# Becoming an Independent Contractor



## smokeyquartz (Oct 24, 2020)

Does anyone have advice on becoming self-employed? This is my goal for some point in the future. I see employment as another form of dependency and loss of civil liberties and privacy. Employers are like the 5th arm of the government, ruling on what you may say, wear, what you must have done to your body to please them (mandated vaccines and pre-employment medical exams to see what pre-existing conditions you have. Yes, it is legal to do this as long as the employer doesn't base an employment offer on your not having pre-existing conditions. They'll just say they found a better candidate). I do currently have a job, but I am determined this will be the last time I work for someone else. It's always a one way street with employers and you can't be truly free while in perpetual servitude to someone else.


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## rstanek (Nov 9, 2012)

I’m now retired but I worked in the construction industry for forty five years, the last eleven years as an independent contractor, I went from custom home building to remodeling and restoration. I made better money as an independent than working for someone. You will do better tax wise also. The big difference working for yourself is you keep all the profits. But you also take all the risk. If I had to do it all over again, I would have become independent much sooner, you will be surprised on how quickly your business will grow......just be smart about it......treat your customers good and it will return....


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## Big Boy in MO (Jan 22, 2018)

I am an Independent Contractor running a small construction\remodel company for the last 20+ years. My suggestion to you is do your homework first. Some university extension offices will help guide you on how to open a small business from helping with the law compliance, to tax compliance to business plan writing to helping create and register your business name with the state. I also would recommend a tax firm that is used to small businesses and there tax requirements.
Now to the plus and negative sides, YOU ARE IN CONTROL!!! In control of your hours, days off, work schedules, work environment, fellow employees (if you get to that point), health insurance, all the bills, employees benefits and wages... You get the idea.
I will never; if I can help it; work for someone again. Being self employed will be the most freeing, demanding, exhilarating experience of your life. It will be scary and exciting at the same time!!! Two words of advice, always treat your customers with honesty and respect and it will be returned 10 fold, and I always have hired the most experienced people I could afford and that has always paid off and I have learned some things along the way. Good Luck!!


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## Chipper (Dec 22, 2012)

Self employed as a what?? I'd hang onto that job til you see how bad we get screwed over by kammy and crews first 100 days.

Looks like there maybe lots of restaurants for sale cheap.


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## Back Pack Hack (Sep 15, 2016)

Here's a story I read about hanging out your own shingle.

Years ago, Joe Sixpack got a job as a helper for Fly-By-Night Electric. He started out working with a journeyman wiring houses for Cut Corners Construction. Joe turned out to be a pretty good electrician, learning fast and working hard. As the years went by, Joe got pretty good at wiring houses. Soon, he was running the jobs himself, and had his own helper.

Then recently, Joe got to thinking. "Fly-By-Night charges Cut Corners ten grand to wire a house. I know I get paid about $1500, and my helper gets $1000. I know the material costs around $2500.......... so that means the boss is making five thousand just sitting at the office endorsing checks!"

So Joe decides to strike out on his own. "Man, this'll be great! I'll charge just $7000 to wire the houses, and with only $2500 in material, I'll pocket $4500 for each house I do....... Jeez, that's more than _three times_ what I was making when I was working for 'the man'!"

So Joe hangs out his shingle. He doesn't have any health insurance, thinking he'll get that later when things really get started. Suddenly, he realizes he needs to be licensed. So he takes the test, and spends more money for the test and license. He also doesn't understand that driving his own truck costs money, both in gas, repairs, insurance, etc.

All fired up, he gets his first job for Cut Corners. Right from the start, Cut Corners wants a current liability insurance certificate. So Joe forks out $3000 for insurance. A few weeks later, he gets a letter from the state saying he's not a registered contractor. So another $600 is spent. Oh, yea, the city says they need $1250 for a permit.

A few days into the first job, Cut Corners says they need temporary power. Joe didn't figure the cost of a temp pole into the job, but he builds one and gets it hooked up. Joe finds out he needs more than a 3/8" drill and 4-foot stepladder. So he goes out and buys more cords and a couple ladders. Every time Joe needs material or another tool, he'd drive down to Home Depot and whip out the plastic. Pretty soon, he realizes he's a couple days behind schedule. Why? He's working alone and doesn't have his old helper with him.

So Joe starts working 12-hours days, and a couple Saturdays as well. He skips his daughter's dance recital, and misses his son's Little League game. He comes home dirty, tired and grouchy, which cause his family to stay away from him.

By the time the house is roughed in, his credit card is maxed out and Joe needs to borrow money from his parents. "Just until I get this job done, then I'll be rolling in dough" he tells them. He borrows even more money just to buy the material he needs to trim the house. By this time, he has alienated his family and taken his credit rating down below 400.

And the sad truth is, by the time job is done, he's been paid only $7000 and has spent $14000 just to 'be in business'. So he tells Cut Corners the next job will be $8500, thinking he can 'make it up' on the future work. But even that 'extra' $1500 'from the next job' won't cover his $7000 shortfall. Besides, Cut Corners won't hire him again because Joe caused them to get behind on their schedule. And to add insult to injury, they found someone else to do the job for less.

Dejected, Joe goes home, only to find a letter from the IRS saying they want $3250 for the income tax Joe owes from that job. The state also wants $675 for sales tax. All the 'profit' Joe thought he was going to make went to pay his bills, leaving nothing to pay his parents back with.

And who did Cut Corners hire to wire their next house? Joe's old helper from Fly-By-Night!


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## ND_ponyexpress_ (Mar 20, 2016)

I am a contract supplier for the USPS.. my own boss essentially. I am responsible to supply someone to deliver mail (so I hire myself). I used to have multiple routes (and employees) but eventually did the math and realized I was just wasting my profits on taxes and vehicles. It is possible to get many routes and have a workforce and stack the 10k profit from each contract and sit back and do nothing but manage my business, But essentially I am responsible for every route as the supplier. If I lose an employee, and can't find a replacement, I have to do it myself. If I fail to supply a person for a single contract, they can yank all of my contracts... So I chose to remain humble and work my 3 hour days for myself and am happy with that! Yes I have to work 6 days a week, but there is a certain joy in being home when my kids leave for school and being home when they arrive!


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## SOCOM42 (Nov 9, 2012)

OK, in 1980 I started my own business on my own land, built the building the year before myself out of concrete and steel.

I also did all the electrical and plumbing myself, it took a year to build it after working a regular job all day.

I even rented a crane to hang the steel beams myself, clear span inside.

I had 16 people working for me during the gulf war and 6 in regular times, men and women.

I had one person just to keep up with payroll deductions and taxes.

I am a tool and die maker by trade/ tool design engineer by profession.

The last place I was employed knew I was putting a shop together, we had an arrangement,

I could leave whenever as long as I had done what needed to be done.

The job there required little effort, I ran a jig grinder which I bought for the company,

they had no idea about them other than they needed one.

Very few people know how to do everything on them or even run them at all.

I put every cent I had/made into my shop, when the building was done and the first series of machines in,

it was all paid for, no debt at all.

In 1984 I brought in a half million dollars worth of CNC machinery with $50 thousand down on it, paid it off in 6 years. 

All during the years the shop was open, I worked 50-80 hours a week in it.

In 2005 I retired from full time work, still work in the shop part time repairing guns.

At least I did what I wanted to do for myself, and created a reputation that still stands out today in the products I made.


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## smokeyquartz (Oct 24, 2020)

Thanks everyone. It is what I thought; all the risk but all the reward as well. 
@Chipper I'm not going to leave immediately. I'm a cautious person and believe in having a plan in place before doing anything. I just wanted to hear the successes of others.

And, I know I wrote "independent contractor" but I didn't mean an _actual_ contractor doing construction work; I was just using the legal term for self-employed.


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## SOCOM42 (Nov 9, 2012)

smokeyquartz said:


> Thanks everyone. It is what I thought; all the risk but all the reward as well.
> @Chipper I'm not going to leave immediately. I'm a cautious person and believe in having a plan in place before doing anything. I just wanted to hear the successes of others.
> 
> And, I know I wrote "independent contractor" but I didn't mean an _actual_ contractor doing construction work; I was just using the legal term for self-employed.


In today's world, "independent contractor" generally means, and what I thought you meant, soldier of fortune, aka mercenary.


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## danben (Mar 23, 2020)

smokeyquartz said:


> Thanks everyone. It is what I thought; all the risk but all the reward as well.
> @Chipper I'm not going to leave immediately. I'm a cautious person and believe in having a plan in place before doing anything. I just wanted to hear the successes of others.
> 
> And, I know I wrote "independent contractor" but I didn't mean an _actual_ contractor doing construction work; I was just using the legal term for self-employed.


You may want to look into a certificate program for small business management convenient to your area. Not that the certificate itself is worth more than something to hang in the bathroom - either on the wall or on a roll - but the information is valuable. You may not need a formal business plan, but having one helps if you want to finance anything. Basic book keeping is critical; not just debit and credit but also cash flows and financial planning. In the case of poor Joe up above, the IRS may have wanted a cut, but his expenses are deductible and he can depreciate any non-consumables that he bought. There is a lot, but you need to start gathering information from people who actual know stuff, not just from books and the internet. I wish you luck. I went freelance - made much more than when I was an employee. Then again, I had to take much more risk for that reward.


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## jimcosta (Jun 11, 2017)

*Smoky: * I totally agree with Big Boy In Mo. Do your homework first.

I spent my career on the business side of the street. I was a CPA and a Paralegal. I was in Public accounting for about 4 years then worked for businesses.

On numerous occasions i freely helped and advised friends or clients how to start and manage their businesses.

First check with a University Extension office. They are paid by the Fed to help you. Take it. Its good and free.

In that process you must define your business structure. Should you be a corporation or a sole proprietor.

Learn how to keep simple books. Learn simple employment law. Learn simple contract handling.

Get your spouse on board.

Then roll up your sleeves and go for it when you are ready.

If you contact me direct I can freely advise you on your legal setup. There is a way to do it so that you are legally covered personally and can screw the IRS an awful lot.

Oh yeah, don't forget to check with the county to see if they have crazy rules to hang out your shingle. Most don't but be certain.

You can't win at monopoly if you don't know the rules.

P. S. If you don't form a regular (C) corporation or do form a Sub-S corporation, or work outside of a corporation, set aside 15% to 20% of your job profits because you will owe that to the IRS at year end.

Best of luck to you. *Jim* [email protected]


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## Michael_Js (Dec 4, 2013)

Setup an LLC, limited partnership - limit your liability!!

LegalZoom.com has lots of info and my wife created her LLC that way...

Peace,
Michael J.


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## jimcosta (Jun 11, 2017)

LLCs are easy to form but expensive to maintain. They are great for certain businesses and terrible for others.
It all depends on the nature and size of the company.

There is no stock answer as to the type of business structure to choose.
They all have benefits and drawbacks. It depends on who you are and where you see yourself going in the future. Pick wisely because in some cases you can't go back.


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## Slippy (Nov 14, 2013)

You may also look into 1-800-ACCOUNTANT to help you with accounting. Good luck!


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## Back Pack Hack (Sep 15, 2016)

When you work for yourself, you get to sleep with the boss' wife!


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## bigwheel (Sep 22, 2014)

smokeyquartz said:


> Does anyone have advice on becoming self-employed? This is my goal for some point in the future. I see employment as another form of dependency and loss of civil liberties and privacy. Employers are like the 5th arm of the government, ruling on what you may say, wear, what you must have done to your body to please them (mandated vaccines and pre-employment medical exams to see what pre-existing conditions you have. Yes, it is legal to do this as long as the employer doesn't base an employment offer on your not having pre-existing conditions. They'll just say they found a better candidate). I do currently have a job, but I am determined this will be the last time I work for someone else. It's always a one way street with employers and you can't be truly free while in perpetual servitude to someone else.


Its a good way to go broke. Be careful. Would think success might entail doing something you enjoy doing anyway. It always helps to know what your doing. My oldest is in the wholesale grocery bizness and says heart breaking to see retired yups investing in cutesy little restaraunts and not knowing what they are doing to loose their shirts and wind up as door greeters at Walmart of a school crossing guard etc. Kindly keep us up to speed on it Thanks. I thought I might enjoy being bar tender at a hooer house back in my old sinning days. Try sales. Funerals are big money makers. Have you got a suit and neckties? A fellow gave me a bunch of real silk ties is you need any.


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## Back Pack Hack (Sep 15, 2016)

Get market research done.
Get a lawyer.
Get an accountant.
Get a banker.
Get one years' worth of wages saved up.
Get a business plan.
Get a balance sheet.
Get good credit.
Get advertising.
Get customers.
Get going.


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## Go2ndAmend (Apr 5, 2013)

Just join your local BLM chapter and you’ll get paid for vandalizing and burning down all the local businesses in your area. You also get paid for it by all the Hollywood and Silicon Valley liberals. Once you have destroyed all of the businesses, at some point there will be a lot of work for people who actually know how to work to rebuild them. Also, once Sleepy Joe gets into office, become a Democrat and lots of lucrative Chinese contracts and other free money will flow your way. Just my two cents.


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## Steve40th (Aug 17, 2016)

My wife is a Realtor, and one thing I will say being self employed. Keep great records, receipts etc. And get a good CPA..
Her first CPA sucked. He didnt advice LLC or S Corp and her first year she owed big time taxes. He didnt expect her to do as well as she did.. Never had to take a loan out to pay IRS. Never again..


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## stevekozak (Oct 4, 2015)

Go2ndAmend said:


> Just join your local BLM chapter and you'll get paid for vandalizing and burning down all the local businesses in your area. You also get paid for it by all the Hollywood and Silicon Valley liberals. Once you have destroyed all of the businesses, at some point there will be a lot of work for people who actually know how to work to rebuild them. Also, once Sleepy Joe gets into office, become a Democrat and lots of lucrative Chinese contracts and other free money will flow your way. Just my two cents.


Added bonus is you will automatically become immune to the Kungflu!!! #riotingisthecure!!!!


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## charito (Oct 12, 2013)

smokeyquartz said:


> Does anyone have advice on becoming self-employed? This is my goal for some point in the future. I see employment as another form of dependency and loss of civil liberties and privacy. Employers are like the 5th arm of the government, ruling on what you may say, wear, what you must have done to your body to please them (mandated vaccines and pre-employment medical exams to see what pre-existing conditions you have. Yes, it is legal to do this as long as the employer doesn't base an employment offer on your not having pre-existing conditions. They'll just say they found a better candidate). I do currently have a job, but I am determined this will be the last time I work for someone else. It's always a one way street with employers and you can't be truly free while in perpetual servitude to someone else.


Imho, your best ad will be "word of mouth." 
Do an excellent job providing what you do - keeping in mind the importance of public relations.


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## bigwheel (Sep 22, 2014)

Know once a person goes from a salaried job to self employed it scares bankers to death and a person cant borrow any money.


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## stowlin (Apr 25, 2016)

Advice was given to me, and I followed it. 

If you mow lawns for people mow them better and charge less for it then others and you will thrive. This is what I did. I managed people’s portfolios as a fiduciary obligated to them not a commission and my management fee was less then companies doing the same. It took me 9 years to retire doing that.


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## stowlin (Apr 25, 2016)

bigwheel said:


> Know once a person goes from a salaried job to self employed it scares bankers to death and a person cant borrow any money.


Buy a whole life insurance policy and borrow away. It's not that hard, and it's not that costly.


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## Maine-Marine (Mar 7, 2014)

You have to have a skill that a company needs but not full time.

it has to be a skill that enough people need it from time to time to keep you in money

if it is a skill that is needed everyday then a company will just hire a person full time

like electrician or plumber.. they are needed from time to time but no company keeps them on staff

Fedex uses contract diesel mechanics

many companies contract out tower climbers.. and by the way -tower climbers are freaking well paid.. of course they have some serious insurance costs also


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## Back Pack Hack (Sep 15, 2016)

bigwheel said:


> Know once a person goes from a salaried job to self employed it scares bankers to death and a person cant borrow any money.


Because self-employment is typically doomed to failure.


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## Pir8fan (Nov 16, 2012)

smokeyquartz said:


> Does anyone have advice on becoming self-employed? This is my goal for some point in the future. I see employment as another form of dependency and loss of civil liberties and privacy. Employers are like the 5th arm of the government, ruling on what you may say, wear, what you must have done to your body to please them (mandated vaccines and pre-employment medical exams to see what pre-existing conditions you have. Yes, it is legal to do this as long as the employer doesn't base an employment offer on your not having pre-existing conditions. They'll just say they found a better candidate). I do currently have a job, but I am determined this will be the last time I work for someone else. It's always a one way street with employers and you can't be truly free while in perpetual servitude to someone else.


I've been a self-employed CPA for 30 years with 4 months left until retirement. My suggestion is to buy and hour or so of time from a CPA that works with small businesses.


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