Becoming a small business contractor is no joke. It is hard work, a lot of stress, financially hard, and very time-consuming. However, it can also be very rewarding in that you get to be your own boss, set your own hours, and take the jobs you want to take. There are many steps that must be taken in order to become successful as a small business contractor. There are many decisions that have to be made, people and businesses that have to be contacted, permissions and licenses that must be obtained, and plans that must be developed and executed.
The first step in this process is deciding what sort of contractor you want to be, then developing an appropriate business plan for that goal. You can become a self-employed contractor or an independent contractor. Either one you choose, you will need to seek out some financial backing. This will be used to cover costs of materials of jobs, tools needed, and paychecks for any employees you may have. Then, all of the legal and tax ordeals must be dealt with. Also, the decision must be made as to who you want to take contracts through. Will it be the government? If so, what form; city, state, military, or parks and recreation? The choice is yours!
One thing that must be a primary concern for anyone wanting to become a small business contractor is protection. By that, I mean insurance. Of course you have to have insurance that covers you and your business if one of your employees gets hurt, but you also have to have protection from other issues that may arise. For example, if you take a contract, but are unable, for an unforeseen reason, to fulfill that contract, your business could end up in serious jeopardy. That is what surety bonds are there for.
As an example, California is a great place to be a contractor. There is a huge population, which means a great deal of people will need your services. However, because of the size of military presence in the great state of California, it is common for contractors to take federally-funded jobs. The surety bond California companies can protect you from those unforeseen circumstances that were previously mentioned. These bonds are in place to protect everyone in the contract relationship; i.e. the contractor, the client, and the funder. As a small business contractor, you are or will be the one who determines your economic future. Therefore, you will want to make all of these decisions with as much care as possible.
Pros and Cons
There are many pros and cons to becoming a small business contractor. Here are some to consider…
Pros: Being your own boss can be the best idea ever; however, it is a true commitment that comes before all others, since it will be your financial future at stake. Being your own boss often times means earning more money per year than contractor employees do. This may take a while to build up to, but once you are there, you will be happier than kid in a candy store. Taxes are another pro of this option. There are all sorts of tax deductions and perks that the IRS offers to business owners and contractors, especially those who choose to do government contracts.
Cons: The first con that comes to mind is the stress involved in being your own boss. Being the head of anything, let alone a contracting business, is extremely taxing on the mind and body. It is full of tough decisions and hard work. Also, the lessened security of your job is a con. Because you are the master of the businesses fate, you cannot promise that you will always have work. Things like business debts, insurance issues, and tax issues happen all the time to the unwary contractor.
Make your decision wisely. It could be the best thing you’ve ever done!