Becoming Your Own Boss (BYOB, 7.5)

This series of articles covers topics that will hopefully not be needed for you and your independent contracting business, namely what to do "If Things Go Wrong". This sixth article of the "If Things Go Wrong" series tries to anticipate the main things that might go wrong for you in your independent contracting business, and continues the discussion of how you can address the problems that you might encounter as an independent contractor.

Addressing The Problem

In many cases, just recognizing a problem and determining its cause are all that is necessary to solve a problem. Much of the text in the prior sections dealt not only with identification of problems, but also some possible solutions to those problems. The procedures in this section deal more with problems for which there are no immediate, easy solutions. We deal with only more general classes of problems in this section, so if your problem is unique and specialized, you will need advice from experts or friends, or you will have to come up with your own solution.

There are four basic ways of dealing with problems:

1. You can head things off or divert incipient problems before those become insurmountable problems. This topic was covered in article BYOB, 7.4.

2. You can deal with a current problem in any way that is necessary to solve it, and then learn from the experience so you will never face the same problem again. This topic is covered in this article.

3. If the problem truly is insurmountable, you can do whatever is necessary to minimize the damage so you and your business can survive.

4. If the problem forces the demise of your business, you can learn from the experience so your future endeavors will meet with better success.

Dealing With A Current Problem: As was pointed out at the beginning of this series of articles, "STUFF Happens". Sometimes you will be presented with a problem that won't go away. There is no way you can divert it or lessen its effect, so you must simply deal with the situation.

When presented this type of situation, it is best to take careful note of what went wrong and why, and then get on with the rest of your life. If you correctly assess the cause(s) of the problem, you will of course never do that again. Be sure, however, that you find the real cause, and not just a surface symptom of the real cause. Some brief examples illustrate the difficulties you face:

• Because of a lack of time, you bring a subcontractor in to help on a project. Although the project is completed on time, the client complains about the subcontractor's work and vows to not give you another contract. Your first impulse is to never use this subcontractor again. On closer examination you find that the client feels that he/she was abandoned by you, and that a second-stringer was brought in to finish the project. Your real problem was that you didn't spend enough time with the client to make him or her feel good about the actions that you took to complete the project on time.

• It has been over 30 days since you submitted your first invoice and you still haven't been paid. Your entreaties to the client have had no effect. Your first impulse is to stop work on the contract and start legal proceedings. On closer examination you find that the client took your sales pitch literally and told the accounts payable department to treat you as a materials purchase. Their ongoing materials purchases are handled on a net-90 basis, so you aren't scheduled to be paid for another 60 days. Your real problem is that you didn't follow through after you got the contract and make sure your invoices would be processed in a timely manner.

• Your current client's project seems to be taking too much of your time. You have had to eat a lot of costs and work extra unbilled hours to keep the project on time and within budget. Your first impulse is to now raise your rates with all clients to make up for the shortfall on this contract. Your real problem is that you have taken on the blame for your client's poor planning and lack of project definition. You should have billed for all of your efforts and had the gumption to defend those billings with your client.

As you can see from these examples, the root causes of problems are not always obvious. You might also note that we feel that you, the independent contractor, have the ability to control your own fate and the ability to make sure that most problems never happen. When confronted with problems, it is best to learn from the problems and then quickly move on.

What Next?

This is the final series in the Becoming Your Own Boss set of articles. If you have been following the set in the numbered sequence, you have been familiarized with today's employment situation and then examined your own situation in the BYOB, 1.x and BYOB, 2.x series. The BYOB, 3.x and BYOB, 4.x series took you through first preparing for business and then actually establishing your business. The last two series (BYOB, 5.x and BYOB, 6.x) taught you many of the aspects of marketing your services and the accounting topics you need to be aware of as an independent contractor.

The next article (BYOB, 7.6) continues the discussion by going into how you can perform damage control on the problems that you might encounter as an independent contractor.

To read the rest of the series click here