Many people talk about starting their own business, being a consultant, or wanting more flexibility in their life, so they begin to consider becoming an Independent Contractor (IC).
Consider why you want to be an IC:
- Do you need more flexibility in your life?
- Do you want a better work/life balance?
- Have you moved to a new state and need a new job?
- Are you returning to the workforce after having been away a while?
If any of these items speak to you, you may benefit from becoming an IC. These are strong reasons for taking an IC position that may help you to accomplish your professional and personal goals.
As an IC, you may make more money than an employee because a company is willing to pay more for a professional with specialized skills. They also don’t have to pay for benefits, unemployment compensation, or taxes. As an IC, you will select the benefits you need and find a broker that will sell them to you at a cost you can afford. Popular among many contractors is the government’s Affordable Healthcare Plans you can view at Healthcare.gov. Accident insurance should also be purchased in case you are injured at a client’s worksite.
Most importantly, ask yourself if you have the required expertise to be successful as a self-employed person.
- Are you able to deliver service to your client that they don’t have in-house?
- Are you valuable because you are more proficient and can accomplish the goals the client wants more readily than their employees.
- In some cases, clients have immediate needs and don’t have time to train their own employees to do the job.
These are just some of the reasons clients’ staff positions with contractors.
As an IC, you have the ability to accept an assignment or not based on whether you want to do it or can meet the deadlines set forth in your client’s agreement. You will decide your own schedule, and choose the clients with which you would like to work. Some people like the variety of being a contractor and others want to see if they like an organization before making a commitment to join them. Conversely, an assignment might last for a few weeks or months and some people find it exciting to move on to another project and work for different clients. They may like the freedom of choice they have when deciding what they would like to do next.
There are some excellent questions to ask yourself as you consider becoming an IC.
- Can I motivate myself to find work and complete projects on time?
- Can I handle the administrative requirements of being a contractor?
- Do I have the right mindset to be an IC?
- How will being an IC change my life? What are my expectations?
- Will I set up a limited liability company or contract under my own name?
- What are the financial implications?
- How soon will I begin to bring in enough money to pay my bills?
- Do I have the soft skills I will need to work with people I don’t know, and may not work with for long?
- What benefits do I need and how will I find them?
- Can I attract clients on my own or will I work for a staffing company who will offer assignments?
Potential ICs should spend some time thinking about their answers to the above questions. They should be honest with themselves and make an informed decision about whether or not to become an IC.
For more general information on being an independent contractor, see Self-Employed Consultants & Contractors and Hiring Independent Contractors FAQ.