Pros and Cons of Being an Independent Contractor: The Good, The Bad, and the Ugly of a Freelance Job
What is an Independent Contractor? What is a Freelancer?
Being an "independent contractor" can mean many things; by definition the field is varied, and involves any activity where you can produce some income while working under your own terms. As an independent contractor, you can do whatever you are good at, as long as you are creative and proactive enough to find a way to monetize your talents. "Independent Contractor" means you are working 'independently' from a traditional management structure (read: you are your own boss) while being contracted to complete a project, whether that is editing a document for a client or producing a crafted product for a costumer.
"Freelance" work is similar in that you are allowed a great degree of freedom, but as a freelancer you are usually working to meet the specific guidelines of an assignment or specific task. As a freelancer, you will be working to contribute something to an existing agency, company, or publication; as a member of the broader independent contractor category, you could be doing this or anything else you are interested in doing. As someone who currently works as an independent contractor and has in varying capacity throughout my life, I'll share some of my experiences with freelancing and working as an independent contractor, and take you through the good, the bad, and the ugly of this unique way to make a buck. If you are thinking of starting work as an independent contractor, want to know more about how this field can generate revenue, or are just curious about what being an independent contractor takes, read on!
Have you ever worked as an Independent Contractor?
(Tell us what you did in the comments!)
Pros and Cons of Being an Independent Contractor
Here is a quick list of the pros and cons of working as an independent contractor. I will spend time diving in to each point below.
- TOO MUCH Freedom
- You are your own boss
- Express yourself
- Build your resume
- Become an entrepreneur
Read on for explanations and insights related to each point, based on my personal experience working as an independent contractor.
If Richard Branson can do it, so can you! (...right?)
Pro of Being an Independent Contractor: You Are Your Own Boss!
EVERYONE has stories of a boss that drove them crazy, work conditions that they couldn't stand, or the exorbitant and malicious manager who made their work life feel like the seven circles of hell. But as an independent contractor, you won't have to worry about a boss that will drive you crazy, since you will be your own boss! One of the most stressful elements of working in any job is the power dynamic that exists between workers and managers; even if you have a "good" boss who isn't disrespectful or unreasonable, you will probably find yourself tiptoeing at times, or working hard to make your boss happy. As an independent contractor, this stress won't exist at all. Even if you are in an employment relationship where you are working for a company or service as an independent contractor, and have someone to report to, by definition your role as an independent contractor and not an employee means that the company or service you are contracted with can not legally tell you how to work.
Freelancer Theme Song #1
Pro of Being an Independent Contractor: Freedom!
While this is closely related to being your own boss, it is worth mentioning that being an independent contractor has the special perk of offering you a LOT of freedom. In many freelance or independent contracting positions, you can work for home and set your hours. Since no one can legally tell you exactly what to do, you can set your own work conditions. Feel like doing that data analysis at 3 am in your pajamas while eating Ben and Jerry's? Go for it. Think you can complete a contracted project without showering for a week? It's your call. Overall, setting your own work conditions means that you will have the freedom to work however you likes, which can be a very liberating and enjoyable element of working as an independent contractor.
Pro of Being an Independent Contractor: Express Yourself
Let's face it: most jobs you will have in your life aren't exactly going to encourage your creative side all the time. Being an independent contractor means you get to do what YOU want to do, and will have a lot of room to express yourself through your work. Do you love making hand crafted bracelets? You can do that, sell them online or in person at festivals, and earn an income while doing so as an independent contractor. Whether you love writing, playing music, creating things with your hands or mind, cooking, or anything else you can monetize, you can express your passions and creativity as an independent contractor. Again this ties in to being your own boss and crafting your own product, but no matter how you look at it or what you find yourself doing as an independent contractor, you will have a great opportunity to express yourself.
Freelancer Theme Song #2
Pro of Being an Independent Contractor: Build Your Resume
Are you at the point in your career or life where you feel you have the skills and abilities to land a great job, but you don't have the resume or experience to secure the role you want? Being an independent contractor may be the perfect venture for you. As an independent contractor, you will have the ability to focus on developing skill sets that will be applicable to your later career and ambitions. Want to work as an accountant? Consider starting your own small business, producing or doing whatever you like, and keep a detailed ledger to show your skill development. Want to be a musician? Work independently to record your abilities, and use your product as a demonstration of your potential. No matter what career you aspire to, you can build some of the skills necessary to break in to your dream field by starting as an independent contractor and adding to your resume.
Pro of Being an Independent Contractor: Become an Entrepreneur!
While this is related to resume building in general, the opportunity that being an independent contractor affords to develop an entrepreneurial mind state is unique and can't be emphasized enough. In this day and age, almost every career expects you to accomplish core responsibilities AND be a business person, and this kind of entrepreneurial spirit is something that being an independent contractor will force you to practice. As an independent contractor, you are responsible for developing your own business goals and turning them in to profit margins. You are your own boss, but you are also your own sales manager and accountant and creative developer; you will get familiar with the many facets necessary to turn a product in to a profit, and if you are observant and apply yourself you can easily translate the entrepreneurial spirit of being an independent contractor in to your future endeavors. Being an independent contractor will force you to become an entrepreneur, which is invaluable in the modern economy.
Freelancer Theme Song #3
Con of Being an Independent Contractor: Money
If you are proactive, entrepreneurial, talented, and have a good bit of luck on your side, you can make very good money as an independent contractor. Unfortunately, it is far more likely that, by working as an independent contractor, you are trading an increase in freedom and creativity for a decrease in earnings. Put simply: you aren't going to get rich as an independent contractor, or at least you won't very quickly. If you are offering a highly skilled service, you can expect a decent compensation, but you would more likely earn more working for a company directly providing that service than you will by contracting to complete it as a free agent. For example, I was once paid a monthly salary as an independent contractor while I was working on a project for a large start-up company. I could do the work form home, and whenever I chose. But when I worked out the actual per hour wage I was receiving for the work I was contracted to do, it was much below market rate for the service I was providing and much below what other employees with similar responsibility who worked for the company directly were paid. So, if you intend to work as an independent contractor, keep in mind the money won't always be great.
Con of Being an Independent Contractor: Instability
If there is one thing that can be said for the routine of a standard waged job, it is that it leads to routine benefits: you can expect a check every payday, a decently predictable work schedule even in the worst jobs, and a predictable level of stress. Not true if you are working as an independent contractor. Part of the fun of the job lies in the fact that it is unpredictable and forces you to think on your feet and be your own biggest promoter, but these conditions also mean that nothing is guaranteed, and you can't expect anything to be regular or routine. This instability can lead to a lot of unnecessary stress. When is the next time I will land a big project? When and where will I be able to sell my products? Questions like this plague the independent contractor, and this instability is a major drawback of the position.
Freelancer Theme Song #4
Con of Being an Independent Contractor: Isolation
For better or worse, work and earning money is a big part of almost everyone's life. And in most jobs, there is a large social aspect to working: you will make friends in any position, will have people to complain to and about, will share an experience (working) that will bring you together. Not so for being an independent contractor. That "independent" part means your work is almost entirely without camaraderie. Yes, you can finish projects at any hour of the night that you like, but you will be working on them alone. This kind of individual work can be very isolating, and have a large negative effect on a person's psyche, leading to depression and loneliness. The total isolation of working as an independent contractor isn't based on monotony or work conditions, but is instead a more real and obvious isolation: you are working alone, and there is no way getting around the fact that being an independent contractor is a lonely way to make money,
Con of Being an Independent Contractor: Too Much Freedom
Is there really such a thing as "too much" freedom? In the world of work, it just so happens that an excess of liberty can be a major issue. As an independent contractor, you are in complete control of your hours much of the time, which can mean procrastination for even those with the best worth ethic. You may push yourself to work near deadlines and produce sub-par work as a result You may promise big results that you find yourself unable to obtain. You may very quickly come to realize that freedom, while an attractive quality of working as an independent contractor, can become a burden. You will have a lot of responsibilities as an independent contractor, and they can quickly fall by the wayside if you aren't careful.
Con of Being an Independent Contractor: Taxes
If I haven't scared you off already with the cons of being an independent contractor I have listed above, there is one more big drawback I have to discuss about doing freelance work, and it is a BIG one: taxes. While it can be frustrating to get a paycheck from a waged job and have close to a third of your earnings go directly to the government via taxes, it is even more disheartening to realize that when you earn money as an independent contractor, you will STILL need to pay the tax man. However, you will be responsible for managing your taxes yourself, and sending your tax payment to the IRS or in some cases your state tax board directly. This means you are going to have to keep meticulous track of everything you earn and everything you spend, and you are going to have to keep a close handle on all of the right paperwork to document your earnings. Depending on how much you are making as an independent contractor, you may have to pay taxes annually or quarterly. The whole process can be, frankly, quite taxing.
Every Independent Contractor's Catchphrase: "I Work Alone!"
Independent Contractor: Freedom Comes at a Price
Overall, working as an independent contractor is a unique way to earn money, but has some drawbacks as well. The good? The "independent" part of the job means you will be in charge of most of your work conditions: you can set your own schedule, work where you like and how you like, and be your own boss. This freedom means you will be able to express yourself a lot more than in most positions. As an independent contractor, you will be providing services that you WANT to provide, and as a result will be able to inject some creativity in to your work. Furthermore, all of this freedom means you won't have to deal with some of the demeaning elements of a standard job. No sucking up to your boss, scrambling for shifts, or begging for raises. You are your own marketer, boss, and creator as an independent contractor, which can be a great experience and a great opportunity.
Freelancer Theme Song #5
However, all of that freedom comes with at a price. The bad? As an independent contractor, you are in charge of your business, and in charge of creating business in the first place. This means you will constantly have to be "on your hustle" to ensure you have work, and this instability can be very stressful. Adding to the stress of working as an independent contractor, you have no one to share your experiences with: the role is incredibly isolating, and unlike traditional waged labor roles, you will not have anyone to bond with at work, complain to about a particularly horrible project, or celebrate with after a great accomplishment. The combination of instability and isolation mean that working as an independent contractor will be very stressful. And don't get me started on taxes. No really, don't get me started: working as an independent contractor now, taxes terrify me, and are a big burden to handle for anyone in this role.
Even worse than stress and taxes, there are some elements of working as an independent contractor that are downright ugly. All that "freedom" that you get by being "independent?" It can have it's downsides; you will make significantly less for any service you provide as an independent contractor compared to a standard employee providing the same service, and you will often be forced to work longer hours than you would like when deadline's approach. The fact is that since you aren't a standard employee, a lot of employment law won't apply to you. It is conceivable that you will earn less than minimum wage on some projects if you have bitten off more than you can chew or accepted too many responsibilities. It may seem that you are getting taken advantage of as an independent contractor, earning less than you should and working long hours. And that's because you probably are.
However, I have enjoyed the experience of being an independent contractor and feel I have a stronger resume and sharper set of skills as a result, and I do recommend it to anyone who has read this guide thoroughly and still wants to give it a try.
Questions About Being an Independent Contractor? Ask in the Comments and I'll Answer Based Upon My Experiences!
Thanks for reading!