credit amounts will become more reasonable.
  7. Design, deploy and maintain a web presence for your inbound and outbound marketing efforts. Exposure is great, yet to be effective you must post content regularly across your website, blog and social networks. If you lack the programming skills, locate a designer at an affordable rate — perhaps even a college student, friend or known associate.
  8. Establish a dedicated phone line and email address. If you don’t want to pay for a new data plan on your phone, consider a service such as Google Voice — it allows you to create a new phone number that links directly to every other number you have. To clients and prospects, it appears to be a dedicated business line.
  9. Market yourself. Although inbound marketing is one of the most effective tools in your arsenal, a good number of customers still respond to traditional outbound marketing: ads in local papers, telephone directories, magazines, lists, professional associations, community organizations, colleges and more.
  10. When you can afford to, consider retaining an attorney to advise you on all legal matters that could pertain to your business and its security….”

He also provides a way to calculate how to calculate the billing rate for an independent contractor.  Read the full story at How To Monetize Your Services And Excel As An Independent Contractor.

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