There is a learning curve for those retiring from typical employment to join the world of independent contracting because you’ll now be your own boss.
Here are some steps to get you started.
Come up with a business plan. As an independent contractor, you’ll need one, according to Hal Shelton, author of “The Secrets to Writing a Successful Business Plan” and a mentor with SCORE, a nonprofit that helps small businesses get off the ground.
Make it five pages. The first page contains your key messages, the customer problem you can solve and the reasons someone would hire you.
Pages 2 and 3 are for marketing strategy. Who is your competition? Who is your target audience? Where do they hang out? Do they attend conferences you can also attend? Where do they learn about vendors? Your go-to-market strategy is the most important piece of your business plan.
Page 4 is your bio. What do you have to offer? And Page 5 is the financial page, a summary for yourself with three-year projections. Your business plan is an evolving work.
Decide on a business structure. You can work as a sole proprietor or form a partnership. You may elect to form a limited liability corporation, or LLC, to protect your personal finances, your assets and your privacy.
If there is any chance you may get sued, you need an LLC, or someone can go after your personal assets, Shelton says. Your state taxing agency may have a special set of LLC forms.
And visit SCORE.org to find mentors to help you with your start-up.
Register a business name. This becomes your official business name to use in marketing, to open a business account and for communication with clients. To sign contracts and enforceable agreements, you must register your company’s name or DBA (Doing Business As) with your department of state.
It is important that your business name reflects the services you offer. Consider also setting up a basic website.
Hire a business attorney. Penn State’s Dickinson School of Law recommends talking to a business attorney as soon as possible to preemptively solve problems. Seek out a start-up or small business attorney. Whomever you choose, check references and look at their website and reviews.
Find an accountant familiar with your industry. An accountant can provide you with an overview of your business’s financial health, including taxes, budgets, transactions and projections. Keep good records of your revenue and expenses and consider hiring a CPA to do your tax return so you can get as many deductions as possible. Ask about their experience working with your type of business. Request references and do a background check.
Learn soft skills, stay motivated. If you cannot sell yourself, you will not make money, Shelton says. So, hone your people and time-management skills.
(Yvette C. Hammett is a contributing writer at Kiplinger’s Retirement Report. For more on this and similar money topics, visit Kiplinger.com.)
