These days, independent consulting is one of the fastest-growing sectors in small business. Becoming a solopreneurs, or business of one, is attractive for a number of reasons. Working as an “IC” – the industry jargon for these one-person operations, offers experienced professionals freedom, flexibility and increased personal income.
But a caution: many professionals that take this step and become their own boss also encounter risks and challenges. It takes more than experience in your field and an impressive database of contacts to succeed as a consultant.
Without the proper resources and tools to manage the details of running a business, it’s easy to become distracted and lose valuable billable hours. Here are three common areas that you should watch closely if you don’t have an infrastructure in place to manage your independent consulting business.
- Finances. Billing, invoicing, expense tracking, reporting and paying taxes are critical functions that require a defined system. Attempting to manage these tasks will distract you from your core expertise and affect your ability to get paid in a timely matter.
- Contracts and Compliance. Consultants and hiring companies are at risk of audits and severe penalties if systems are not set up correctly to manage these administrative details and compliant tax remittances – in fact, many firms won’t even work with independent consultants unless the right structure is in place. Business insurance is another critical protection for ICs dealing with large organisations. The right insurance plan will address workers compensation, general liability and professional liability—freeing consultants to focus on their work, not worry about ‘what if’ scenarios.
- Benefits. Researching and finding benefits such as health insurance and retirement benefits are a part of making the transition from an employee to consulting. Consultants can spend an inordinate amount of time researching and evaluating plan options which differ greatly than group plans offered by corporations.
The $250 billion-and-growing independent consulting sector remains a big opportunity because now even a solopreneur can leverage sophisticated tools and resources to step out on their own and compete alongside larger firms.
Partnering with companies that offer an infrastructure for managing the risks and administrative details outlined will alleviate stress and allow you to focus on your core expertise, while maximizing every moment of your time.
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