There is no doubt that the independent workforce is growing, and a lot of terms defining this group are tossed around in conversation – independent contractor, self-employed, freelancer, solopreneur, side-gigger.
An independent contractor is usually someone who is completely self employed and runs his own business. His or her income depends solely on securing and completing assignments with outside clients/companies. Meanwhile, a freelancer is more short-term and project based. Both have a specific skill set, and both seek independent work for a variety of reasons. A freelancer may also have a full-time job or may be earning cash on the side but is not fully self employed.
According to the 2015 State of Independent Report, the freelancer usually is defined as someone who:
· Works an average of 11 hours/week
· Has a traditional FT or PT job, and
· Is motivated by supplementing income.
If you're considering self-employment, look beyond the immediate and into the "big picture."
Considerations include cost, financial planning, examining your skill set and deciding which services you will offer. It is essential to develop a solid business plan before deciding to leave a current position. You will also want to consider how much you should charge for your services - try using our bill rate calculator!
This webinar recording may also help.
Once you decide to become fully self-employed, knowing how to manage your business will be an important component of running your business. You will have to deal with issues such as:
· managing records,
· keeping track of expenses,
· billing for projects completed,
· collecting payments,
· preparing contracts,
· managing and paying taxes,
· finding health insurance, and
· ensuring that you are compliant with all federal, state and local laws that govern your work/additional income.
These are considered “back office” responsibilities, and they are essential to running a successful business. You can choose to complete these tasks yourself, hire an administrative person to do them, or contract specialized talent such as an accountant and/or attorney.
MBO offers back office support which can help make it easier to work for yourself. Contact us to learn more.
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