Working as a contractor can be an amazing way to earn money and have a career. You don’t have to work in a job to be successful. You can be very successful as a contractor – but only if you know the pitfalls, and what to expect and how to deal with it.
You Must Be Self-Motivated
You need to be the type of person who can get work done when it needs to be done without anyone telling you to do it, including the work for your business such as bookkeeping, filing, and marketing.
You Must Have Good Time Management Skills
No one is going to tell you when to work; you’ll be in charge of that. You’ll need to be able to estimate accurately how long any one job will take you, when you’re going to do it, and be able to do this with multiple clients.
You Need Your Own Tools and Supplies
When you’re a contractor you must supply your own tools such as computers, stamps, internet connections, software and so forth. You are a business owner when you’re a contractor, and you’re responsible for all your own stuff.
You Must Pay Your Own Benefits
If you currently have health insurance in your job, you need to know that as a contractor you pay for your own benefits – including self-employment taxes, insurance, and more. Do you have some funds set aside so you can afford these additions to your budget?
You Must Be Able to Ride the Wave
Payment doesn’t always come on time like with a job. You won’t get a paycheck every two weeks, so it will make it harder to budget your money. You’ll have times of feast and famine. If you can budget through the hard times and ride the wave, you’ll be a great contractor.
You Must Be Able to Work with Many Personalities
When you are a contractor you don’t work with just one business or individual at a time. You typically will be working for several at once, all with different personalities. If you’re good with people and are able to take criticism, you’ll do great as a contractor.
You Must Be Good with Money
If you’re not good at budgeting, being a contractor might be difficult with you. For example, you may complete a large project and receive a $20K payout. Should you spend all that $20K this month just because you earned it this month? No. You should save some for taxes, savings, and for the slower months.
Hopefully, this didn’t discourage you. You have to remember that some of the security you think you have in a regular job is just an illusion. Getting paid every two weeks isn’t as important as making enough money on a regular basis to pay your bills and save for your future. All you have to do is train yourself to mind your money and build your business without anyone telling you what to do.