Being your own boss is something many people strive for, but it takes more than just the desire to run your own business to work. An independent contractor is anyone who is in business for themselves.
They file taxes as their own entity or as a self-employed person. When you are a contractor, you have control over who you work with, what you charge and what type of jobs you perform.
There is unlimited freedom and potential to grow your business however you see fit, and a booming freelancer industry makes this the perfect time to consider breaking free from the 9-to-5 and launching your own startup.
But before you turn in your two-weeks’ notice, ask yourself these five questions to get a better idea of whether freelancing is the right career path for you.
Do I Know How to Turn My Idea into a Business Plan?
Having an idea for a business and operating one are not the same. Ideas alone are not always easy to execute, especially if your dream comes with a high startup cost that requires capital you don’t have.
Ideas can also be clouded by your own personal judgement. Run yours by some friends and family and ask for their honest feedback. Ask yourself:
- Is there a market for what I want to do?
- Do I know what resources I’ll need to make this happen?
- Do I know how to acquire clients or customers and generate revenue?
There are few companies that can start and thrive with zero starting funds. Capital can come from many places, though, and you may explore options like small business loans, personal loans and even reverse life insurance policies.
You can review a guide on what reverse life insurance is and how to convert a policy to get money for your business.
Do I Have the Right Skills to Satisfy My Clients?
Market research is fundamental in the early days of startup development. You have to identify what your target audience’s best options already are, then figure out how you’re going to stand out among them.
Positioning yourself as the greatest option means fully knowing what services and standard of quality customers in your niche expect. While studying other independent businesses, you have to compare your own skills to their services. Can you convert your knowledge and abilities into viable customer solutions?
All hope is not lost if you realize that there is still a great distance between you and your competition. Rather than envy them or feel defeated, learn from them. What are they able to do that you would like to learn?
It doesn’t matter whether you have to go back to college or spend a few years building yourself so you can build a better business later. Take this time when you have no obligations to anyone to be fully committed to improving yourself.
Have I Obtained Appropriate Licenses and Done My Research?
As straightforward as this process may be, it is commonly overlooked by people whose eyes are fixed more on their ambitions. It’s exhilarating to dream up a business and slowly watch it take for, but it can all fall apart in an instant if you haven’t taken the proper legal steps to protect your entity and yourself.
Make sure you research any requirements for being registered as self-employed in your state and respective field. For example, you may want to become a life coach, but that doesn’t mean you are legally permitted to offer therapies like CBT, no matter how well you know them. In order to do that, you would need to hold a master’s and proper licensing through your state.
Have I Developed a Brand Image?
Your business and brand are distinct but equal elements in that one can’t exist without the other. Think of your business as the person and your brand as their appearance. It’s what the outside world sees and interacts with.
Your brand shapes what type of marketing efforts you take, how you present yourself in advertising and even what type of consumers are drawn to your services.
A strong brand is born out of intense research and in-depth knowledge of your field, your audience and yourself. It fully encompasses not only what you want your business to be but what your ideal clients are most likely to respond to.
Often this image beings with your business name, picking a strong name to be the first impression for your business is essential. For example, there are great names for bakeries that would not suit a sandwich shop, knowing that your business name should feel specific and authentic to your product or service is a high-value piece of information.
Am I a Good Boss to Myself?
Can you set and meet deadlines, write, and send invoices, file taxes and everything else a contractor does? Personal skills come into play when you are solely responsible for ensuring everything about your startup is done by the books.
There won’t be anyone handling your retirement contributions, health insurance or liability protection. You may consider hiring an accountant or financial advisor to help you keep organized, but if you aren’t self-disciplined or struggle to define and meet goals, then consider working on developing these skills before becoming an entrepreneur.
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