6 tips for being a successful independent contractor

6 tips for being a successful independent contractor

Kim Mercado
By Kim Mercado
Feb 15, 2023
9 min read

Becoming a successful independent contractor is an attractive opportunity for many people working in construction trades. Many clients prefer to hire an independent contractor because of their flexibility, convenience and affordability, in addition to their skills. 

Despite all of those advantages, though, there are significant challenges in the field, and the competition can be formidable. Construction contractors starting out often face highly complicated legal requirements, high attrition rates among workers and a lack of funds. However, many of those challenges can be moderated with proper planning and patience.

So, how can you turn your work as an independent contractor into a success story?

Top 6 tips for success as an independent contractor:

1. Get the proper licensing and permits

Getting your construction contractor's license in states that require it is important for your credibility. Besides the legal ramifications of not having a license where it’s required, having a license is your ticket to financial independence. You can take on larger jobs, you can take out larger business loans, you get tax breaks and get protection from licensing boards. 

Each state has a different body that controls those licenses; for example, in California, it’s the Contractors State License Board, while in Louisiana it’s the Louisiana State Licensing Board for Contractors. A quick internet search should turn up the relevant body for your state. Note, some states require licensing on the local level instead of the statewide level. 

Regardless of what trade you’re in, independent contractors should check with regulatory bodies to understand all licensing requirements. We can give you a jump start on license requirements by state:

2. Get the independent contractor insurance you need

Accidents can happen anytime, from hammering a finger to damaging a client’s hardwood floors. Insurance is important because there are many risks involved in a contracting business. In fact, many states may require you to have coverage before they issue you a license. 

Therefore, liability insurance is particularly important for contractors. Business liability insurance isn’t for what happens to you, it’s for what happens to someone else because of you. It protects against the losses, damage or injuries that your business may have or may be accused of causing.

A well-chosen independent contractor insurance policy can provide your contracting company the much-needed financial protection for unwanted incidents and give you peace of mind that an accident doesn’t wipe out your cash reserves. 

Curious about the kind of claims NEXT sees all the time? Check out the most common contractor insurance claims.

3. Create a plan for running your business

You may think it’s easier to dive into operating your business and then get organized later, but with a little forward planning, you can make your whole life easier from the get-go. Start by thinking about your ideal operations and what your day-to-day will look like.

The systems you select for running your contracting business should make processes like bookkeeping, invoicing, scheduling, filing taxes and task management as smooth as possible. You should aim for a balance between services that may be free and those which may cost money but better meet your needs. 

In addition, consider the processes and policies for clients, vendors and suppliers and future employees. Your operations should be helpful by offering them crystal clear instructions on your work procedures.

Create a bidding strategy

Bidding for jobs can be super time-consuming, so many independent contractors don’t bid out as much as they should and then find themselves with dry spells. The key is figuring out how to bid consistently, so you have a steady stream of work.

Figure out what works best for you. Maybe you decide to hire a part-time estimator or outsource it to someone else. Maybe you set aside two mornings a week to work on bids and the afternoons for client visits and meetings. 

You might also consider bidding on a mix of big and small projects of varying types to help expose you to more customers than you might otherwise meet.

4. Put together a reliable team

One of the best tips for independent contractors is to remember that you don’t always have to do every single thing yourself. Even if you are just getting started, it’s sometimes better to source help from the start to set off on the right foot and save yourself some headaches — especially if it’s an area you’re unfamiliar with. 

For example, you might want to have these experts in your contact list:

  • A business lawyer. They can help ensure you’ve set your business up properly, help you review contracts and documents and ensure you’re taking the right steps if you hire employees or other help.
  • An accountant. An accountant can help set up your bookkeeping and invoicing systems, will help during tax time and can advise you on your business’s finances.
  • A marketer. Marketing professionals can advise you on how to grow your business and generate new leads. Depending on their services, they can help set up your website, social media pages, help you to price your services and convey why clients should choose you over your competitors.
  • A business consultant or mentor. You’ll have to make a lot of decisions as a business owner, but you may lack the experience to ensure these decisions will benefit your business. A consultant or mentor can be a sounding board or help you create plans to achieve your goals.
  • An assistant. While not an expert in a certain field, this person can be an expert in your business. As you grow, you might consider even part-time help to delegate tasks, freeing you to do other high-value tasks. This might include estimating, purchasing, reviewing contracts, scheduling, project management, sales & marketing and more.

5. Build a smart marketing strategy

When targeting a local base of potential customers, online marketing can be a fruitful source of leads. These days, building a website is fundamental to helping your clients find you. Similarly, you can use social media to showcase your services and even use paid advertising to promote your business.

It’s also smart to keep in touch with your established/past customers, even through touches as simple as an email at the holidays. It can help you by bringing down the sales costs and keeping you in your customer’s mind, long after you’ve finished their project.

Sign up for construction lead services

Whether you’re an established business or starting fresh, joining a lead generation service for contractors can help you generate lead flow and also build an online footprint.

Commercial contractors might sign up at sites like ConstructConnect, BuildingConnected, The Blue Book or BuildZoom. Not only can list your own business and services, you can also get notified of projects with open invitations to bid (ITB).

Similarly, if you’re a residential contractor, you can list your business on sites such as Houzz, Block or HomeAdvisor to get connected with homeowners.

Did you know that your marketing costs can be written off? Learn more about some of the best independent contractor tax deductions.

6. Join an industry association

If you want to grow your business, networking is extremely important. It can help you by nurturing your business skills, knowledge share on how to run your business and help you meet others whose work you could utilize on your projects.

Plus, you will also be able to keep yourself updated with the latest industry standards and practices. You’ll gain access to seminars, educational materials and benefit from some of the partnerships these associations cultivate.

Want more networking opportunities? See 11 of the best business networking groups for new business owners. 

How NEXT helps independent contractors become successful

At NEXT, we create customized construction contractor insurance packages to meet the unique needs of your business. We’re 100% dedicated to small business owners and self-employed individuals, so we understand you want affordable, easy-to-manage coverage.

In less than 10 minutes, you can complete our online application, see your policy options, get a quote and purchase coverage. After paying, your certificate of insurance will be available right away, and you can access it from anywhere, anytime.

Get started with your free quote today.

6 tips for being a successful independent contractor


kim mercado
About the author
Kim Mercado is a content editor at NEXT's blog, where she writes and edits posts for small business owners. She is an experienced marketing professional and loves helping entrepreneurs solve their business challenges. You can find Kim trying new recipes and cheering the 49ers.
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