Becoming Your Own Boss (BYOB, 2.2)

In the first and second articles of this series (BYOB, 1.0 and 1.1) you learned some of the facts related to the current employment picture and examined some of the choices that were available to you.

This set of articles (BYOB, 2.x) addresses the basic questions that you should ask yourself as you consider the idea of becoming an independent contractor. In answering all of these questions, your goal should be careful objectivity. Wishful thinking in this regard is unproductive and will almost certainly cause problems if you allow it to intrude into your decision making process. This article is part 3 in the process of Examining Your Situation.

Can You Make It As An Independent Contractor?

This final question is really "the" question. If you can deal well with the day-to-day actions that make up to life of an independent contractor, the other questions mainly help you identify areas for improvement. If you cannot, the other questions are irrelevant.

In truth, almost anyone can make it as an independent contractor. The real question is whether you meet the requirements and have the personal attributes that go along with being an independent contractor.

These questions will help you to focus on different aspects of the major question:

Is There Demand In Your Geographic Area For The Services That You Can Provide? Even if you are the most competent person in your career field in your entire state, if there is no demand for your services, you cannot be successful in marketing those services. Thus, effective demand research is necessary to making that decision to become an independent contractor. The following additional questions list only a few of the items that must be considered. Your individual situation will probably offer more. Remember, wishful thinking will only cause you problems. Facts are absolutely necessary.

Are There Other Independent Contractors Working In Your Area? Careful evaluation of your competition is essential. This will not only let you know about them, but it can also tell you something of the potential market demand for your services. The important point is this: If others are successful in your geographic area, you should be also if you have the required attributes and if you prepare properly.

Do You Have The Required Technical And Marketing Skills? First, if you are not highly skilled in your career field, your chance for success as an independent contractor is in doubt. The most important characteristic that the successful independent contractor offers to a client is expertise.

Skill in the chosen field is usually considered by outsiders (including clients) to be the most important part of a contractor's stock in trade. Second, to you as a contractor, it is at least as important (perhaps even more so), to be able to market yourself.

If you cannot comfortably approach a new prospective client and present yourself well enough to make a sale, you will not be successful in the long term as an independent contractor. As an independent contractor, you are your own marketing department.

Do You Have A Good Reputation? If expertise and marketing abilities constitute the most important part of the stock in trade of the independent contractor, reputation must necessarily be considered at least second in importance. Your reputation must be good to start, and it must, at the very least, be maintained.

One of your primary objectives should always be to enhance your reputation at every possible opportunity. People who respect you are good sources of contracts, or know of people who are. A good reputation will help to lessen the time between contracts.

On the same general subject, good references are often important to clients. Although not all will ask, it is important to be able to offer a list of references to prospective clients.

Can You Stand Income Uncertainty? A fact of life to the independent contractor is that income is uncertain, particularly at first. Becoming an independent contractor requires an initial contingency (reserve) fund equal to approximately six months of expenses (regular obligations plus marketing expenses). If you are a good financial manager, borrowing capacity might be substituted for part of the reserve after the first few months.

Obviously, this rule is suspended if you can secure a relatively long-term contract (three months or more) with either your current employer or another company before you leave regular employment. However, the fund must be established as soon as practical. New contracts might not immediately follow old contracts. Income might not be continuous even after becoming established. Continuing as an independent contractor requires a continuing contingency fund equal to four to six months of expenses, or equivalent borrowing capacity.

If you work alone, the reality is as follows: "If you're working, you're not selling. If you're selling, you're not working. Both are required."

The persistent problem is that the ratio is difficult to balance. Continuing contacts with friends, clients, and prospective clients are imperative.

Can You Stand Criticism? This question pertains to both personal criticism and criticism of your work. Acceptance of criticism is very difficult for many. As a contractor, you will be subjected to both warranted and unwarranted criticism. You must be able to view all criticism objectively to determine if it is warranted. You must know almost instinctively when to defend yourself and when to keep quiet. Criticism of your work output is often subjective; however, the client is always the final authority. Remember: It is sometimes possible to win a dispute over criticism and, in the process, lose a contract or even a client.

Can You Stand Family Pressures? Income and work schedule pressures often cause family problems. If your family does not understand what is required in your work, that work might be affected, which will probably make the situation even worse. If your office is in your home, as is the case with many independent contractors, interruptions will be a continuing problem. As a contractor, you are most often called by a client when there is a schedule problem. The circumstances are often difficult. You must be able to work the hours required to complete the task.

Can You Follow Directions? An independent contractor is by definition, a temporary worker. Thus, the contractor is, in almost every instance, a subordinate, not a supervisor. One of the marks of a good subordinate, employee or contractor, is the ability to follow directions. But, because of the temporary nature of a contract, this ability is even more important for the contractor. This is not to say that you should never suggest a course of action, or another course of action, to the client. Doing so is part of your obligation to the client. However ... You must know, almost instinctively, how and when to make suggestions and when to keep quiet.

Can You Offer Constructive Criticism Without Offending? Offering criticism is a very difficult, and dangerous, subject. If you offer criticism, it must always be constructive. You must never voice destructive criticism. Criticism must be handled with the utmost tact and diplomacy. Unwise or ill-timed criticism can drastically affect the checkbook balance.

Can You Do What Is Necessary To Get The Job Done? An independent contractor often works completely alone on much of a task. (As a matter of fact, the Internal Revenue Service rules regarding contractor status preclude all but the most cursory supervision.)

You must be able to set your own objectives. You must plan the task, then carry out the plan in such a fashion as to meet the client's requirements, within the assigned budget.

Summary

Note that the major questions covered in this set of articles function as a cohesive whole, divide the decision process into manageable segments, cover the important factors of the decision process, and are of similar levels of importance to that process.

In your particular situation, it could be that one factor of the decision assumes more importance than others, but you must be the judge of that. These articles can offer only guidelines.

You must examine your answers to each of the major questions, then decide for yourself whether the answers are consistent with a move into independent contracting. As was stated earlier, there is no one correct answer to any question, there is only your correct answer.

The next set of articles (BYOB, 3.x) will help you to make certain that you accomplish the steps necessary to prepare properly for the transition and succeed as an independent contractor.

To read the rest of the series click here