Essential Business Hacks for Independent Contractors
Over 10 million Americans are independent contractors, according to the most recent estimates by the U.S. Department of Labor. Whether that means you do freelance work or have started your own company and hope to employ many people yourself one day, most independent contractors have one thing in common: they are learning as they go.
Here are some tried and true tips to help you navigate the time, energy and, most importantly, money-sucking pitfalls of entrepreneurship, so you can actually appreciate the joys of working for yourself:
Get Eco-Friendly
Your customers will love you for getting eco-friendly and so will your bank account. Eliminate paper from your processes as much as possible. Having everything digital makes your business run faster and smoother and saves you money and time down the line.
If you travel for work and your vehicle is not the most fuel efficient, you’re throwing money out the window every month, as well as contributing to smog and pollution. But that doesn’t mean you have to invest in an expensive electric car to save precious startup money. Check out the EPA’s new SmartWay certification for a list of budget-friendly vehicles that reduce carbon emissions and have saved drivers over $16.8 billion in fuel costs since 2004.
Buy in Bulk and Ahead of Time
From office supplies to packing materials, the biggest waste of time and energy is buying things you knew you would need at the last minute and paying full retail price. If you’re a retailer, seek out wholesale options and buy in bulk for the maximum discount. Look into a Costco membership for any and all office supplies. Office furniture can also be found at the local thrift store, furniture rental company or hotel furniture liquidators for pennies on the dollar.
Don’t Let Cash Flow Stop You
You are bound to have cash flow issues at some point. The thrill of working for yourself can quickly become the anxiety of "why on Earth did I think I could stand not knowing how much money I was going to be making each month?" Your bills may be fixed, but your income is not, so saving money prior to striking out on your own and during the startup process is crucial. It’s impossible to foresee all the hidden costs that are sure to crop in the beginning, so you need a little cushion.
But not even a lack of cash flow can stop you these days. With the popularity of crowdfunding, job placement services and Craigslist, there are outlets everywhere for the hard working, resourceful, independent contractor. Leave no stone unturned and check to see if you qualify for any small business loans or grants from the SBA.
Leverage Free Technology
Marketing yourself doesn’t have to cost you a fortune, but beware of companies looking to take advantage of unwitting new contractors. There are a lot of lead referral services out there that boast thousands of job postings for everything from nannies to graphic designers. Often they pull the old bait and switch move: you spend hours creating a profile for their sites, adding product pictures, reviews, references and certifications only for them to ask for a credit card and a hefty fee when you’re about to hit submit. You don’t want all that work to go to waste, so you plunk down your credit card against your better judgment and pay for a month (or three) of leads that, honestly, may not even exist.
The good news is you really can market yourself for free. Research your competitors and find out what social media outlets they’re using. Take notes and improve upon their tactics to stand apart from the crowd. Many SEO experts recommend using five or less social media sites and keeping your focus on original, quality content. And don’t discount the power of LinkedIn for finding and connecting with the top names in your industry; it’s like the Facebook of finance.
Guest Blogger: Stacy Eden is a Phoenix, Arizona native with a passion for art, power tools, and historical significance. She draws inspiration from classic cars, ancient mythological sculptures and jewelry designers such as Delfina Delettrez, Shaun Leane, and Dior Jewellery creative director Victoire de Castellane.
I came across a great question asked by a group member while participating on LinkedIn. I replied to the question on LinkedIn, but also thought it would make for great info to share with other contractors who might be asking the same question.
Also consider, as a business owner you may personally be measuring your profitability including the costs of any investments for a one year period. As a result may not see a profit in the bank at the end of the year. However the money spent on those investments is still considered profit for business and tax purposes. This is the case because when filing your taxes the government sees these investment type purchases as assets paid for with profits. To get tax deductions for these assets you are allowed to depreciate the assets over time to reduce their value and take tax deductions for them over several years or more. Essentially, for tax purposes, the government measures your profit by combining the money you earned and still have; along with the assets you bought using any profits, as your total taxable net profit. Also, any money your business paid out to you the owner as profit distributions over the year will be considered part of your business’ total taxable net income.
Again, great question to ask. I hope this article helps. Being a business owner means you have to understand how to manage and protect the profits you earn, but at the same time manage how you will be taxed on that same money. By not knowing or ignoring these considerations you can be working hard to make money while profits that could have stayed with you are going out the door to the government as taxes. That said there are a lot of great reasons to have a proactive accountant helping you and your business instead of a historian type accountant who only files your taxes for you when everything is already said and done for the year.
Here are a few times when saying nothing might just be the best thing to say:
A good number of contractors at one time or another find themselves in a financial hole. Rather than figure out how they got there, they just keep working, often assuming by working harder or longer hours they will eventually get out of the hole. Unfortunately many of them just dig a deeper hole and eventually the hole is so deep they can’t climb out so they stay in it. Sometimes the hole can even cave in all around them and bury them and their businesses. If you want to avoid the most common reasons contractors get into financial trouble 
Many remodeling contractors may be operating their businesses illegally without even knowing it. In addition to construction supervisor licensing, most states now have some type of licensing or registration requirements for contractors who offer and or perform home improvement work. Home improvement contractor licensing and regulations govern how contractors conduct business, not how they build or renovate at the job site. Fines and penalties for lack of compliance can be substantial, including losing your right to conduct business. The specific details of home improvement contractor laws and regulations are different from state to state, so it’s a good idea to make sure you’re aware of and understand requirements where you work. 
Your goals must be measurable
Putting the pieces together
Looking back our ideal customer was a middle aged middle market married couple, both working with either very young or high school age children. These people worked hard to earn their money and therefore respected the fact that my employees and I also worked hard to earn our money. They looked at my employees as partners in the project, not nail bangers. Due to the age of their children, they had little time to do their own work, they didn’t want to move or change school systems, and they typically needed more space at their homes. Unlike wealthier clients I had worked for, these clients would say; “I know I will owe you the next payment on Monday, but I won’t be here. Can I pay you today”? I never had to use my line of credit to finance their projects because waiting for a stock dividend delayed progress payment.
These clients needed additions to their homes, but we didn’t want just an addition. We wanted an addition with a kitchen and/or a bathroom. We came to find that simple family room or bedroom additions came with too much competition from laid off framers or inexperienced low price remodelers. If the project included a kitchen and or a bathroom, most low price completion lacked the skills to design and build the project. We also found that these projects, because of the baths and kitchens, were material and sub contractor intensive. We found it easier to mark up and manage more materials and subs, rather than more labor. We also found they brought in more gross profit in less time than labor intensive projects.
We purposely timed our marketing for addition work relative to the New England weather realities as well as the typical lead time required to sell, design and permit additions. The idea was to get foundations in the ground and shells constructed before the weather made it impossible or impractical to work in the cold. Using similar tactics, we marketed in advance for Kitchens, baths, attics and basement remodels to fill the cold months. We marketed these projects to the same client type. The attics and basements typically included bathrooms.
As the business grew and competition increased within our market, we decided to expand our footprint. Through experience and detailed job costing we came to see that commuting more than 30 minutes from our office typically lead to increased costs, compromised supervision on projects, a dip in client satisfaction and therefore a dip in referrals. We also found it ideal to work on homes built in the 60’s or later. These homes were built with standard lumber sizes, drywall rather than horse hair plaster, PVC drain lines rather than cast iron, copper water supplies and poured concrete foundations. These homes were easier to work on, they made it easier to anticipate and estimate costs and they were typically one of many similar homes within concentrated subdivisions. By marketing to target home owners in target neighborhoods within 30 minutes of our office, we attracted addition projects in high exposure locations, leading to more work and more referrals in those same areas.
To me the why was the easy part. The why’s were all the benefits my business came to enjoy as a result of defining our ideal niches, the biggest being improved profitability. If you concentrate your efforts in a defined area, you and your team naturally become better and more competent at what you do, leading to improved efficiency across your business. We realized efficiency in our marketing efforts because we knew who and what to market for and how to get their attention. Estimating and sales also became simplified because projects and clients were very similar. It was easier to find and train good employees and subs because the work types were fairly consistent and the clients were almost always a pleasure to work with. Because we could successfully deliver the right projects to the right people we enjoyed a steady flow of high quality referrals. Because, because, because…
An experienced Management Team that has created and follows a strategic and sustainable business plan, implements industry best practices and continuously identifies and mentors strong leadership within the team in each department.
A 
A Design System that properly identifies and documents the information needed by the client as well as the Design/Builder's project team and serves as a communication tool to make sure the design and final project serve the client's purposes within the agreed budget and timeline
A 
Thanks for your question. It’s a great one! I’m glad you are asking before you start out on your own. That makes you very different than most. 
Professional Remodeling Management
