As a first time contractor you’re likely looking for information on how to make sure it all works out for you. It’s really not that hard. Here are some of our best tips for first time contractors to make sure you get it right.
- Set it up right. Whether you decide to function as a sole trader, a company, a trust, or as a partnership, make sure you make an informed decision about the setup of your business. Do your research and consult a financial advisor for help.
- Get contracts in place. Being a contractor means having contracts ready to go. Have something written up and looked over so that if someone does engage your services, you’re ready to go straight away.
- Get your accounts in order. Open bank accounts in accordance with your business structure and use them only for business. One for setting aside tax and GST and another for transactions can be a good idea.
- Figure out how you will operate. Prepare your invoicing system and agreed payment periods. It can be helpful to use a cloud accounting software such as Xero for this.
- Do your maths. Know your worth and what your competitors charge. Consider your lifestyle and bills budgets and see where you can cut down on. You will want to funnel as much into your business at the start as you can. Consider having some savings as backup before going out on your own.
- How will you promote your business? Many contractors rely on word of mouth for business, however having a website, launching social media pages, and preparing client documents are good places to start to get the word out there.
- Don’t forget about the background. We know you are a contractor because you have passion for what you do, however don’t forget to think about the background of your business. Accounting, bookkeeping, tax lodgement, registering for GST, and other admin tasks will need to be dealt with. Many contractors are fine to do some of this themselves, however it can be best to leave it to an expert if you can afford it.
- Insurance is vital. Getting the right insurance in place before commencing work is important to make sure you are correctly protected in the case of a claim. Insurances to consider include Public Liability, Professional Indemnity, Equipment Cover, Tax Audit, Personal Accident and Illness Insurance.
- Have something to show. People you approach for business will want to see what you’re good at. Have some examples of work or client names ready to provide them to prove how good you are at your role and why they should hire you.
- Know what you’re getting into. Being a contractor for the first time can be a hard slog at first, but it can be so rewarding in the end. You’ll put in lots of hours, sometimes start off on very little money, and take barely any time off for sick days or holidays. Get ready for the ride of your life!
Of course all of this advice is of a general nature and should you need professional business advice consult a business planner or financial advisor. For all of your insurance needs contact Contractor Cover. We are the specialists in insurance needs for new and existing contractors.
Contact us today or fill in our fast online form for fast and easy insurance quote.