If you’re ready to take the leap into working for yourself, you can save some hassle down the line by setting your business up the right way from the beginning. First things first: If you’re confused about whether you are/want to be an independent contractor or a gig worker, we define the difference here. If you’re sure it’s the independent contractor world you want to explore it’s a simple process if you know the steps.
How Set Yourself Up as an Independent Contractor
STEP ONE: Get set up
Choose a name and decide on the best form of business ownership (e.g. LLC, S-Corp, C-Corp, etc.) for your situation. This will impact many things including taxes and your personal liability. For more info, visit
www.sba.gov/business-guide. Most states have unique license and permit requirements for business registration. This information is readily available online by searching “register a business in <your state>.”
No matter where you do business, you need to apply for a federal Employer Identification Number (EIN) here.
STEP TWO: Protect yourself
Protect yourself and your business with insurance. Talk to your agent about General Liability and Workers’ Comp. General Liability protects you against claims for personal injury, property damage, associated legal fees, etc. Worker’s Comp pays for you and your employees’ medical expenses if they’re injured while working. Even if you don’t have employees, many companies require vendors to carry this coverage.
STEP THREE: Set up banking
It will make your life eleventy billion times easier if you keep your business and personal finances separate. Set up your bank account and get any credit cards you need in your company name.
STEP FOUR: Market yourself
A great way to market your business is through a nice looking, informative website. You can hire someone to customize it or your can build your own. Visit www.godaddy.com for more information.
STEP FIVE: Equip your business
Independent contractors typically don’t use their clients’ equipment. You may already own everything you need. If not, consider leasing your equipment.
STEP SIX: Manage your business
Develop an Independent Contractor Agreement. Your larger clients will most likely require you to sign their own such document, but it never hurts to have your own. Either way, this is an important document. Click here to order a state-specific agreement, or do an online search for “independent contractor agreement example.” Next, set-up an accounting system for invoicing and receivables tracking. Many independent contractors use Quickbooks or another DIY software to pay yourself and pay your self-employment taxes. You can also hire an accountant to do it for you.
STEP SEVEN: Do something great
You did it. You’re in business. Now you can get busy contributing to the world in the ways only you can. Visit Crew Connection to see how we can help you fill your pipeline with high-quality work.