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Business Question - Considering Independent Contracting
Posted on 10/8/24 at 11:21 am
Posted on 10/8/24 at 11:21 am
I am looking at the possibility of doing independent contracting to close out this year and start next year. I have an established LLC on paper, but that is all. I would be looking for software development and software consulting type work. What boxes do I need to check to protect myself and make sure I am setting myself up well by doing the contracting work versus working full-time. I have always been employed full-time which is why I am looking for advice here.
The short story is I am being laid off at the end of this month. Essentially the business unit I am in is being dissolved. I am actively looking for full-time work, but the idea of being part-time through the holidays is enticing. My kids will be out of daycare for stretches of time and deer season is cranking up. I don't want to limit myself if a contract is available immediately while full-time might not be as easy to find right away.
The short story is I am being laid off at the end of this month. Essentially the business unit I am in is being dissolved. I am actively looking for full-time work, but the idea of being part-time through the holidays is enticing. My kids will be out of daycare for stretches of time and deer season is cranking up. I don't want to limit myself if a contract is available immediately while full-time might not be as easy to find right away.
2
Posted on 10/8/24 at 12:07 pm to RickAstley
How much money are you going to need? The best thing to do is to take $5000-10,000 to start and open a business banking account and get a debit card and check book. Then pay EVERYTHING that's a business expense out of this account. Get something like Quicken to organize your expenses.
That's on your financial side. Its fairly basic from there, you just gave yourself an advance or a loan. Once you have made some money pay yourself back and close the loan out. CPA can help you with that better. From there, everything needs to be kept inside of the LLC and business account.
I'd suggest some sort of E&O or liability insurance if you think you need some.
That's on your financial side. Its fairly basic from there, you just gave yourself an advance or a loan. Once you have made some money pay yourself back and close the loan out. CPA can help you with that better. From there, everything needs to be kept inside of the LLC and business account.
I'd suggest some sort of E&O or liability insurance if you think you need some.
Posted on 10/8/24 at 1:40 pm to baldona
quote:
How much money are you going to need?
Are you asking how much I will need to run the business? I think the amount you suggested should be plenty to get me started. My main costs would be related to software expenses which I'll research. Thankfully I can use my house for an office and my existing laptop for the work. I don't expect any immediate travel expenses at this time, but that would be the only other thing that comes to mind.
Posted on 10/8/24 at 1:56 pm to RickAstley
Yes what I'm suggesting is that starting a business can be expensive and you are better off trying have more money than you need and not using it, than the opposite. It makes things a lot messier when you are constantly having to use your own money to purchase things and then count them as business expenses and pay yourself back.
Posted on 10/9/24 at 11:16 am to RickAstley
I'm a hired gun in the software space. I went the w-2 contractor route through a recruiter though because its less headache. Some of my co-workers went the B2B route. Not sure you can use the LLC although that might be company specific. Everyone I know that does it has a corp. Then hired a CPA to handle all of those logistics. You get paid more doing it like that than going the w-2 route, but you also have the added expenses of the CPA and health insurance ($$$). I dont think you need to start with $5-$10k in the bank. The company should be supplying any equipment you are required to use and pay for any travel that might come up, but again this could be contract specific. I would command a higher rate if those weren't covered and i need to pay them. You're selling your mind so "startup cost" for this should be very low, basically just corp setup and initial CPA cost. One of the bigger hurdles i hear my coworkers talking about is getting direct B2B contracts, often having to settle going through a recruiter who obviously skim a little off the top. They also sometimes complain about only getting "paid" once a month, but that could just be specific to how they set their corps up.
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