Becoming a self-employed contractor has many advantages. Starting your own business, being the boss, and calling the shots are all very attractive to anyone with an entrepreneurial urge. It can also be one of the easiest ways to transition from full-time employment to running your own business, provided you have solid skills and experience in your profession.
There are other forces compelling people toward self-employment. The freelance market is booming as many businesses today (even very large ones) require a more flexible “just-in-time” workforce and prefer to employ contractors rather than full-time employees. In many professions becoming self-employed is no longer a matter of choice.
However, self-employment has its challenges, and you should fully understand and prepare for all aspects of entrepreneurship in order to avoid unpleasant surprises down the road. Here’s what you need to know to start and build a successful business as a self-employed contractor.
Not everyone is suited to be their own boss. Before you make this leap, ask yourself two important questions:
Does self-employment suit your life circumstances?
If you are fortunate enough to have (or be able to get) well-paid, secure employment with benefits and reasonable job satisfaction, it may not make sense to become self-employed, no matter how great your desire to become an entrepreneur.
Organizing vacations, making major purchases, and planning retirement are much easier (and less stressful) when you have a steady paycheck and regular working hours, particularly if you have dependents.
Thoroughly examine your lifestyle, financial situation, and future retirement goals—and discuss them with your family—before making the jump to self-employment.
Is your personality suited to self-employment?
Being your own boss has many advantages, but it also means all the responsibility for the success of your business (including income) rests on your shoulders. If your personality is such that dealing with the uncertainties of self-employment is likely to cause you a great deal of stress and anxiety, then being an entrepreneur is probably not for you.