A Guide to Being a Great Independent Contractor
Tomorrow we celebrate our nation’s independence from the British in the 1700s. What better time then to discuss how you can become more independent too. In this case, we’re talking about becoming an independent contractor as either a side gig or to replace a job that no longer works for you.
Twirling Tiger Media works with a range of independent contractors, many of whom have been with us since our start. I’ve also been a successful freelance writer on and off since 1986, so I provide the following tips based on a strong track record on both sides of the independent contractor relationship.
Have a vision—and a business plan.
Freelance careers often start by testing the waters and, if successful, devoting an increasing amount of free time on a side business. It’s important to know going in what you ultimately want to get out of this second career choice, especially if you want it to become your primary job. Seriously consider where you see yourself in one, three and five years and then outline the steps to get there. Those goals should include financial milestones to keep you motivated and the number of clients to reach them.
Some may bristle at creating a business plan, believing it takes some of the fun out exciting work. But you must present yourself to others as a businessperson, and having a written plan for how to continue to sustain or elevate your profile and productivity is important.
Bonus tip: Consider establishing your own practice as a company versus as an individual. There are tax advantages to doing so. Also, as gig economy labor laws solidify, companies may be required to work with another company versus an individual to avoid employee vs. contractor misclassifications.
Research rates and price yourself accordingly.
One of the most difficult aspects of becoming an independent contractor is making sure you are adequately compensated. Failure to find the right rates to charge will cost you lost revenues over the lifetime of your career. Price too low and you not only work harder for less, you also may be perceived as providing less value for that price point. Price too high and you will have fewer clients who can afford your services, especially if you lack the portfolio to justify higher fees.
Remember too that compensation is negotiable and not always based on money. There may be perks that make something worth the effort. I used to pet/housesit for traveling friends and friends of friends, which provided me the chance to vacation on someone else’s dime and live like a local.
Rates also depend on the industry and assignment. Tech and financial companies tend to pay better than, say, non-profit organizations. Your rate may also be dictated by the project itself and warrant accepting a lower rate. Consider: Will it be a launch pad to more work? Does it soothe your soul to know it is helping those in need?
Bonus tip: Work with a contract that outlines payments. I had a client that changed management companies and the new vendor, over the course of a year, reduced their freelance pay by 50% to fatten their own bottom line. When I told them I could only go so low, they suddenly found more funding.
Live up to expectations.
I’ve taken assignments for below my going rate to get my foot in the door. In every instance, it’s paid off with long-term relationships (and higher rates), a robust portfolio of fulfilling projects and referrals to other, higher-paying customers.
To make sure you live up to expectations, you must carefully outline what is anticipated. Ask a lot of questions before you begin: about the project, the process, people involved, style guides and any policies to work within. Then go and do your thing. As an independent contractor, you must work, well, independently, with minimal instruction. It’s fine to check in periodically to stay on target, but the goal is to turn in work that makes your client smile – and leads to more fulfilling projects.
Bonus tip: Speaking of expectations, sometimes you must manage your clients’. Beware of scope creep that has you doing more work than contracted and without added compensation. Remember, you’re a businessperson. Don’t work with people who continually ask more of you for nothing.
Take time to market yourself.
The best marketing comes from word of mouth. Do a great job for someone and they will let others know or serve as a reference. They get that you depend on multiple contracts to stay afloat and want to see you succeed, if only to keep you working for them too.
You also need to have an online presence so that others become familiar with you and your work. This takes time to create, curate and cultivate. Connect strategically on LinkedIn. Show some of your personality in posts or comments but not your politics (unless your political preferences are part of your brand or work objectives).
Bonus tip: Remember to track all of your business-related expenses, including marketing yourself at networking events and conferences. They will make a big difference come tax time, especially if you underpaid quarterly estimated taxes. A good accountant/tax preparer is valuable if financial forecasting isn’t your thing.
Know when it’s time to quit your day job.
Most full-time freelancers start doing something on the side. They still need the security of a day job to pay bills while they build a client base and portfolio that will pay those same bills. Freelance work typically is not as predictable, so learning to budget and save for rainy days is critical. It also is not uncommon to be stiffed by a vendor that goes under or is a cheat.
At some point, if you are successful, you’ll make the switch. It could happen due to a sudden layoff or move; it could happen because you’re tired of working all the time at two jobs or a spouse/partner can ease economic household pressures. A friend who did bookkeeping on the side gained more business and eventually spent most of his waking hours on work, not family. It ultimately cost him his marriage and his health. Working all the time, especially during family time, should not be a goal.
Remember too that a major reason people become independent contractors is to set their own terms: for working hours, clients, projects and locations. Any or all of these may be reason to live a little leaner while in transition. The rewards once you are well established as an independent contractor will be well worth it.
Thanks for reading this,