Pros and Cons of Freelancing, Contracting, and Consulting
by
Attorney Stephen Fishman
Learn about the benefits and drawbacks of consulting or doing freelance work as an independent contractor.
Freelancers and consultants are known as "independent contractors" in legal terms. An independent contractor (IC) is a person who contracts to perform services for others without having the legal status of an employee. Most people who qualify as independent contractors have their own trade, business, or profession -- that is, they are in business for themselves.
Good examples of ICs are professionals or tradespeople with their own practices such as doctors, graphic artists, accountants, plumbers, and carpenters. Independent contracting is also common in highly specialized or technical fields, such as computer programming, engineering, and accounting. You can find ICs in almost every field, from construction to marketing to nursing. Any person who is in business for himself or herself qualifies as an IC.
Some people seek to become ICs, while others have the status thrust upon them. Whichever group you fall into, working as an IC has both benefits and drawbacks.
Advantages of Working as an Independent Contractor
Independent contractors reap many rewards that regular wage earners may never experience.
You are your own boss.
When you're an IC, you're your own boss, with all of the risks and rewards that entails. You can choose how, when, and where to work, for as much or little time as you want.
 | Do independent contractors need business licenses? |  |
ICs are masters of their economic fate. The amount of money they make is directly related to the quantity and quality of their work. This is not necessarily the case for employees. ICs don't have to ask their bosses for a raise -- if they want to earn more, they just have to go out and find more work or raise the amount they charge. And, because most ICs are not dependent upon a single company for their livelihood, the hiring or firing decisions of any one company don't impact ICs like they do employees.
You may earn more than employees.
|
|
