What Business Should I Register As An Independent Contractor

For years, I have been an independent contractor. I've grown my home business organisation into something that earns a steady income for my family unit. In fact, I'k the primary breadwinner. Becoming an contained contractor is one of the near assisting minor businesses to start this year.

how to become an independent contractor

Equally an independent contractor, I have a caste of freedom in choosing my own schedule, and even determining who my clients are. I'chiliad also part of a segment of the workforce that is growing in demand. Many companies are turning to contained contractors considering it tin be less expensive. My hourly rate might exist higher than the rates commanded by "regular" workers, but I save a company in other means:

No benefits to pay
No overhead costs
No payroll taxes to pay

A few years ago, CNN Money pointed out that an employee working for $14 an hour actually costs an employer $20 an 60 minutes. While almost of my clients pay more than $20 for a project, the reality is that they simply have to pay me for the projection, rather than proceed to pay me 24-hour interval in and day out, and pay the other costs associated with maintaining a full-fourth dimension employee.

How Practise You Become Self-Employed?

The independent contractor arrangement can be a win-win in many ways. If you are looking to go an independent contractor, either to supersede your "day job," or just to make a little extra money on the side, here are some steps you need to take:

1. Recollect of a Name for Your Self-Employed Business

Consider what services you will offer, and so selection a name that describes what you do. I call my business Miranda Marquit Freelancing. Information technology'south straightforward, and you know — immediately — what is done and who is offer the services. If y'all want to offer graphic design or spider web evolution services, think of ways to include those descriptors in your business organisation name.

Have a solid agreement of who yous are and what y'all have to offer, and be able to clearly define what you practice. I'm still tweaking my "lift pitch," but it'south coming along nicely. When you tin can encapsulate what you lot exercise, it's easier to convince potential clients to hire you.

2. Choose a Self-Employed Business organization Structure and Become a Proper License

Side by side, think about how you want your business organized. My business concern is prepare up every bit a Limited Liability Company (LLC). I'thousand the general partner and my husband is the limited partner. Others, though, find that an S-Corp or C-Corp makes more than sense for them. (Here'south a comparison of using LLC versus C-Corp.)

In some cases, information technology can fifty-fifty brand sense to remain a sole proprietorship for a time. Consult an accountant or revenue enhancement professional for more than data about what might be most advisable for you.

You should too get a proper concern license. Your state or locality likely requires you to have a license, fifty-fifty if you are providing independent contractor services out of your own dwelling. If you lot plan to have a LLC, LLP, or Due south-Corp., you definitely demand a license. However, at that place are cases in which sole proprietors need licenses, too. Check the requirements, and make sure you abide by them.

iii. Open a Business Bank Account

Fifty-fifty sole proprietors should keep business expenses separate from personal expenses. Open up a business bank business relationship to keep everything separate, and to improve your ability to keep good records. Many of the best checking account providers for consumers as well have business organisation accounts you tin can use.

This is a critical pace that many new contained contractors miss. You lot must divide your personal money from your concern money. If you lot are cocky-employed and someone sues you, and your money isn't kept separately, then everything y'all have can exist pulled into the lawsuit. Even if your new contained contracting business only fabricated $200 this year and you accept $50,000 in the banking company together with that money, it can all be targeted in a lawsuit.

Yous need to keep good records and then that you are prepared come up tax time. Make certain that you are setting aside some money in your concern bank business relationship to aid you lot pay quarterly taxes. Don't forget that you volition have to pay your portion of payroll taxes, as well as the employer portion. This is known as the self-employment tax. Organize your finances at present and then that you can avoid headaches afterwards.

iv. Advertise Your Contained Contractor Services

Finally, you need to go out there with your business concern. Let others know what you are doing, and how you can help them with the services you provide.

Information technology helps to have a domicile on the web, so set up a spider web site. You can even write a blog. Post your resume and relevant samples online.

Use social media to promote your services and to connect to others. (Social media is one of the key ways you tin can advertise your cocky-employed services while withal saving coin for your pocket-sized business.) If y'all are generous in the manner you lot promote others, and if yous offering insightful information and ideas, eventually potential clients will detect — and rent you.