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How to become an independent contractor: a Complete Guide

This is not a well-detailed and state-based article. And it is not written by a financial advisor or an attorney. Yet, the info listed here is well-researched and guaranteed. It’s simply meant to be a complete guide for you to start your journey of becoming an independent contractor. By reading this article, we believe you would know where to step next, and where to look, and what to look for. Simply, you would have a clearer idea about how to become an independent contractor.

What Does it Mean to Work as an Independent Contractor?

Being an independent contractor means being your own boss, possessing the freedom to work for whom you want, based on your own terms, and under your own policies.

It also means many things:

a) Being responsible for your own generated income

b)Paying your own taxes and social security

c) Being charged for your own Medicare bills.

It has to be noted that an independent contractor is not necessarily one individual. Instead, it can be a group of people, a business, or even a whole corporation.

The independent contractor doesn’t work for people. He (or she or they) partners with them.

The self-employed contractor works under a verbal or a written agreement with another individual, group of individuals, entity, business, or corporation. Under the terms of the contract, the independent contractor provides goods or services for an exchange of an agreed-upon amount of money. 

Excited to know more about how you can become a self-employed independent contractor too? Don’t go anywhere then!

Everything about how to become a self employed  independent contractor

There are many different jobs to pursue and skills to learn to make good money. But becoming a self-employed independent contractor is not for anyone. Let us start with this hardly digested fact.

As an employee, the company you work for is probably paying your taxes for you. They may provide life and health insurance, benefits, paid vacations if you’re killing it, and more kinda stuff.

BUT as we cleared earlier, you lose most of these employment leverages as you become a self employed independent contractor.

In other words, if you are a responsible father, got a mortgage or debts to pay, and got unsteady bills to pay every single month… becoming an independent contractor may not be a good decision.

You would have to take some financial risks along the way, and you certainly don’t want to drag people you love and care about with you.

You also don’t want to start your independence journey by stacking bills above your refrigerator and facing financial issues.

That’s because, when you’re an independent contractor you don’t have the several leverages that come with being an employee. Nobody’s gonna take care of your taxes, and nobody’s gonna pay for the children’s insurance.

But if your head is pretty above the water and you’re ready to choke on some of it ALONE. Then, let’s just dig the hole and catch that rabbit.

Here Are Some Important Tips on How to Become an Independent Contractor:

Start Your Own Business

You are no longer an employee! Cheers to freedom! :

But wait, it ain’t that simple!

It’s high time you start your own business in order to become actually an independent contractor. And remember, you could be a one-man-business, and still call it a business. Who cares right?

But anyway Mr. Independent Wannabe, there is more than one way you can go about becoming an independent contractor. One simple plan is to hire an accountant and let them do the paperwork for you. They would take care of everything from A to Z and you don’t tip a toe until you’re a legit business owner.

We asked around and rang some phones and we were told it costs around $500 to thrice that, depending on the state you live in and how shiny the shoe of your accountant. It’s a made-up reason, but it’s my website, you can’t stop me from making things up can you?


Like seriously! Who would want to start their independence journey by relying on an accountant with shiny shoes?

If you want to do it on your own, there is a pretty amazing website where you can create a business by yourself and at an affordable cost.

go to RocketLawyer, go to the ‘Menu Section’, yes! it’s that bar or whatever you want to call it! then you click on ‘Start a business’ as highlighted in the attached picture below.

how to become an independent contractor
Rocketlawyer Website

It probably is getting a little tricky for you now! There are a lot of options popping up and you’re dumb and don’t know where to click. (I get to say that to you, it’s my website remember?)

Sign up for an LLC Business

As y’all may know LLC stands for Limited Liability Corporation. An LLC is simply a business that’s separated from the person owning and/or running the business. It’s not yours, but you own it. Don’t try to think about it, okay?

If you’re well-versed on taxes, you know exactly why we want your company or business cleared off of your name. Presumably, we are not saying it’s going to happen, but let’s just say something unpredictable happened, and now your state is after what you own.

They can try to probably go after your car, or your house, and maybe some other properties and assets that are under your name.

But they won’t be able to put their fingers on your independent business. It would still pour cash into your account so as to be an employee of the company. Which will certainly help you stand back on your feet.

That’s why LLC! You own the company, it’s yours, you know it. I know it. Everyone knows it. Yet, you just can’t prove it, and you shouldn’t care. Because that’s for the best.

We call it stealthy wealth! Ladies and Gents!

Certainly, there are pros and cons to this choice. Yet, we still believe it’s the best. Even better than going for an s-corp business. But don’t keep it here, you’re always invited to check more resources, use your critical thinking, and pick the right choice. Or simply request a detailed article about this in the comments, we’ll work on it and send it to your email.

Choosing a Name that Represents Your Independent Contractor Business

As you’re filling the RocketLawyer LLC form, we expect that you have to choose a name. It can simply be your last name. Or you can watch this video about how the most successful brands got their names. You’d certainly be inspired!

Set a Business Bank Account for your Business

A separate business needs a separate bank account! This is how you can keep all the bombs saved while getting paid your own salary to your personal account.

This would be the yearly taxable income of your company. And it would be the bank account you use to pay the people who work with you, including yourself.

It’s an easy thing to do, yet it’s really crucial to protect your corporation and to keep the finances clear.

Not a big deal, find the best bank out there, visit their website, open an account.

Or you can try e-banks. Ever heard about PayPal? Well, it’s not really the best option out there. They have some really strict policies that may result in delaying a lot of deals and invoices.

I personally prefer using Wise for it’s faster and easier and usually cheaper too. But you can go for Payoneer; it also is a well-reputed e-bank.

Get A Personal & A Business Website

Yes, you both need a website. A personal website is not a big deal. You can buy a WordPress host and a domain and it won’t cost you more than $100 to set it right. But it’s not going to be the best website in the world.

If you want a good-looking & a professional website, we would be glad to work with you. It’s one of the services we provide. We can deal with everything from A to Z, designs, SEO, and theming are all services we provide for very fair prices.

But honestly, I would sincerely encourage you to go DIY with your personal website.

You will certainly need professional help with your Business website. It’s the face and the platform your clients will see even before meeting you. It just has to be perfect.

You can go hire professionals on Upwork for cheap. Or you can work with us or any other agency out there. In this case, please email us and we would be glad to schedule a 30 minutes meeting with you and discuss things with you. The meeting is free as long as you commit to not waste our time and yours.

Whichever you choose, better choose the right partners.

Promote & brand your business

There is no business without customers. You should certainly start advertising your product or service from day one. This includes calling uncle Murray and telling him that you started this business and asking if he knows someone who knows someone who might be interested in your services and products.

That’s just how it works. Spread the word and look for customers in your real human network.

But relying on that to get the best results would be a little too dreamy. You should be crushing it online. Don’t simply advertise, you should be branding yourself.

We believe that if you are doing something, aim to be the best or don’t bother trying.

We will prepare a long detailed article on how to brand yourself in the digital world. You can keep your email for us and we will notify you about it.

But until then, our complete team can help you build your business and do it all right.

How to Become an Independent Contractor – FAQ

How to become an independent contractor frequently asked questions

Is it worth being an independent contractor?

Yes. It’s not the best source of income for the first few weeks or even months. But it certainly is worth it if you’re to commit for the long run. Overdeliver and satisfy your clients. And they would come back and bring more clients every now and then. That’s how you grow.

Do you need a license to be an independent contractor?

Not necessarily. This depends on what field you are targeting. For instance, if you want to build websites for other businesses or want to sell bottles of water… you wouldn’t need to own an actual license for that. But if you’re selling insurance or medicare and this sort of stuff… it certainly requires a license.

What is the difference between being self employed and an independent contractor?

An independent contractor is a freelancer. A freelancer is not necessarily an independent contractor. This said, a freelancer is a person who doesn’t work for people as an employee, but simply as someone who does a task for an income. A traditional freelancer would get his clients from PeoplePerHour or Upwork, while an independent contractor may have to meet people in the real world and have to do some paperwork to finalize a deal.


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