- Business and Employment»
- Small Businesses & Entrepreneurs
Working as an Independent Contractor: How to Earn More Money
Tough times for everyone
Have you recently lost your job, or have you taken a pay cut to keep the position you have? You are certainly not alone. The United States economy is in a state most of us have never seen before, with unemployment still high and few indications the worst is over. Even when the economic crisis abates, it has been reported that many jobs lost to the recession will not return. Because employment opportunities are scarcer than they were a decade ago, many men and women have turned to self-employment as a career option. They have returned to the labor force as Independent Contractors.
If you are self-employed, you can establish the value of your work and charge for it accordingly. The opportunity to make more than you made as an employee certainly exists, depending on your expertise and competition in the market. No matter what you charge for your services, however, you will eventually want to earn more money. Let’s face it; sooner or later we all need a raise. Working for someone else usually meant an annual salary increase or bonus, and if this was not forthcoming, you could always ask for more money. Putting a few extra dollars in your pocket is very different for the Independent Contractor—it requires planning and effort. If you are running a small operation and cannot invest your profits, the prospects of increasing your income will largely be determined by a combination of factors: your available time; your standing and reputation in your field; and, your knowledge and experience.
So what does it take to earn more money?
Images of Making a Living
Four ways to increase your earnings
Regardless of what your business might be, there are general practices you can follow to achieve your goals. If your goal is to give yourself a raise, it is necessary to examine your business and see what options exist for you. You can certainly charge more for your services, but if you charge too much or increase your prices too often, your customer base will likely erode. In broad terms, you will bring in more money through taking one or more of the following actions, all geared toward improving yourself and your business:
1. Devote more time to your business. If you cut hair for six hours every day at $20 each and each haircut took ½ hour, your maximum earning potential is $240 per day. If you extended each workday another two hours, you can earn $80 more. Even if the extra $80 still isn’t enough, working more hours can benefit you indirectly. You might become faster at cutting hair and manage three haircuts in an hour instead of two; or, you might develop a broad base of loyal customers that keeps your appointment schedule filled. Putting in more time is the simplest way to bring in extra money, but it is the hardest path to follow for long-term success. There are only so many hours you can devote to cutting hair, and then you must find a different way to increase your earnings.
If you cannot devote more time to your business, it will be necessary to manage your time better. Using your time well adds value to your business by fitting in a few more phone calls or meeting with a new customer each day. Time management increases your efficiency and allows you to earn more money without charging more. It is the most straightforward way to give yourself a raise; you are doing more in less time.
2. Increase your knowledge. The top professionals in any field are experts, and you should strive to increase your knowledge to the extent you are regarded as an authority. It is not enough to call yourself an expert—your accomplishments must demonstrate you are indeed the best at what you do. To improve your knowledge you might attend college, network with other professionals in your field, find a mentor, or conduct your own research.
Opportunities sometimes exist to combine knowledge of disparate fields to create something new. For example, Steve Jobs saw what technology could do for animated films and helped Pixar rise from obscurity to unparalleled achievement in animation. Psychologists now use artwork as a form of therapy, and some universities offer art therapy as a degree. The merging of two fields of endeavor created new categories of experts.
You can also become an expert through focusing your efforts on a smaller, highly specific niche. Expanding into a niche market offers less competition and can be highly lucrative, provided the niche offers a relevant product or service and has sufficient demand to be worthwhile. Shoe stores that sell only athletic shoes are an excellent example of capitalizing on a niche market—it takes training and knowledge to know what shoes a competitive athlete requires.
3. Gain more experience. You can increase your knowledge through academic pursuits or mentoring, but true experts in their field combine their knowledge with experience. There is no short-cut to gaining experience—you have to put in the time. Hands-on experience is reassuring to customers and colleagues alike, and many businesses will tout their know-how and longevity in their advertising. Whether the caption reads “locally owned for over 30 years” or “billions and billions served,” consumers equate experience with value and trustworthiness. Experience couples wisdom with knowledge to make you a true authority. You will notice more clearly where your business should go. You will anticipate trends instead of reacting to them, and your entrepreneurial eye will see new and innovative ways to enhance your business. You will own the bandwagon others jump onto with the opportunities your expertise creates for you. Success is a product of good judgment, and good judgment is a product of experience.
4. Improve your reputation. This can be accomplished in a number of ways already mentioned: improving your knowledge and experience, gaining more satisfied customers, developing a reputation as an expert in a niche market, etc. Your reputation can also be improved through identifying yourself and your business with principles and actions others respect. Customer satisfaction or fast service, for example, are principles your customers will value. Linking yourself to humanitarian efforts or local causes can also enhance your standing in your community. No matter what your approach may be, the common denominator in any attempt to improve your reputation is authenticity. Your reputation must be built on accomplishments—it cannot be simply a public relations campaign.
If your reputation is exemplary, you may be sought out for participation in charities or civic affairs. Others will seek to link their reputation to yours. If you maintain your perspective and carefully select who you choose to affiliate with, it will only further enhance your now-sterling reputation.
Take a few minutes to think about the
possibilities. How much more money do
you need or want to accumulate? How much
do you wish to earn annually? What
financial decisions do you need to make to accomplish these goals? What actions can you take today to move
toward them? As you consider all the possibilities
you will become motivated to achieve your goals, especially if your goals are
exciting enough to inspire your passion and creativity. These four suggestions are certainly not the only ways to make more money for yourself or your business--they are only a few general ways to improve your financial picture. You will find many more with time.
Follow your dreams
This article is meant as encouragement to everyone trying to survive on their own. As a writer and artist, I have learned that working as an Independent Contractor is not an easy task—it is time consuming, the risks are many, and the work can be stressful. Despite the inherent difficulties, most Independent Contractors (including me) still perceive the advantages of self-employment as far outweighing the disadvantages. Studies reveal that more than four out of five Independent Contractors preferred self-employment to working for someone else. Even among those forced into self-employment because they were downsized or fired, 66% claimed they would rather be working for themselves. The ability to exert control over your life and make choices for yourself is important—so important that in the United States, a new home business is launched every few seconds. Businesses built not only on dreams and aspirations, but hard work and sacrifice. Businesses just like yours and mine.
Good luck and I hope you achieve all your goals.
Read more articles with strategies for business and personal success
- Working as an Independent Contractor: Effective Contract Negotiations
An increasing number of men and women are looking to self-employment as a path toward success in business. High unemployment and a lack of available jobs has made going it alone an appealing...
- Ten Strategies for Working as an Independent Contractor
With the American economy in a state of crisis, unemployment is high and countless jobs have been permanently eliminated. Many businesses now look to virtual assistants or temp agencies to meet short and...
- Independent Contractors: Assessing Your Value in the Market
There are many important details associated with being your own boss, and one of the most important is evaluating yourself and the viability of your business. As an Independent Contractor, you...
- Telephone Skills and Techniques: The Art of Successful Communication
We live in a very different world now. Thirty years ago we wrote a letter or telephoned when we wanted to contact someone we couldnt meet face-to-face. In this new age we tweet, instant message,...
- Time Management Skills: Don't Waste Time for Others
Everyone knows people who always show up fifteen minutes latefor everything. When they arrive, they wave their arms with a flourish and either quickly apologize or make a joke of their lack of...
- How to Save Money (A Few Cents at a Time)
Many families in America and around the world have been forced to survive with fewer financial resources than they previously enjoyed. Although experts proclaim the economy is improving, many are still...
- How to Project Self-Confidence
Some people just have it made. They are voted most likely to succeed in school. They receive job offers in their field right after graduation from college and climb the corporate ladder with ease....
- Time Management Tools: A Convenience or Trap?
There are numerous books and articles devoted to time management, but we still seem to have very little free time. We make lists and group tasks. We organize, categorize, prioritize and analyze. We purchase...
- Twelve Strategies to Rediscover Your Joy for Learning
Children love to learn. They see the world as a magical place, filled with countless wonders to investigate with their full focus and attention. They want to understand everything. When they...
- How to Listen Well to Others
I am always appreciative when something complimentary is said about me. On occasion I have been graciously referred to as intelligent, sensitive, and creative. (I confess Ive been called less...
- Functions of Effective Leadership
For the purpose of clarity, the word group shall be used in this article to represent any collection of individuals gathered for a shared purpose. From an early age in human development, people...