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Thoughts and ideas from Leonard tam
BE A SUCCESS IN YOUR OWN CONTRACTING BUSINESS
July 22, 2019 at 3:00 AM
by Leonard Tam
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INDEPENDENCE

So many people are lured by the promise of independence and its advantages in owning an independent business. Of course, such a step might require leaving rewarding employment in a strong company by assuming the risks of self-employment and launching out as a private entrepreneur. Given that you have the skills to make such a change, there are many considerations to be taken very seriously before making the switch.

The free-lance market is booming, for it his becoming the preference of many larger companies who wish to avoid expanding their own employer lists. There are many opportunities for the independent contractor in the market-place.

What is at stake? Everything! You must consider the predictable risks, and have flexibility for surprises. What are they?

BE SURE YOU KNOW THE SACRIFICES

As an employee or career company man, you will put in jeopardy all those benefits you are currently enjoying and perhaps taking for granted. Know what you are leaving. On balance, your current situation may be preferable.

What are you leaving? Guaranteed leisure time, a pension, retirement planning, steady paycheck, regular working hours and security for dependents may be jeopardized by a move to self-employment.

Be aware of your current lifestyle, financial situation, and retirement plans in order to decide. Confer with all those involved, such as spouse and family members.

Are you really an entrepreneur? Do you have the personality to accept full responsibility and accountability for all that happens in your own business? You must have the character and the passion for such demanding and stressful independence.

INITIAL FINANCING

Resources for capital investment are a must! The requirements vary according to the material needs of the enterprise. Should you wish to be a heavy machine contractor, the capital outlay will be very significant and daunting; however, if you wish to do computer contracting, a high-end computer and cell-phone may almost satisfy the capital expenditures.

Income from your new enterprise will not receivable for some time, so there must be funds to pay interest on loans and to support you and your family until the money starts to come in after the transition period.

With finances, ignore nothing: examine, scrutinise, analyse, predict and plan. Include any collateral assets you may want to use as a guarantees, such as personal real estate, on loans.

Get the right advice from reliable equity investors for an outline of financial requirements in your business plan.

THE NECESSARY BUSINESS PLAN

There only a few situations in which a business plan is not necessary. For most of you who need one, here are some guidelines:

· Perform market research as a part of a thorough analysis.

· Organise the marketing of your product and services to customers after your research.

· Obtain financing from loan institutions and investors: equity financing and debt financing require secure business plans in place.

· Forecast future expansion in infrastructure, equipment and personnel.

Have a solid business plan that can be updated on a regular basis.

FORMALISE YOUR BUSINESS: NAME, REGISTER AND INSURE

· Decide the legal structure of your business, as a corporation or a sole-proprietorship. If you incorporate, sign documents after the corporation’s establishment.

· Choose a business name and register it.

· Insure your business. There are many types that cover different areas. Make sure you are covered for all your concerns by consulting more than one agent. Not having insurance can lead to disaster.

· Open a bank account specifically for the business.

· Do not conflate home and business matters.

MARKETING

· You may have full-time clients from your former employment.

· Word-of-mouth is a great asset to spreading news about products and services.

· Create a marketing plan and learn basic marketing strategies, such as social media formats, to obtain your first clients.

ACCOUNTANCY

· In the initial stages to save money, you may want to do your own accounting.

· Software packages are available at reasonable monthly rates for invoicing, expense tracking and reporting.

· After growth, an in-house bookkeeper can be hired to fulfill these responsibilities.

DEPORTMENT

Manner represents you:

· Dress appropriately

· Behave with dignity

· Answer the phone properly

· Use an office space apart from your living space

· Be aware of social media customer reviews

These tips will build respect.

BEST PRACTICES BECOME YOUR REPUTATION

Businesses are successful with lifetime loyalty from clients.

· Practise honesty and integrity

· Under-promising and over-delivering and enhance your reputation.

· Making good on all mistakes

· Treat all clients as valuable individuals—remember special days like birthdays.

Take the time to add the extra.

ENGAGE MULTIPLE CLIENTS

If you have only one client, you may lose your ability to deduct expenses with the tax officials, particularly if your client is your former employer. Having more than one client allows you to deduct business expenses at tax time. You want to keep your self-employed status with the tax officials.

Your accountant can advise.

CALL IN THE EXPERTS

You will need some assistance. There are not enough hours in the day to do the accounting, promote marketing, implement social media, produce and deliver the good, and perform the service you have promised. Outsourcing will save you both in time and efficiency, and can be well worth the cost.

The ‘farming out’ of secondary tasks can free up time to focus on the core of your business. Employing family members can be an asset in many ways, as your accountant can advise.

TO EXPAND OR NOT TO EXPAND

Your business is doing well, and there are opportunities for clients out there; however, those factors demand expansion by hiring personnel or outsourcing.

Some considerations in expansion are:

Can you find qualified people who will maintain your quality in your specialised business?

The hiring process of advertising, collecting and scrutinising resumes, interviewing and making reference calls is time-consuming. Furthermore, you are now involved in labour laws and taxation. Your accounting costs will increase.

Consider staying small and maintain a positive cash flow. However, if the growth option is positive after serious analysis and you have the elements in order, go for it.

THE HEALTHY LIFESTYLE

Balance, balance, balance all your life’s components.

It is repetitious to say: Diet, exercise, relaxation, family time, emotional satisfaction, leisure, hobbies. These do not detract, they energize. They help create the better personal.

The slogan says, “All work and no play makes Jack a dull boy.” It’s worse, it makes Jack grim.