Ten Strategies for Working as an Independent Contractor
84Changes in the workplace
With the American economy in a state of crisis, unemployment is high and countless jobs have been permanently eliminated. Many businesses now look to virtual assistants or temp agencies to meet short and long term needs instead of hiring permanent employees, and this situation is not apt to change soon. A practical solution for displaced workers is to offer their services as independent contractors (IC). In this way, they can maket their skills and expertise to a variety of clients, frequently at higher rates of pay than that typically offered to in-house employees.
The use of independent contractors has been on the rise for more than a decade as entrepreneurs have discovered the benefits of hiring to achieve specific short- and long-term goals. According to the Bureau of Labor Statistics, 60% of all businesses make use of contract labor and as much as 40% of all corporate budgets are now allocated to contract labor. This is good news for more than 8 million independent contractors working in the United States. (This number is expected to more than double in ten years as a result of a changing economic climate and a rising number of men and women seeking to work for themselves.)
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Working for yourself
Strategies for working as an Independent Contractor
To succeed as a virtual assistant or independent contractor, it is extremely important to be professional and thorough in every stage of your dealings with prospective clients. Towards meeting this end, listed are ten recommendations for success as an independent contract worker. Attention to these suggestions will result in fewer problems and more successful relationships between you and your clients.
1. Know your limitations. The urge to accept any work offered and hope for the best is particularly strong when just starting out, but do not accept a contract you don’t have the resources to fulfill. Begin slowly and work toward more ambitious jobs as your skills and experience increases.
2. Use outside expertise when required. This might seem a contradiction of the first recommendation, but it really is not. If elements of your assignment fall outside your expertise, work with sub-contractors to finish the job. Make it clear from the outset that the use of sub-contractors is a possibility and be certain your client has no objections or concerns. Do not take credit for a sub-contractor’s work or use it to imply your abilities are more than they are.
3. Understand your customer’s goals and objectives. You must have a clear understanding of what your customer considers the end result of your working relationship. If your role is one piece of a larger puzzle, you must define to what extent you are responsible for the success or final outcome of a project. Be wary of accepting a project if your client is incapable of articulating goals or objectives.
4. Define the extent of your contribution and agree upon what the end of your involvement will be. You must be in agreement when your job has ended. For example, if you are designing a web site for a client, is site maintenance or training part of your customer’s expectations? You might believe you have finished a job, only to subsequently be deluged with calls for support or upgrades.
5. Agree to a properly structured contract. Do not accept any job without a written contract. When negotiating an assignment, it is acceptable to initially slant the contract terms in your favor—do not compromise your position before contract discussions even begin. Your client will do the same, and finding the middle ground is what negotiations are for.
6. Manage your relationships in an ongoing way. Your relationship with clients will not be one of employer/employee; you and your client are partners. Make it your job to maintain positive relations at all times. Take responsibility for your role in the partnership; provide what you have agreed upon and work to correct misunderstandings without placing blame.
7. Document your processes. Keep clear records of what you did to fulfill your contract, including your use of time. This will be to your advantage if a client makes specious claims about your practices, efforts or judgment. Discuss your methods before accepting a job and establish agreement in advance for your work processes whenever possible.
8. Communicate problems immediately. Anything that prevents you from fulfilling your contractual obligations in a specified period of time should be communicated immediately. Your contract should be reexamined and altered if your problems cannot be addressed to avoid legal issues later.
9. Justify expenditures. Your contributions to a client’s project must be cost effective to you and the client. Reasonable expenses are expected and unavoidable, but do not try to impress a client by spending more than you need to. A frugal approach will enhance your reputation in your industry and lead to referrals.
10. Document what you deliver. Provide your client with a check list, invoice or packing slip and have the document signed upon delivery of your product or services. It might be prudent to provide documentation at both the mid-point and conclusion of your assignment. This document should reflect the terms of your contract and your customer’s goals or expectations.
A suggestion from a reader
A friend visiting my page who identifies herself as "Just A Voice" left another suggestion for Independent Contractors in the "comments" part of this article. If you click on her name you will follow the link to her profile page to read more of her work. I quote:
"...One thing I would suggest adding is change orders. A lot of times a client will sign a specific contract, but as the work goes on they change their mind about certain aspects due to one reason or another. Sometimes relevant and sometime just because they've changed their mind midstream because they've seen it could be "better" a different way.
To make sure that you don't end up with eating any extra costs that might occur due to these spur of the moment decisions it is best to have a "change order" that is a codicil to the original contract specifying the changes and any extra costs that might occur and signed by the customer so there is no confusion at the end of the job about any extra costs due to their change of heart..."
Thanks for this excellent suggestion, I appreciate it greatly.
The advantages of working for yourself
There are many reasons why more and more Americans are looking for an opportunity to work from home. Many men and women want to gain more control over their schedules. Others are tired of surrendering their children to day care, and want to be the primary care giver for their sons or daughters. Often people seek to escape office politics, water cooler gossips, or difficult co-workers. For some, there simply are not enough jobs available that allow them to utilize their skills.
These guidelines will help you avoid many of the problems that plague contract workers, but they can also serve as so much more than that. Success is never guaranteed, but these suggestions offer the opportunity for mutually beneficial interactions between you and your clients. They can become the framework for a thriving business based upon sound and ethical principles—certainly ingredients for success. At the very least, they can eliminate some sleepness nights and a few extra gray hairs, and that is important, as well.
Good luck.
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drbj, thanks for reading. #3 is indeed particularly important, as I and many folks have learned from the school of hard knocks. If you don't define the goals and objectives, they can shift on you like a strong wind. I worked on an advertising project for a customer who wanted something different every time I spoke with him. I finally refused to continue until we both agreed we were clear on what he wanted. Lessons learned.....
Thanks again for stopping by, I appreciate it--as always.
Mike
Excellent tips, Mike. We could start a Forum hub on freelance assignments gone south! There are many positives to being an independent contractor. But like some bosses, some clients are just impossible to please!
I've had more than my share of change-the-scope-every-five-minutes clients, tooo!
But I wouldn't trade it. Even if there was a 9-5 to go back to, I'm too spoiled by being my own boss!
Mighty Mom, thanks for reading. I am sure there are lots of Hubbers with horror stories to tell--lots of lessons are learned the hard way, unfortunately.
I am frequently forced to return to the 9-5 grind to keep things going as I am not extroverted enough to sufficiently market myself, but I would trade in the corporate grind in a moment for the opportunity to work for myself full-time. I'm still counting on it.
Thanks again for reading. Take care.
Mike
Great hub Mike
All are good points and should be followed if you are going to be self employeed.
One thing I would suggest adding is change orders. A lot of times a client will sign a specific contract, but as the work goes on they change their mind about certain aspects due to one reason or another. Sometimes relevant and sometime just because they've changed their mind midstream because they've seen it could be "better" a different way.
To make sure that you don't end up with eating any extra costs that might occur due to these spur of the moment decisions it is best to have a "change order" that is a codicil to the original contract specifying the changes and any extra costs that might occur and signed by the customer so there is no confusion at the end of the job about any extra costs due to their change of heart.
We have learned this the hard way.
Mike, this is excellent.. I have a friend who contracts with the govt. and she would appreciate this. I will be passing it along to her. Tip number 7 is important. I used this a lot in regular employment when I worked for the govt., and often would even email an update periodically and save the feedback on it..Nice hub - as always - I appreciate your well thought out list. This is a keeper for leadership priocinciples as well
Be blessed!
CS
Great hub. Another concern in the USA is the IRS. Make sure you qualify as an independent contractor. If your contract calls for "regular" hours, revise it... You must be in charge of when, where, and how much time and effort.. is used. IRS does not like contractor status. It is a fertile area for audits and success in obtaining additional taxes... Keep detailed records!
I can tell youi from my own experience, everything Mike says is GOOD ADVICE!!! Especially--get the terms down in writing: What, very specifically, the client expects you to do, how much they will pay and when. And then document carefully the fulfillment of the contract on your part. Get the client to sign off on the completion of the contract, and that they are satisfied with the results you have produced--it will save some potential problems later on.
Very informative and can relate being Im a freelancing now as a writer. I found what you wrote to be quite true from my experiences working and writing for some people. Thing you did not mention is taxes. Im not sure what to do bout taxes. I might owe cause Im self employed. Or I can just be hush hush bout it. I do not even know how much Ive made so far thoug Im sure I could find that out via paypal. And paypal takes part of my payment too so its like some is getting taken for takes I never get my full amount. So these are some other things to consider too before venturing in. Sorry if that was long winded. Lol
Cool hub Mike, I worked as a sub for an independent contractor in home security installation before the economy went south. I would like to get back into contract work but never considered it in a business environment until now. Designing web pages or freelance writing would beat the heck out of belly crawling through attics and crawl spaces.
Voice, thanks for your comments. If you do not object, I might add your suggestions to the bottom of the hub. I have seen a few other hubbers do this on their articles and I believe it is appropriate here. You summarized the suggestion better than I could, so I think I will go that route. Thanks so much for your insights.
Mike
Coffesnob (CS), thanks for reading. I am appreciative that you would find enough of value in my article to forward it to your acquaintances. Thank you.
I am a firm believer in both discussing processes in advance and documenting them along the way. If my methods are to be met with reluctance or skepticism, I want it out in the open before I begin work. There is never hard feelings if the client wants to find someone else before I begin because he doesn't like the way I work--I prefer that to objections after I've invested time and energy.
Thanks again for stopping by, and as I said--I appreciate your forwarding my work to acquaintances.
Mike
Dallas, you are quite correct--there is a checklist with about twenty items for establishing yourself as an Independent Contractor, and the IRS is pretty particular about it--the IRS likes employees better than contract workers because it is easier for them to keep track of. Working on the employer's premises, allowing the client to set the order or sequence of work, and the right to quit or be fired are among the indicators the IRS uses to establish a contract worker as an employee. Any Independent Contractor who does not know about this list should look for it--the information is important.
Thanks for your comments and insights, they are greatly appreciated.
Mike
Paradise, thanks for reading. Documenting both processes and the end results was something I learned the hard way over time, but you are correct that it needs to be a part of every contract workers routine if they hope to minimize problems down the line. The clearer and more specific the agreement is, the better things tend to work. Sometimes when I have believed a customer might be reluctant to sign a checklist or invoice (because they are known and recognized as difficult customers), I have even gone so far as to send a checklist stating that the absence of a response will be considered agreement that the contract has been fulfilled. I haven't done that often, but it has come up a few times. Luckily there are a lot of honest clients out there....
Thanks again for stopping by, I appreciate it.
Mike
Hi, Janny. Taxes are a whole other ball game, and it seemed best not to get into any of that in this article. I have written articles in the past about the taxes Independent Contractors must pay--I might write something for HubPages, as well. Taxes can be a bear, and it is certainly not my favorite part of self-employment.
Never worry about being long-winded, I always appreciate the comments and enjoy reading what everyone has to say. Thanks for stopping by, and best of luck when tax season rolls around.
Mike
Hey, John. Home security installation, huh? Is that interesting work? I would never have the expertise for something like that, but it might be a cool gig. My own freelance work has been either as a writer or an artist. Usually my artwork lends itself more to Corporate America in the form of designing logos or other images to help with branding, but now businesses are on the lookout for content writing and I have gotten a few gigs that way, as well. Usually the business world is my starting point when looking for contract work, but everyone has a different niche. I would not be reluctant to recommend giving it a try, however.
Thanks for reading, I appreciate your stopping by.
Mike
Great Hub- I hope that some people new to the IC field read this and consider your tips--I had to learn by trial and error, and although I am a pro at the techniques used to get the pay and info needed to get the job done/ I was often taken advantage of and under paid, because I was scared to offend someone by saying NO or I CANT or I NEED MORE MONEY...
Rated Up and Useful! Thanks!
-HC
HC, thanks for reading. I was pretty soft-spoken in my dealings with people also, and was reluctant to negotiate with clients. That was how I learned to embrace some of the suggestions listed here, such as slanting contracts in my favor initially. I put the onus to negotiate on the client in that regard, and if they were unwilling to haggle, then things came out in my favor. As long as my contracts weren't foolishly slanted in my favor, I found it easier to negotiate down to what I wanted than up to it.
Thanks again for stopping by, and I hope you have a great weekend.
Mike
Hi Mike, wonderful tips for those of us who self contract their services and professionalism to others. Key factors are service and establishing TRUST right from the beginning of your mutual relationship, without it you are both dead in the water.
Make sure you follow up on everything you promise or else you will see your customer finding an alternative and you will soon find yourself out in the cold.
Working from home can be fun and beneficial, but you have to run it just like any business and keep on top of it all the time. Great hub thanks for the share. I rate it UP
This is all great advice Mike. Thanks for sharing.
Saddlerider, thanks for reading. You are absolutely correct, it all begins with trust. If that isn't established from the outset, doing business with anyone often feels like going into combat. The trust has to be there. If the trust is established, it is important to be professional throughout in order to keep it and build on it--just as you have suggested.
Thanks again for stopping by and offering your insights, they are right on the money.
Mike
Journey, thanks for stopping by and reading. I am appreciative of your interest. Come back again anytime.
Mike
I am honored you added my suggestion.
It is the best way for you to protect yourself from the clients that constantly change their minds. It is a common practice and helps keep things straight.
And thanks for the link...you are a peach :)
Thank you, Voice. I have always appreciated the quality of your comments, from the early toilet paper debates to the present day. Your comments never fail to improve my pages, and I am grateful.
Mike
Thanks for very useful tips, Mike.
My mind is strongly drawn to No 5. I've had a Training Business since 2001 p/time - delivering IT Training for small organisations on their premises and also 1 to 1 private tuition. You know all this time - I've never really drawn up a contract except for a note on my invoices which states "please pay within 7 days". lol. I've been going by verbal agreements.
I already adopt some of the tips above and the others are going on my "To do" list. Thanks for writing this Hub. :)
Hi, Elena. Thanks for stopping by. I've gotten used to working with contracts and I always insisted on one, but I always tried to make it seem to be no big deal if the client was wary. I think I started with a contract I found online and added stuff from a "Business Contract for Dummies" book. Eventually I had a real lawyer help with some of the details. I will confess I've worked on verbal agreements, as well, but I am always nervous about it.
Thanks again for stopping by, and I'm glad you found some of this to be helpful. Take care.
Mike
I would love to work from home............ if I ever get the chance to; I have this bookmarked :-D Kaie
Kaie, I hope you do get the chance to work from home someday--it can be a wonderful experience. Thanks so much for stopping by.
Mike
hi i would be heartbroken if i ever had to leave the workforce, i love being a part of a team, and earning a little money for myself.
Joy, thanks for stopping by. Many people feel as you do, and teamwork and camaraderie are one of the real advantages of being in the workforce. I hope that whatever you do, you are content. Thanks again for stopping by.
Mike
If anyone is looking for working as an independent contractor then you can search job listings here http://jobs.trovit.com/jobs/independent-contractor
I hope it is helpful!
Great stuff Mike, thanks for taking the time to write this imformation filled hub that explanes the many facets of being an independent contractor. I had several WOW moments while reading this hub.
Thanks again, Mike
Maybe I just missed it but what about paying social security? Sales taxes you can put on the guy paying you if you have a product anyway but self employment SS always really infuriated me being higher and owning my business I had to pay taxes on the value of everything in my shop such as shelves, cash register, you name it, all. My husband did contract work at people's homes and he never once made anyone sign a contract and did get caught in traps where the little old lady claimed he was suppose to do this or that and although my husband was kind hearted enough, most of these people being ones he and his father worked for for years, little old lady or not they didn't try to cross him by the time he got through his say, lol. He also told them to not be calling him no d--- interior decorator, which many liked to do to their friends. He got a little hot under the collar when they would try to get his advice on curtains, etc, but believe me I got good laughs behind his back! He hasn't worked for himself in years but that is what he would like to do too, not hard labor anymore of course, lol. He writes too as I do, we have different styles but both enjoy reading each others. His is mostly humor and although I use humor somewhat too I think it is so dry many people do not pick up on it, but it would be nice to make a living writing, I certainly love it.
Having worked in Europe as an IT contractor for a long time I am struck by the difference between the US and UK. Here what you describe is called "Going direct" rather than going through a recruiter. Going direct is fairly rare but not unknown, and contracts are normally for a fixed period of time.
Hi Mike, great advice here for anyone contemplating working as a contractor. I have worked for years as a freelance copywriter and would recommend it to anyone who enjoys life balance and being your own boss.
I have, however, been scammed with a couple of internet companies I thought were legitimate. Do your research before accepting any job, have the contract read by someone legal, ask for a deposit up front and know your rights if you eventually send work and then don't get paid. These instances are rare but just be wary of how clever some scammers can be. Thanks for a very useful article Mike.
Plenty of good advice here. Having both parties agree to a contract is definitely a must! Anyway, good luck to anyone who tries paying their rent on the salary or wages of an independent contractor, as well as paying for something like health insurance or a 401K. Pipe dream? Lemme know. Later!
Many people would like the freedom of working for oneself and the flexibility of working from home. However, it is often tough when first starting out because one might not earn as much as when working in the 9-to-5 corporate world. But there are people who have left the rat race and succeeded. I've searched the internet for these success stories and compiled them in a hub article http://hubpages.com/t/174ca0 Perhaps it may provide motivation for those wanting to work for themselves.
Good job with this one , Mike.
I've been working as an independent contractor for about ten years now. The suggestion about change orders is spot on by the way. It keeps the meter running with clients or the "partner".
I'm a landscape designer. I love design/ hate sales. So I hook up with firms that have a bigger fish than their usual. I come in. Meet their client, design the project, bid it with my "partner's" numbers, get a down payment, visit the jobsite a time or two per week, collect the last check. Done.
Or they ask me to do more work.
Not the typical way a landscape designer works..but it suits me just fine.
I'm horrid at self-promotion, marketing, etc. My thing is design and people. Not sales. I teach..this is a good way to go..we do this cuz...share a story about something funny...
I prefer working for myself. I can choose yes or no. I can work out of my own house, choose my work hours, make the schedule that I need to get it done.
Zoe, thanks for stopping by. I will leave your comment and link here to benefit whoever might want to visit the site you reference. Thanks again.
Mike
Teddletonmr, thanks for reading. I appreciate your kind words about this article, and glad you found something in it to be practical. Thanks again.
Mike
Polly, thanks for reading. I thought taxes and social security were such large issues that I didn't even try to address them here. You are correct, one aspect of working for yourself that many people do not enjoy is tracking taxes and withholdings. Between social security and federal, state and local taxes, something needs to be addressed almost constantly. Many people are surprised to learn how much is involved, and others decide they don't like that aspect of being an Independent Contractor. It is very much a part of the job.
It sounds as if your husband has had some interesting experiences along the way, and contract or not, he apparently has found a way of managing things that works for him. I had to chuckle about the interior decorator comment!
Thanks again for stopping by, Polly. I might try to get around to writing about taxes and social security. Have a great day.
Mike
Alex, thank you for your comments. I wasn't really aware that the business models for Independent Contractors was different throughout most of Europe than in the United States and England. I am curious what going through a recruiter involves. Is it an agency similar to Temp Agencies in the US? I would be very interesting in hearing more.
Thanks again for stopping by, I appreciate it.
Mike
MPG Narratives, thanks for reading. Your advice is very sound, especially regarding Internet businesses. Most writers looking for work online will advise never to send businesses a "sample" of their work, particularly if the business is looking for online content. The samples tend to BECOME the content. I am sure most businesses are legitimate, but it is important to always remain watchful in order to protect yourself from the crooks out there. Due diligence in researching prospecting clients is mandatory for continued success.
Thanks again for stopping by, your insights are greatly appreciated.
Mike
Kosmo, thanks for reading. You are certainly correct that it can be a tremendous challenge to pay for health insurance and retirement while also covering both sides of the Social Security pay-ins, but it can be done. In fact, many Independent Contractors with corporations for clients make more than they were paid as corporate employees doing the same work. There are no guarantees, however, and for each success story, there are at least as many folks who return to working for someone else after taking a stab at self-employment. It certainly isn't easy.
Thanks again for reading, I appreciate your stopping by.
Mike
Peacefulparadox, thanks for stopping by. You have a wonderful online name, I like "Peacefulparadox" very much. It is tough in the beginning, but there are many success stories out there, and hopefully readers will indeed be inspired by your hub.
Thanks again for stopping by, I appreciate it.
Mike
HubCrafter, thanks for reading. You've obviously found a style of work that is successful for you, and I applaud you for that. I am with you, I don't like the self-promotion aspect of contract work very much, but I concede it is an essential part of success as an Independent Contractor. I suspect there are many people out there like us, as well--folks who would be happiest just working and not having to drum up business. Selling ourselves and our craft to prospective clients can't be ignored, however.
Thanks for your insights, and I hope you continue to know the success you now enjoy.
Mike
Good advice. One thing is for sure and that is that working for yourself is never easy and requires huge discipline. Also, frankly, some luck added too!
Nicks, you are so correct--it isn't easy and discipline is an essential agreement to success. And, as you remind us--luck is important, as well. Thanks for stopping by, your comments are appreciated.
Mike
Thank you, I can know for sure now I finally got a laugh!
Polly
Hi, Polly! I don't know your husband but imagining his response to being called an Interior Decorator was amusing. Thanks.
Mike
Good hub! Lots of useful tips there, especially for the inexperienced. I'm really big on contracts -- as brief as possible and in plain english, but clearly spelling out the terms and goals of the agreement. I know several others who prefer to work under verbal contracts, and get burned often!
Allan, thanks for reading. I agree with you--contracts are essential, but the don't have to be complicated or too long. They should be as clear and concise as possible to avoid any opportunity to misunderstand the intent of the project.
I know a lot of folks who also go with a handshake deal, but I just feel safer with something in writing.
Thanks for stopping by.
Mike
nice hub.it is usefull to all.
Chrysstil, thanks for stopping by. I appreciate it.
Mike
Hello Mike,
Thank you for the timely advice. Please consider incorporating and getting business insurance to protect your personal assets [home etc] when working as an independent contractor. This falls in the realm of taxes so I have included a link from a CPA that provides insight into becoming an independent contractor.
http://www.usataxaid.com/uncategorized/why-do-busi
Cindy
ConversantLeaders, thanks for stopping by. Taxes and insurances are issues complex enough that I didn't bother trying to address them here. Many people will incorporate for tax purposes, but an equal number are just sole proprietors working on handshake agreements. I did not yet try your link, but I will leave it for anyone seeking tax assistance.
Mike
Hi there! Your Hub is nice I like it so much. That is why I rated it, Followed it and Shared it. Thanks for sharing. =)
If you get a chance check out also my new Hub Page.
toddlergirlcloth, thanks for stopping by. I appreciate your following and sharing my work. I will stop by your page and read your work soon. Thanks again.
Mike
Valuable beyond measure, Mike. Information like this will become even more relevant as we continue to put the Industrial Age behind us and ascend even further into the Information Age.
Another book I'd suggest is The Well Fed Writer by Peter Bowerman. Goes into detail on beginning a career in commercial freelance writing, specifically.
Thank you...
Thanks, Todd. I appreciate the suggestions.
Mike
It's gratifying to see your such a great information. We really impressed with your such a huge information. Thank you so much for your great information....
Contracting, I am humbled and appreciative of your praise for my work. I thank you very much.
Mike
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drbj Level 8 Commenter 22 months ago
Mike - Anyone interested in working as an independent contractor would be smart to follow the meaningful strategies you have outlined as practical guidelines.
#3 is crucial - ask questions to be sure you understand what the client needs, not just what he or she wants.