Whether you identify as an independent contractor, self-employed professional, freelancer, or entrepreneur, there’s plenty of gratification in knowing that ultimately, you’re your own boss—you work for yourself, you call the shots, and you own your financial destiny.
While you may be confident in your ability to deliver great services and results to clients, it’s important to take a step back and first work through some strategic planning to ensure your business venture is successful. Here are 6 key steps to help you get started.
While transitioning to independent work is exciting, it is a significant career and life change. Before you begin, you’ll need to define the services or skills you want to offer. Research your industry, see what’s in demand, and configure your services to match market needs. Be confident in your skills and experience; clients will be counting on you to deliver the results you advertise.
In addition to nailing down your offerings, it’s important to put yourself in the right mindset for the additional responsibility that comes with independence. Remember, you’re not only accountable for delivering the work, but also for finding it. Do you have the resilience to hold out for a contract that takes a few weeks to get signed, or the tenacity to use your network to find new clients? Thoroughly thinking through your services and mentally preparing for how you’ll tackle future hurdles will ensure you’re well positioned to begin independent work.
Financial preparation is key to a smooth transition. Make sure you either have an immediate project to start your cash flow, or a several month cushion of income to cover expenses until you bring in a contract. Keep in mind that even if you land a project, 60-day terms are common—so don’t expect to get paid right away. As you think through your financial expectations, learn how to set the right bill rate so you maintain realistic expectations and charge the right amount for your services.
In addition to income, plan how to best protect yourself, your family, your business, and your retirement. Look into health insurance options available to independent consultants, and be sure to account for about business insurances you may need such as General Liability, Errors and Omissions, and Workers Compensation. As you get started, be initially conservative with spending; instead of making sure your business has all the bells and whistles, focus on getting out there and securing work.
If you’re able, join the 12+ million independent workers who do so on a part-time basis to test out independence. In doing so, you can get a feel for contractor life with a safety net. Start reaching out to your network, build confidence, and develop your portfolio with side projects. If you’re currently working, tread lightly, being sure not to violate your current employment contract.
If moonlighting isn’t an option, meet with a trusted advisor or mentor who can provide guidance and feedback on your plan. Look for someone who has made a similar transition in the past and run your planned offering, messaging, and marketing ideas by them.
While you can’t go wrong with a formal business plan, at the very least you should have a short—12-month—and a long—3-year—roadmap in place. Outline your services, your target clientele and how you plan to reach them, a plan for landing you first contract, how you’ll price your services and why, how you’ll utilize contracts, when and where you want to work, and income and personal development goals.
You’ll need to find clients early on who will provide enough work to sustain your income. Clients may be people from your professional or social networks, or they may come through word-of-mouth referrals. Pitch your business to employers, peers, colleagues, and friends—you never know who may be in need of your services.
Keep in mind that as an individual worker, you may be initially limited to projects of a certain size—i.e., ones you can handle on your own. However, once you get rolling and find the right balance, you’ll find you have the flexibility to choose the projects you want, and even partner with other independents to take on larger projects or more work.
When you know what direction your business is headed and perhaps have a few projects underway, start thinking about how to best sell what you’ve built. A marketing plan will help you step back, take a look at your business as a whole, and align business goals, such as growing revenue or expanding your service offerings, with marketing objectives.
To start, develop materials that present your skills and credentials—an attractive resume, a website outlining your services, appropriate social profiles, and business cards. As you position yourself as an expert in your field, you can also network by sharing your expertise. Volunteer to participate on panels or webinars, and contribute content to blogs and articles.
While it can be challenging to put the processes and systems in place to become self-sustaining, stay motivated knowing you have the potential to grow a successful, profitable company.
If you have questions about going independent or starting your own business, we are here to help. Contact MBO Partners today to learn more.
This blog shares 10 business books (and authors) that have been instrumental in helping the professional development of a number of MBO Partners staff and executives. We recommend adding them to your reading (and following) lists!
News and notes for independent professionals and their clients. This is the July 31, 2017 edition.