With the Gig economy in overdrive all around the world, more and more people are turning to contracting as a viable career option. If you’re suffering from 9 to 5 fever and have a can-do attitude, becoming a self-employed contractor could be the best move you’ll ever make. Here’s how to do it…
One of the biggest advantages to becoming a contractor is that you can adopt a toe-in-the-water approach to see if it’s right for you. If it doesn’t work out then you can simply move on. Another is just how easy it is easy to make that transition. But before you do it may be wise to ask yourself a few up-front and honest questions just to ensure you’re the right fit for contracting.
Are you a self-starter and a hard worker?
Unlike an employee, a contractor needs to do it all – tax, insurance, invoicing, business structure, banking, and finance, branding and promotion, new business, administration etc. Being your own boss can be very rewarding but it can also be time-consuming and sometimes even lonely.
Do you have the people skills as well as job skills?
Soft skills (communication and interpersonal skills) become much more important when you’re a contractor. In a sense, it’s what will set you apart and ensure your next contract job walks in the door. It’s also wise to make sure you have a bit of money in the bank as a back-up since the first 12 – 24 months or so working as a contractor can sometimes be a bit bumpy.
Once you’ve made your decision however, then go for it.
Becoming a Contractor: Getting Set Up
Business structure
Though they may differ from country to country, you will probably have a choice of three or so business types – and they can have a significant impact on your business in the years to come. It’s best to consult your accountant to help you decide the one best for you.
Financials
The structure of your contracting business may also impact the way you set up your banking. Again, talk to your accountant or business banker for guidance.
You’ll also need to have an idea about what percentage of your income you need to set aside for tax, retirement plans or even holidays.
Remember it’s generally best to keep your personal and business banking accounts separate. It makes it easier at tax time and helps you with business planning.
Registration
Depending on your location you will probably need to register your business with the Government or the tax authorities. Or you may need a licence of some sort, depending on your business. Again, it’s best to consult your accountant or business advisor to ensure all the legalities are properly taken care of before you start.
Insurance
Something which you may commonly come across as a requirement in contracts is holding a certain type of business insurance, often with a specific level of cover specified. Research the insurance types most relevant to your line of business.
You’ll also need to consider creating a contractor CV and portfolio as well as an online presence.
Becoming a Contractor: Getting Started
After taking care of legal and administrative requirements, you’ll need to consider the following:
- Creating a website for your contractor business
- You’ll also need things like an e-letterhead, business cards, email signatures, branded invoicing templates, etc. First impressions count and it pays to look professional from the get-go
- Connecting your business to business and social media accounts
- Networking and/or connecting with others who may be interested in your contractor services. In other words, get out and sell yourself.
Becoming a Contractor: Getting More Work
When you’re a contractor you need to be working on ‘new business’ continually by:
- Reaching out to anyone you know
- Connecting with recruitment and employment agencies, or any other organisations that may be interested in your services
- Consulting online job boards regularly
Ultimately, how you find new clients depends on the industry you work in and your own set of skills. But you will need to be diligent, disciplined and determined. Get out of bed each morning with a fire in your belly.
Becoming a Contractor: Getting Smarter
Are you thinking of becoming a contractor? With a strong global presence and decades of experience in contractor and workforce management solutions, CXC is well-positioned to assist contractors to advance their careers. Contact us today to find out how you can get paid, stay compliant, and reap the benefits of being a contractor!
