In an effort to keep costs low, more and more businesses are turning to contractors. Capitalising on the increased move toward contracted labour is a more than a matter of simply having the required skills; it is about being equipped with the correct tools and, more importantly, information to win contracts and turn your own profits.
Legalities – If you are going to ‘go it alone’ you need, first, to make sure that you are doing everything legally and legitimately. In the first instance you need to register your business name. Unless you are trading solely under your own name, your business needs to be registered. The requirements for this differ from country to country and even, in the US, from state to state. Information is available online on the process of registering your business name and taking the time to register your business can save you thousands in fines and penalties for trading without a license.
If you are a contractor, you are responsible for all your own taxes. Make sure you are familiar with the tax laws in your area and that you have a reliable accountant. There are basic bookkeeping courses available on the internet and free software you can use to keep track of incoming and outgoing financial, but these do not make up for the professional services of an accountant. It may seem like an unnecessary expense but it can save you money in the long run.
Pitching for Business – It is vital that you are equipped to service the contracts you are pitching for. This means having the correct tools for the job in the first place. You can easily kit out a basic mechanic outfit from places like SGS Engineering, but if you are planning to take on specialist work, you will need to invest in specialist equipment. Do not be blinded by the raw numbers; a contract is only worth its profit to you. If you are going to spend more on equipment and hiring premises than you are going to make in profit, avoid pitching for the contract. Do your calculations well in advance and figure out whether a couple of smaller contracts would be more lucrative than hooking that ‘big fish’.
When you go into a pitch, do not be tempted to simply undercut the competition. Business owners know that the cheapest quote does not necessarily mean the best quote. Make sure the promises you make on delivery are realistic, achievable, and are going to move your business forward. It is better to lose a contract than it is to take on something that has the potential to bankrupt you and leave you liable if you cannot follow through on your assurances.