The Most Challenging Parts of Being an Independent Consultant
At IProfessional we love partnering with Independents, both experienced and new, and watching them enjoy the many benefits of contracting. We also have the opportunity of guiding many individuals through the anticipated and unanticipated challenges of being an independent.
Many will consider the procurement of affordable insurance benefits and planning for retirement the two big challenges of going out on their own. These two concerns alone motivate many independents to join the growth member body at IProfessional. Members of IProfessional have multiple options for pre-tax medical and dental insurance and can participate in our 401(k) retirement plan, which includes an aggressive company matching program. Members also protect their clients, as they are additionally insured by IProfessional’s extensive business insurance.
While insurance and retirement saving challenges are at the top of many Independents list of challenges, there are a number of others that can present themselves as equally challenging. Below are four issues we see Independents facing:
Managing Inconsistent Revenue – We see many individuals go into contracting excited for the opportunity to receive an unlimited income, but you have to remember that this opportunity comes with losing a consistent salary. An inconsistent income is one of the biggest challenges for the majority of new Independents.
Managing inconsistent revenue is part of being an Independent, therefore, whether you’re experiencing feast or famine it is important to keep an eye on your cash flow and dedicate time to networking and developing new business. Members of IProfessional enjoy the benefits of having a personal business manager, while freeing up non-billable time to land new projects.
It is always a good idea for Independents to maintain a savings fund for emergencies. Having six plus months worth of business and personal expenses is ideal. A successful contractor should also know where they can cut business costs, whether it’s to put extra funds into your savings or business development. Regularly brainstorming ways to cut costs can help get you through the lean times.
Balancing Multiple Clients/Managers – Chances are that at some point you’ll be working with multiple clients or approving managers at once. During these times you may find that each client may develop high priority issues at the same time. As an employee you can simply ask your boss which project to complete first, but as a contractor both clients may expect you to drop everything and fix their issue first. Prepare the best you can for the unexpected challenges of balancing multiple clients.
Collecting Receivables – Getting your invoices paid by the client can be a nightmare. This will not be the case with all clients, but if you let them some clients will delay payment as long as they can. Getting to know your client’s accounts payable process and the key people to inquire with can save you much heartache. When it comes to collecting payment, it’s always good to have a partner like IProfessional who can follow up on outstanding invoices.
Keeping Up With Your Market – As an Independent you must keep up with your market’s needs. Gaining knowledge and sharpening skills is a big part of most careers. However, as a contractor you won’t have an employer providing you training or telling you what to learn. You need to anticipate your market to determine which specialties to become an expert in. Keep track of the job market in order to know what skills are in demand.
What challenges do you face as an Independent? How do you overcome them?